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Is DOMA Stock a Solid Long Term Investment?

Stock Market

If you're like most people, every time you turn on the news you're faced with one story after another about the economy getting worse. With the exception of paychecks, virtually everything seems to be going up. It's a sobering thought, especially when you consider the fact that basics such as gasoline and groceries have increased by far more within the last few months than they have since the early 1980s.

Most people have started to feel like it doesn't matter how hard they work or how much effort they put into things, it's virtually impossible to make enough money to make ends meet, much less to save up for the future. As a result, a lot of people are making the decision to invest in the stock market in an attempt to make enough money for their future.

The question is, how do you know when you see a long-term stock that's a good option as opposed to something that is only going to cost you time and money? One company that you might want to take a serious look at is Doma Holdings. If you haven't heard of them before, it might be time to do some serious research in order to decide whether or not investing in this company in the long term is something that could potentially benefit you and your financial goals.

Who Is Doma Holdings?

The company deals with title insurance, but they don't stop there. As a matter of fact, they have completely changed the way that people close on new homes and that is the thing that has some stock market analysts taking a harder look at what they've been doing lately.

The company has a very large online presence. They also use AI technology in order to streamline the entire process, meaning that closing on a home is often both easier and far more efficient. Instead of going through the closing process for a month or even longer in the more traditional sense, this can streamline things so that the entire process is completed from start to finish in a matter of a few days.

As a result, a lot of people are becoming interested in doing business with them. If you've ever closed on a house, you know how completely nerve-wracking the entire process can be. If you could get it done faster as opposed to letting it dominate your life for anywhere from four to six weeks (or longer in some cases), why wouldn’t you?

Closing with Fewer Costs

In addition, the company offers you the ability to close on a house with far fewer costs than you're likely to see with a more traditional company. No one wants to spend more money than they have to when buying a new home, so if you can get the process done in less time and save money in the process, it seems like a no-brainer that you would choose to do so in this manner.

Of course, if you're not interested in taking that particular avenue, you can always tie up your entire life for the next 12 months and spend tens of thousands of dollars on closing costs, often with hidden costs that you never even see coming until you get hit with the bill.

Doma as an Investment

Now that you know a little bit more about the company, it's time to figure out whether or not they might potentially be a good option as a long-term investment. The first thing you want to look at is whether or not they have a proven track record.

That's a box that you can definitely check in this particular case, one that is making more headway with each passing day. As a matter of fact, they have been getting customers from major companies that have been dealing with mortgages for a number of years.

For example, both JPMorgan Chase and Wells Fargo have traditionally been known as companies that handle the same types of operations that this company deals with. The thing is, they handle it in the more traditional manner where it takes longer and costs a lot more.

As such, customers have been leaving those companies and others in droves and going over to Doma because they want to get in their new home as quickly as possible and they don't want to spend any more money than they've already spent in order to do so. It's definitely noteworthy when you see a newer company that's doing things differently and getting more and more people to pay attention to them.

Hard to Predict

When a company is doing such a good job that they're able to consistently take customers away from other companies that have been well-established for decades, it's time to start paying attention. The truth of the matter is that stock market experts believe that this is a company that is in it for the long haul.

Almost all of them agree that it's a corporation that is going to stick around and continue to be profitable for the foreseeable future. While it is absolutely impossible to predict with 100% accuracy how something is going to be performing six months or a year down the road (much less five years), it is worth noting that something catastrophic would have to happen in order for this company to start losing money.

As a result, it's been considered a solid stock market investment for some time now. If you're looking at it as a long-term investment, there is a very good chance that the stock will be worth more a year from now than it is today. If you want to hold onto things for a bit longer, you could potentially increase the amount of money you might be able to make rather dramatically, provided you buy the stock now and then choose to sell it in three to five years.

Planned Expansion

In addition to what the company is currently involved with, it also plans on expanding into home warranties in the very near future. This isn't something that should make investors run away, but instead run to the company, especially when it comes to considering them as a potential long-term investment.

It's estimated that this expansion will add another $23 billion worth of value to the company. If they're already doing well enough to take business away from other well-established companies that have been dominating this business for so long, imagine what they could potentially do when they expand into other areas and start making even more money.

