When you are a long-term investor, it is likely that your portfolio will encounter dips from time to time. When this happens, these red days can represent a great opportunity for you to buy your favorite companies on sale.
Without further ado, let’s get right into which top three growth stocks you should consider buying right now.
E-commerce is dominating the retail space and Alibaba (NYSE: BABA) offers investors a lot of growth potential. Based in China, where the e-commerce market is expected to grow to 19.6 trillion yuan ($3.0 trillion) by 2024, it’s obvious to see why this industry leader is a good choice.
Known as the Amazon of China, Alibaba reported revenue growth of 34% year-over-year (YoY) in the June quarter. While it is bringing in high profits, the firm is also investing its “ excess profits and additional capital to support our merchants and invest in strategic areas to better serve customers and penetrate into new addressable markets.”
This kind of thinking is exactly what growth investors like to see from an investment and many expect this company to keep posting solid earnings for many years to come.
While Chinese stocks have taken a tumble recently, with Alibaba shares down almost 40% in the last six months, the e-commerce industry is likely one that will continue to thrive in the future. Alibaba is also such a massive company that it should be able to alter its operations to conform with any government regulations.
While not the safest growth stock on our list thanks to the recent turbulence in China, this could still be a great investment for those looking for some international diversification in their portfolio.
What started out as a company that posted out DVDs to its clients is now the biggest streaming service in the world. Not only has Netflix (NASDAQ: NFLX) dominated this section of media entertainment but it is also beating traditional production houses at award shows and is favored above giants Amazon and Disney’s rival streaming services.
The stock skyrocketed during the pandemic as more people than ever turned to it for entertainment during the COVID-19 lockdowns. Shares are up almost 80% since the onset of the pandemic and have continued this upward trajectory even as restrictions have been lifted across the globe.
In the second quarter, Netflix recorded sales growth of 19% YoY to $7.3 billion, while its operating income jumped 36% YoY to $1.8 billion. On the call, Netflix stated:
“COVID has created some lumpiness in our membership growth (higher growth in 2020, slower
growth this year), which is working its way through. We continue to focus on improving our service for our members and bringing them the best stories from around the world.”
While it experienced hyper-growth during the pandemic, Netflix is still drawing more subscribers to its services, albeit at a slower pace. To fuel continued growth, the firm has invested heavily in original content and has started to move into the gaming space. This entertainment stock is a great long-term growth investment as many expect it to remain the ultimate digital media streamer and production house.
Keeping on the technology trend, Square (NYSE: SQ) is another top growth stock pick. The financial services and digital payments company has soared in popularity over the past few years as people rely on its services to manage transactions easier and faster.
In the second quarter, Square’s gross profit jumped 91% from a year ago. Its Cash App profit was up 94%, seller profit jumped 85% from a year ago, and net revenue excluding Bitcoin came in at $1.96 billion for the quarter, an 87% rise YoY.
In August, the Jack Dorsey-owned firm also announced its plans to acquire Australian ‘buy now, pay later’ leader, Afterpay, for a staggering $29 billion. This buy will push it into the booming installment loan market, representing another lucrative business opportunity for the company. In April, Square also acquired a majority ownership stake in TIDAL, a global music and entertainment platform. This purchase will allow it to provide artists the tools to participate in the economy and grow as entrepreneurs, and also shows how acquisitive and determined Square is to move into new spaces to boost revenue.
Over the past year, Square shares have gained 28%, providing consistent gains to shareholders. As a leader in the fintech space, and judging by how many sectors the company is going after, Square is looking like a great growth bet.
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Content Writer at MyWallSt
Nicole's favorite stock is Etsy because she loves its original and handmade items. She believes people are going to stop buying mass-produced items and start purchasing ‘one of a kind’ fashions and furnishings. In a world of sameness, Etsy has the advantage.