Unstoppable Growth Stocks To Buy: While the stock market has always had its ups and downs, 2020 was uniquely volatile. The ups and downs were dizzying, and many investors lost their taste for higher-risk/higher-reward-potential assets, including growth stocks.
Instead, they turned their attention to steadier, more reliable companies that are currently undervalued – the sort that fall into the “value” category.
Certainly, value stocks have their benefits – and in fact, some of the most successful investors of all time choose value stocks to the exclusion of nearly everything else. For example, Warren Buffett has always been a proponent of the value investing strategy.
In one discussion of his philosophy, Buffett said, “It’s far better to buy a wonderful company at a fair price, than a fair company at a wonderful price.”
That’s true, but it isn’t the only factor to consider when designing your own portfolio. High-growth stocks can generate returns unmatched by their value-oriented peers.
Benefits of Growth Stocks
Growth stocks have their own set of advantages. They are typically shares of companies that are growing rapidly – and in most cases, the companies are considered strong contenders for industry leadership positions. They are often a bit overvalued because investors are paying a premium for the company’s potential. As the growth is realized, shares increase in value – and that’s how investors realize returns.
Up-and-coming investor Cathie Wood – who some have called “the next Warren Buffett” – is a strong advocate for growth strategies. Wood said, “Betting your future on old-line companies is riskier than joining with entrepreneurs and startups.”
The good news for average investors is that you don’t have to pick a side when it comes to Buffett vs. Wood or value vs. growth. Smart choices and a balanced approach give you the best of both worlds. These are five unstoppable growth stocks to buy now.
DataDog Simplifies Complex Cloud Monitoring
It’s a digital world, and every one of today’s businesses knows that digital technology is critical to their function. While some companies still rely on traditional data centers – at least in part – the transition to cloud computing is moving more quickly than ever. No one doubts that the future of infrastructure will be heavily reliant on cloud-based technology.
The problem that IT professionals run into is an inability to monitor business-critical technology like networks, applications, and logs. Cloud computing makes this type of task much more complex than traditional data centers.
The information is there, but the amount is simply overwhelming – and it’s not available in any sort of format that technology specialists can reasonably expect to decipher.
DataDog (DDOG) has created a comprehensive solution to what was once an exceptionally complicated situation.
It has managed to pull previously invisible information into a single user-friendly tool. Now, IT professionals can monitor systems faster and more effectively, ensuring that there are no interruptions in service to the business and its customers.
In its most recent earnings call, DataDog reported that 2021’s first-quarter revenue went up by 51 percent year-over-year. Its customer base grew by 50 percent year-over-year, prompting the company to increase its full-year revenue guidance to $880 million – $890 million. That’s quite an improvement over 2020’s total $603 million in revenue.
DataDog is a prime example of an unstoppable growth stock. While it has its share of ups and downs, all signs point to rapid growth in both the short-term and the long-term.
Celsius Holdings Is Not Just An Athlete Favorite
Athletes might be the biggest consumers of Celsius Holdings’ line of health-enhancement beverages, but they aren’t alone.
Many people pursuing better-for-you options are gravitating towards Celsius. It boasts sparkling and still drinks in a variety of flavors, and it doesn’t contain artificial flavors, artificial colors, high-fructose corn syrup, aspartame, or preservatives. That’s a far cry from popular energy drinks that rely on sugar and caffeine.
Celsius (CELH) is a rapidly expanding company that has all the markers of a growth stock. In its most recent earnings call, management reported year-over-year revenue increases of 78 percent. Net income went up by 7 percent for the same period, and the stock has been added to the S&P SmallCap 600 Index.
Over the past 12 months, share prices have gone up by more than 700 percent, and analysts expect the bullish trend to continue. As with any stock, there are sure to be highs and lows, but most believe that buying now will deliver long-term gains.
Snowflake Is Buffett’s 1st IPO Since 1956
Even Warren Buffett can’t resist the pull of a growth stock once in a while, and Snowflake is that stock. Buffett’s Berkshire Hathaway invested in the company’s September 2020 IPO, marking the first IPO he put money into since 1956.
Snowflake (SNOW) is another tech disruptor that looked at problems created by cloud computing and found a solution. In this case, Snowflake chose to address a common complaint from large organizations – it was difficult and time-consuming to pull data together once it had been stored across multiple platforms.
With Snowflake’s software, all of that data is brought to a central location for easy retrieval. The benefits were so attractive that companies like Kraft Heinz (KHC) and PepsiCo (PEP) were immediately on board.
By the end of Snowflake’s fiscal 2021, it had increased its customer base by 73 percent year-over-year. It’s worth noting that approximately a third of the companies on the Fortune 500 list have adopted Snowflake’s technology.
Analysts project an increase of 88 percent in total revenue for fiscal 2022. While Snowflake is trading at a hefty premium, that sort of growth gives investors confidence that they will see returns.
Coinbase Is The #1 Crypto Trading Platform
Cryptocurrency is notoriously volatile, and that makes some investors nervous. However, it’s hard to sit the cryptocurrency craze out completely. After all, there are plenty of indicators that it will continue to be a part of the economy.
Instead of investing in cryptocurrency directly by purchasing specific tokens, many are looking at options to realize cryptocurrency-related returns through related companies. Coinbase falls squarely in that space.
Coinbase (COIN) is the top platform for trading cryptocurrency. Yes, share prices see some volatility when the value of certain cryptocurrencies drops, but all in all, this stock is widely considered a growth opportunity.
At the end of 2020’s first quarter, the platform had 56 million users. During the same period, it facilitated $335 billion in trades. Its net income came in at $771.5 million for the quarter, and industry experts are confident that figure will continue to rise.
Upstart Reimagined Credit Score Analysis
If there are two industries that can be counted upon for growth, they are technology and financial services. When you combine the two into a FinTech company, the potential is virtually unlimited.
Upstart (UPST) has been getting a lot of attention because it has reimagined the entire credit industry through the power of Artificial Intelligence (AI). Specifically, it created an evidence-based approach to evaluating credit risk that has little to no relationship with traditional credit scores.
It uses applicants’ employment history, education history, and up to 1,000 other data points to determine the likelihood of loans being repaid as agreed.
In addition to its business as a lender, Upstart is taking on partners in the financial services industry to revamp existing lending practices. Through Upstart’s proprietary algorithm, traditional financial services institutions have increased their loan volume – an important contributor to revenue – while decreasing the associated risk.
From a growth perspective, Upstart’s trajectory is almost vertical. The company’s total net income for 2020 was $6 million. To be clear, that $6 million was for the entire year, which makes the following quarter’s results astonishing. In the first quarter of 2021, Upstart reported a net income of $10.1 million.
While there is no guarantee that growth will be repeated for the remaining quarters, business leaders have indicated $40 million in net income is achievable. That’s a persuasive argument for any investor in search of unstoppable growth stocks to buy.
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.