5 Stocks That Have Potential To Grow Fast

When Amazon (AMZN) launched, many investors ignored it – same for Apple (AAPL), Facebook (FB), and Tesla (TSLA).

In their early days, these companies looked risky, and their potential for success appeared limited. Of course, the naysayers have since been proven wrong in a big way. Amazon is valued at $1.6 trillion, Apple at $2.2+ trillion, Facebook at $760+ billion, and Tesla at $830+ billion. 

Those willing to take on the risk associated with these startups were rewarded with fortunes. Of course, for every one of these stories, there are hundreds of companies that didn’t make it big – or their investors lost heavily. 

Is there a fool-proof method of pinpointing which companies will eventually see massive returns and which will ultimately fail? Well, no – though some market experts like Warren Buffett, Chamath Palihapitiya, and Carl Icahn are right more often than most. But one factor to consider as you search for the next high-growth addition to your portfolio is rapidly increasing revenues. 

These are five stocks that have potential to grow fast, based on the steep incline in their revenues. They aren’t especially profitable yet, but that’s likely to come – and when it does, those who invest today may be rewarded for their faith. 

iRhythm Technologies Revolutionizing Cardiac Health 

Any reliable device that makes monitoring cardiac health easier is certain to be in high demand, as cardiovascular disease remains the leading cause of death in the United States.

In 2020, iRhythm Technologies (IRTC) stock saw 248 percent growth, thanks to its wearable Zio heart monitor.

The device looks quite a bit like a smartwatch, and it can be worn by patients for up to two weeks. That means on-going access to critical data with little or no disruption to patients’ daily routines. 

Because this monitor is so convenient, an astonishing 98 percent of patients use it as directed. To date, more than two million Zio monitors have been issued, and the device has been evaluated in dozens of peer-reviewed journals.

Investors flocked to iRhythm Technologies stock, because they saw its rapid revenue growth. In the third quarter alone, revenues went up by 32 percent year-over-year to a total of $71.9 million – and that’s with the pressure of COVID-19 to contend with.

Granted, the company is still losing money. In the third quarter, its net loss totaled $0.17 per share or $4.7 million. Nonetheless, that’s a year-over-year gain, as the same period in 2019 netted a loss of $0.72 per share or $18.3 million. 

There is every reason to believe that demand for iRhythm products will grow quickly over the next two years. When the company starts generating profits, those who invest now may see big returns. 

MakeMyTrip Has 5 Million+ Customers

The travel and hospitality industry had what can only be described as its worst year in decades, thanks to the COVID-19 pandemic.

Businesses turned to virtual meetings, and leisure travelers simply stayed home. However, this industry is known for its ability to bounce back, and sooner or later flights will be full again.

The travel-related companies that weather this particular storm are bound to see growing profits as business travel and tourism resumes. 

MakeMyTrip is an online travel agency that specializes in securing low-cost airfare, booking hotels, and putting together discount travel packages. It is based in India, and it boasts more than five million satisfied customers.

True, share prices dropped precipitously in March when the US stock market crashed, but today they are back to near-pre-pandemic levels, and many industry experts believe there is no place to go but up.

Those who invest now may see solid returns if they settle in for the long-term. 

OneConnect Financial Solves A Big Problem

Not so long ago, the world of finance was a mystery for average consumers. Understanding the ins and outs of trading or managing retirement accounts was thought to be the exclusive function of professionals. 

A variety of companies stepped up to make financial education and tools available to everyone, and they have been widely embraced.

Do-it-yourself investing is now mainstream, and many large financial institutions are integrating consumer-friendly fintech solutions into their account management platforms. 

OneConnect Financial Technology is a Chinese company that falls somewhere in-between. It creates cutting-edge technology for financial institutions that is intended to improve the customer experience.

It works to increase the value added by financial institutions, so that they aren’t set aside in favor of a DIY system. 

Among other products, OneConnect offers financial institutions access to Artificial Intelligence (AI), big data and related analysis, and blockchain. Partnership with OneConnect gives traditional financial institutions a competitive edge – a must as more consumers consider self-service options.

That’s an attractive value proposition, and OneConnect’s revenues are growing. If profits follow, as they are expected to do, investors may see strong increases in share prices. 

Cronos Group Could Benefit From Regulatory Reform

The years-long debate about Federal marijuana legalization has taken a temporary backseat in the US, but individual states continue to expand regulations permitting medicinal and recreational use. Canada has legalized all forms of cannabis, and it appears that Mexico will soon follow.

In short, cannabis companies are seeing large market expansions each year, and investors are anxious to get on board. The question is, which company is most likely to deliver strong returns? 

Many investors are enthusiastic about Cronos Group, particularly since Altria Group, a major producer of tobacco products, made a large investment of its own.

That enthusiasm became even more pronounced with the 2020 presidential election results, as the likelihood of federal legalization in the US appears higher with a Democrat in office.

Cronos saw revenues increase by 96 percent for the third quarter of 2020, bringing in a total of $11.36 million. For the moment, the company hasn’t been able to generate profits, but most believe that situation is only temporary. 

If profits follow the same path as Cronos revenues, shareholders may start seeing positive results within the next 12 months. 

Eargo Set For Price Boost When Profits Come

The baby boomers are solidly in the retirement-age bracket. This group continues to command a huge spending power, and many companies are stepping up to meet their needs.

Eargo is taking a new approach to hearing aids. The devices are more reliable, easy to recharge, and less visible than anything predecessors offered. 

Eargo took its stock public in mid-October, and shares were up more than 87 percent in the first day of trading.

Most industry experts believe that figure will continue to go up as the company becomes profitable. Those that invest now may be the big winners, as share prices may never again be as low as they are today. 

The bottom line is that investing always carries risk, and it is impossible to know which company will be next to see dramatic growth. However, careful research can increase your odds of picking a winner if you look at common factors among successful companies.

One signal that a company has potential to deliver above-average returns for shareholders is a mismatch between revenue and profit in a newer business. The business may not be profitable yet due to research and development expenses or the costs of creating supply and distribution infrastructure, but growing sales are a good sign. When the profits do come, early investors benefit most.

---

The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.