If you're considering purchasing a number of shares of stock as a long-term investment, this is something that you have to carefully consider because it could dramatically increase the amount of money that you stand to make.

Fewer Competitors Means Bigger Success

As is the case with virtually any stock, it's not all ponies and rainbows. As a matter of fact, this stock, traded publicly as DOMA, just went public this past year and they've already experienced a few bumps and bruises. That said, they also have a bona fide reason for every one of those bruises that they've received.

A lot of it has to do with people being afraid to purchase new homes because of inflation, world events, COVID-19, so on and so forth. All you have to do is turn on the evening news in order to find out why somebody might be apprehensive to buy a new house.

These days, a trip to the grocery store is an eye-opening experience and it's also one that's likely to empty your wallet. As such, the prospect of buying a new home can often seem so far out of reach that some people are just reluctant to even look into the process, much less move forward with it. Through all of this, the company has remained financially sound. They also have one of the soundest business models that you're ever likely to run across.

The truth is, the fact that they use modern-day technology to streamline the home closing process is innovative in and of itself and it should be enough to make you take a second look at them. There are very few companies that have even approached this particular avenue, largely because real estate companies have traditionally not moved forward with technology as much as virtually everyone else in the world.

Cutting-Edge Technology

In fact, most people consider them to be 10 or even 20 years behind the rest of the world when it comes to the type of technology that they use. A company that operates like this with cutting-edge technology is one that has very few competitors, if any.

That means that they are poised to corner the market, be exceptionally successful and make a great deal of money. It also means that you have the opportunity to make a great deal of money by purchasing the stock and keeping it in your portfolio until you decide it's time to sell it.

Price Is Key

At the end of the day, it all comes down to the amount of money you have to spend in order to purchase a share of a particular stock versus the amount of money that you can potentially make in the future.

It's important to look at all of the data and listen to what stock market analysts have to say, but no one can make the decision for you. You have to take all of that information and then decide for yourself what is best.

In this particular case, it's very much worth noting that you can purchase a share of Doma stock today for $2.36. Imagine how much that share of stock could potentially be worth at this same time next year. If you really want to make things interesting, go back to the aforementioned time span of three to five years.

A company that has only just gone public and has a solid business model like Doma is poised to take the market by storm, even when there might be some rough seas ahead. It's conceivable that the stock could be significantly more valuable within the next three to five years than it is today.

If you're capable of buying several shares at its current selling price and getting in on the ground floor, this is a stock that could potentially get you a very comfortable payday when you decide to sell it without forcing you to spend a great deal of money in order to purchase it right now.

Managing Risk

Everybody knows that everything about the stock market is risky. There is no such thing as a sure bet. When you invest in something, there are a number of variables that could potentially get in the way of that investment doing what you hope it will do.

Having said that, there are a few opportunities that come along where the risk is so low that you would probably feel foolish if you didn't decide to take advantage of the opportunity. This is one of those types of situations. Granted, there is always the potential that the stock won't perform as analysts believe it will.

However, you have to consider the fact that even if that is what happens, the risk to your financial well-being is very low when you can purchase the stock for less than $3 per share. There are a couple of different reasons for this. First and foremost, you're able to purchase each share for a low price.

In addition, there is plenty of room for growth. In short, you might be able to purchase shares today for next to nothing and then sell them for many times what you paid for them at some point in the future. These types of opportunities don't come along very often.

When they do, it's important to take advantage of them. While nobody can guarantee you a significant payday, this is one stock that might potentially help you make the money that you want to make for your financial well-being later on down the road. It's one that's definitely worth considering as a long-term investment.

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Allen Lee

Written by Allen Lee

Allen Lee is a Toronto-based freelance writer who studied business in school but has since turned to other pursuits. He spends more time than is perhaps wise with his eyes fixed on a screen either reading history books, keeping up with international news, or playing the latest releases on the Steam platform, which serve as the subject matter for much of his writing output. Currently, Lee is practicing the smidgen of Chinese that he picked up while visiting the Chinese mainland in hopes of someday being able to read certain historical texts in their original language.

Read more posts by Allen Lee

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