Startups lose money. They direct their resources to growing the business first and worry about making profits second. Heck, even the Internal Revenue Service doesn’t anticipate new businesses to make any money in their first three years of operation.
But once a company is established and growing, turning a profit is kind of expected unless you have a good reason. Amazon (NASDAQ:AMZN) is one of those instances often used to justify a company not making money. It took nine years for the e-commerce giant to make a profit as it scaled its business up.
Yet Amazon is the exception, not the rule and you should demand the companies you invest in make money. At the very least, there should be a path to profitability. That’s why these three stocks are still ones to buy even though their operations remain in the red.
This post originally appeared at 24/7 Wall St.