10 Best Growth Stocks to Buy Right Now
Growth stocks investing has been booming over the last decade. They can be a great way to produce market beating returns, however not all growth companies are worthwhile investments. Let’s dive into what we think are some of the best growth stocks to buy right now.
Best Growth Stocks for 2022
Some of the best growth companies come from high growth and emerging industries and trends like cloud computing, AI, digital advertising, digital payments, e-commerce companies and SaaS companies with recurring revenue.
Often the best companies have large addressable markets, competitive advantages like first-to-market, network effects and a high cost of switching to competitive products or services.
Here are some of the best growth stocks based on their three year compounding annual growth rate and quaterly growth rate. Alternatively stock advisor services can be helpful in finding good growth stocks to invest in as well.
|Best Growth Stocks by Revenue Growth||Revenue Growth (Quarterly)||Upside (Analyst Target)|
|Snowflake Inc. (SNOW)||101.5%||105.75%|
|Lemonade, Inc. (LMND)||88.5%||13.42%|
|Opendoor Technologies Inc. (OPEN)||589.6%||86.17%|
|ShockWave Medical, Inc. (SWAV)||193.5%||8.79%|
|Yandex N.V. (YNDX)||45.0%||488.17%|
|Datadog, Inc. (DDOG)||82.8%||78.85%|
|Doximity, Inc. (DOCS)||40.4%||36.22%|
|Upstart Holdings, Inc. (UPST)||154.2%||-3.56%|
|Zscaler, Inc. (ZS)||62.7%||110.18%|
|Cloudflare, Inc. (NET)||53.7%||77.71%|
Building a Growth Stocks Portfolio
Investing in great growth stocks can produce some of the best returns over the long-term and a portfolio should contain at least 10 stocks with a five year or longer expected holding period.
Investing in great companies is key earlier in the company's growth can accelerate the returns. Building a successful growth stock portfolio can take patience and diligence to find the best opportunities at the right time.
Growth Stock Recommendation Services
Stock recommendation services like Motley Fool Stock Advisor and Rule Breakers can help simplify the process of finding high potential fully vetted growth stocks.
Each service offers two new recommendations per month and provides monthly “best buys” which are their highest conviction picks from past recommendations.
The Motley Fool is offering a bundle discount with full access to both services for $199/year which is $300 off the regular price. Both services are very complimentary and the bundle offers great value and comes with a 30 day money back guarantee.
By looking at the growth stock picks below you can see the life changing returns that are possible from investing in the right companies, at the right time and with a long-term time horizon.
|Best Motley Fool Growth Stock Picks||Return||Annualized Return|
What are Growth Stocks?
Growth stocks are companies that grow their revenues at a faster rate than the industry average and that invest heavily on top-line growth. Hence their focus is on growing the base of their business first and the focus on profits comes later.
Growth stocks are often contrasted to value stocks which are stocks that trade at a lower price to their earnings and sales, while growth stocks trader as higher prices due to their future growth potential.
A good growth stock investor will focus on companies with competetive advantages, large and preferably growing addressable markets and a proven management team, while some tend to specialize in certain markets like SaaS, cloud computing or e-commerce.
Minimizing Risk and Maximizing Returns
Investing in growth stocks can come with stock price volatlity. Here are some things to keep in mind in managing your portfolio.
- To minimize risk, trim winners that have grown to a high percentatge of your total porfolio.
- It's ok to sell when your original investing thesis is no longer true.
- Selling a winner can make sense when it rises well above your expectations, particularly when you have another high conviction place to invest the money.
If you've done your due diligence the next step and arguably the most difficult is to be patient, stomach market volatility and allow the power of compounding returns to kick in over the next 10 plus years.
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