Could These Growth Stocks Be Great Buys With Long-Term Potential?
Growth stocks have consistently seen outsized gains compared to the broader market, at least for the past two decades. Also, these stocks generally do not pay dividends. That’s because these companies would usually want to reinvest any earnings to accelerate growth. There are plenty of top growth stocks that are experiencing explosive growth in the current volatile stock market environment. But you can bet that growth stocks that are delivering impressive results today and that will continue to be great long-term investment can be quite hard to find.
How To Look For The Best Growth Stocks To Buy?
The hallmark of the best growth stocks to buy may typically include improving fundamentals and a history of bullish trading activity in the shares. This might not be as straightforward as it seems, since growth stocks come in all shapes and sizes. They can be found in any industry, any country, and any stock market globally. There is a lot to sift through.
A great way to start may be to look at some growth exchange-traded funds (ETFs) to invest. That is assuming you are new to investing. However, if you have been actively trading in the stock market for some time now, you can invest in specific stocks that you think have great potential. That way, you get higher risk, but also the chance of higher returns.
There are certain steps that you can take to look for high growth stocks in the stock market today. With vast information available on the internet, investing in top growth stocks is a journey that many can now partake in. First, look for powerful long term trends and then specific companies that tend to benefit from them. Perhaps you think e-commerce is a great place for growth. If so, you might want to consider Shopify (SHOP Stock Report) as a top growth stock to buy. Alternatively, if you like enterprise technology, Fastly (FSLY Stock Report) has been one of investors’ favorite growth stocks this year. As you dive deeper, you may identify their competitive advantages and future addressable markets. That way, you could potentially increase your chance of picking highly potent growth stocks.
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Top Growth Stocks To Buy [Or Sell]: Cloudflare Inc.
The tech sector has been a popular sector for growth investors. Within tech, cloud computing has attracted a lot of interest this year. Content delivery network specialist Cloudflare (NET Stock Report) has been one powerful growth stock to watch. The company saw its stock price surge around 230% year-to-date. It saw a significant hike in October following the announcement of Cloudflare One, a comprehensive new network-as-a-service offering.
In early October, co-founder and COO Michelle Zatlyn claimed cybersecurity networks like Cloudflare were essentially “water treatment filtration systems” for the internet. Zatlyn predicted Cloudflare would reduce the need for traditional cybersecurity services over the next decade. That’s because it would “make sure whatever’s passing through us is clean.” Cloudflare expects its full-year revenue this year to increase by about 41%. The company also expects non-GAAP net loss to fall considerably from $0.48 per share to $0.17-$0.18 per share. It would be worth keeping an eye for any potential revisions to these figures during the third-quarter earnings report after market closes today.
Cloudflare One notably integrates with major providers of identity management and device-security solutions. Some of the notable providers in the new product’s partnership ecosystem include Okta, Alphabet’s Google Workspace, Facebook, VMWare’s Carbon Black, and more. With so much growth prospects centering around Cloudflare, is NET stock a long term buy ahead of its earnings report?
Top Growth Stocks To Buy [Or Sell]: Baozun
The world’s second largest economy appears to be bouncing back strongly from the coronavirus pandemic. Recall that the outbreak originated in Wuhan, China. Despite the headwinds generated by the COVID-19 pandemic, the International Monetary Fund (IMF) estimates that Chinese GDP will climb 1.9% this year. That’s while the rest of the world will record negative growth rates.
A comparatively strong economic backdrop adds to the appeal of investing in Chinese e-commerce solutions provider, Baozun (BZUN Stock Report). Some call it the Shopify of China. The company stands out as an attractive small-cap growth stock that could potentially post huge returns. Just last month, the company managed to post a 12.6% increase in its stock price. With China’s economy posting strong performance compared to the rest of the world and e-commerce continuing to benefit there, Baozun has a bright future ahead.
If you have been following Chinese e-commerce stocks, you may know that Baozun is popular among Western brands operating in China’s online retail market. After all, there are advantages in using a local e-commerce solutions provider which can tailor a website to the local consumers. E-commerce has been a growing trend even before the pandemic. Now, the pandemic has simply brought forward future growth in this area. As long as merchants continue to depend on the offerings of Baozun, the company will record quarter after quarter of growth. With that in mind, are BZUN stocks the best bet on the future of Chinese e-commerce?
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Top Growth Stocks To Buy [Or Sell]: Xpeng Motors
If you believe the electric vehicles are going to revolutionize the automotive industry, you might want to take a closer look at the newly listed IPO Xpeng Motors (XPEV Stock Report). XPEV stock shot up 23% on Wednesday. Along with Nio (NIO Stock Report), both companies are the biggest potential winners among the U.S. listed Chinese electric vehicle makers, according to Citigroup.
Citi analyst Jeff Chung rates Xpeng at “Buy” and has a $34.70 price target for shares. That implies a 28% increase from its existing level. Chung’s views align closely with those of his peers. Xpeng, overall, appears to be the Street’s favorite Chinese EV stock. About 85% of analysts covered the stock rate at “Buy”, well above the 58% average Buy-rating ratio for stocks in the Dow Jones Industrial Average.
Xpeng saw a 266% increase year-on-year in the third quarter ended September 30 as it delivered 8,578 units. The company reported deliveries of 3,478 vehicles for the month of September. That’s a leap of 145% from the same period last year. And that’s not all. The company also saw the completion of its first batches of the P7 sedan earlier than expected. While some may think that Xpeng is playing second fiddle to Nio, it’s important to note that the Chinese EV market is the largest globally. Let’s not forget that both companies’ models do not compete directly with each other. With the market there for the taking, XPEV stock is certainly worth a closer look.