Buy growth stocks early in the company’s rise to greatness. Watch revenue and earnings rise. Reap those big returns. Then practice what you've learned with our free stock market simulation.
BEST GROWTH STOCKS TO INVEST IN
Here are some of the best growth stocks to invest in according to Insider Monkey.
|FB||Meta Platforms Inc.|
TOP GROWTH MUTUAL FUNDS TO INVEST IN
Check out some popular growth funds according to Morningstar.
|AMCPX||American Funds AMCAP Fund Class A|
|FLCNX||Fidelity Contrafund K6|
|LGRNX||Loomis Sayles Growth Fund Class N|
|PJFZX||PGIM Jennison Growth Fund-Class Z|
|POGRX||PRIMECAP Odyssey Growth Fund|
WHAT ARE GROWTH STOCKS?
If you possess stocks in a successful company whose earnings, relative to the market, are expected to continue growing at an above-average rate, you’ve got yourself some growth stocks. Rather than yielding a super high income, growth stocks tend to increase in capital value. There’s a lot of hype surrounding these special (and pricey!) stocks; and it’s for good reason. They typically have impressively high price-to-earnings ratios. In most cases, the company would prefer to reinvest retained earnings in capital projects, so it’s not typically common for growth stocks to pay dividends. Instead, growth investors tend to receive returns from future capital appreciation. The return makes it worthwhile, but be prepared to pay top dollar to get involved in the growth game.
Philip Fisher, a pioneer in growth investing, wrote a book in which he spends an entire chapter urging readers to purchase shares of superbly managed growth companies – specifically technology companies. The pace of change in the tech sector creates an environment that’s ripe for disruptive innovations. Fun fact: Fisher started out as a value investor! His style evolved following lessons learned in the 1929 stock crash. He learnt the hard way that over time, a well-selected growth stock would substantially outperform a statistical bargain. Fisher emphasized, repeatedly throughout his career, the value of long term investing.
OTHER TYPES OF GROWTH INVESTING
Growth Mutual Funds
Growth mutual funds are best characterized by their laser focus on capital appreciation. As with growth stocks, dividend payout is a rarity, so if that’s what you’re after – keep walking. You’ll also require a holding period of five to ten years; so make sure your time horizon allows for that. Portfolios would consist of companies with above-average growth in earnings – that of which would be reinvested into things like acquisitions, expansion, research and development, etc. Growth funds are for the risk-hungry. The potential is high but the risk may be higher, so make sure you have the stomach for it before investing.
Growth stock dividends are ideal for those who find the predictability of dividend-paying companies boring, but whose risk tolerance is not particularly high enough to experiment with the more volatile companies. Growth stock dividends offer an appealing combination – the security of a consistent dividend along with the excitement of an increasing stock price. Dividend growers represent a group of companies who reinvest part of their earnings in the business and distribute the rest to stockholders. Rising profits subsequently mean rising stock prices along with rising dividends.
GROWTH INVESTOR RESOURCES
Growth Investing Software
HGSI Investment Software: with its easy-to-interpret visual presentation and broad range of technical tools, this software performs comparative analyses of many groups of securities.
F.A.S.T. Graphs : Two subscription options are offered to allow for deeper and faster stock research.
Growth Investing Books
Here are some must-reads if you’re serious about getting into the growth investing game.
Benjamin Graham and the Power of Growth Stocks:Lost Growth Stock Strategies from the Father of Value Investing
GROWTH INVESTING INDICATORS
Brand New Technology
Brand new technologies tend to be unproven, and growth companies spend a lot of money on development and ramping up production.
Crazy PE Ratios
Growth stocks typically have super high PE ratios . A company has worth beyond its earnings and its important to balance intrinsic value against the money the company makes. Future potential should also be priced in.
Bump in the Growth Story
It’s inevitable that all growth stories will eventually fizzle out. Like a pendulum, the market is forever swinging. When growth comes to a halt, a more realistic per share price for the stock settles in. There are two possible outcomes here: either the company is now correctly valued (and was grossly overrated in the past) or the company is currently under-valued and poised for a strong rebound in the near future.
BEST STOCK NEWSLETTER (November 6, 2021 UPDATE)
The Motley Fool Stock Advisor has won our Award for the Best Stock Newsletter for the last 4 years.
We have been tracking ALL of the Motley Fool stock picks since January 2016. That's over 5 years and over 120 stock picks. As of Friday, Novermber 6, 2021, 19 of their 24 stocks picks from 2020 are up and the average return is 106% compared to the SP500's 50%. Take a look at some other FACTS about their service:
- The average return of their 24 picks from 2019 is up 108% compared to market's 68%; and 20 of those 24 are profitable
- Of their 24 stock picks from 2018, 20 are up, the average return is 248%, and 11 have more than doubled in price
- From 2017, all 24 of their stock picks are up, 12 have more than doubled and the average return is 254%
- And from 2016, 20 of 24 are up, 17 have more than doubled and the average is an amazing 451% ( thanks in part to them picking SHOP)
- So the point is that not every one of their picks goes up, but the longer you hold them, the better they have performed, at least since 2016
- Tesla (TSLA) picked January 2, 2020 before the crash and it is up 1,320%
TIP FROM THE AUTHOR: If your portfolio is not up 233% over the last 5 years with 84% profitable trades, then you are investing missing out on big profits. Be pro-active and buy stock tips from this trusted source instead of being re-active and buying stocks that everyone else is buying! A subscription to the Fool will probably be the best investment you ever make. They already have over 1,000,000 subscribers.
Normally the Fool service is priced at $199 per year but they are currently offering the next 12 months for just $99 on THIS NEW SUBSCRIBER PAGE.
GET UP TO $1,000 IN FREE STOCK
WHEN YOU OPEN A ROBINHOOD BROKERAGE ACCOUNT
Robinhood was the first brokerage site to NOT charge commissions when they opened in 2013. They just past 10,000,000 accounts and to celebrate they are offering up to $1,000 in free stock when you open a new account.
Here's the details: You must click on a special promo link to open your new Robinhood account. Then when you fund your account with at least $10, you will receive one stock valued between $5 and $250. Then, you will get a link to share with your friends. Every time one of your friends opens an account, you will receive another free stock valued between $5 and $250. Click here to learn more about this Special Robinhood offer.
(before it's too late)