StemCell Therapy

Theres a lot to like about growth stocks. They can provide a healthy shot in the arm to an otherwise flat portfolio. Which makes sense. When a company is growing faster than the market average, the stock price usually isnt far behind. But to really reap the benefits, high-growth stocks offer the most potential bang for the buck.

So whats the difference between a regular growth stock and a high-growth stock? The answer is maturity.

Now, there are a lot of ways to pinpoint a growth stock. The classic metric is finding one with a high price-to-earnings (P/E) ratio. But most high-growth stocks are still flying under the radar of the average investor. Thats because theyve got a lot of growing left to do.

Finding a stock that has yet to hit its growth spurt can be like looking for a needle in a haystack. Theyre not quite the talk of Wall Street yet. But theyve got all of the characteristics in place to dominate their respective industry.

Lets start with a classic. Amazon (Nasdaq: AMZN) has been considered a growth stock for most of its existence. The e-commerce giant started off by going years without turning a profit. Instead of taking the opportunity to excite investors with booming profits, CEO Jeff Bezos reinvested nearly every dime the company made back into itself.

It proved to be a fruitful move. These days, Amazon controls nearly50% of all e-commerce. And it got there by focusing on growth. In the meantime, investors that stuck with the company through its heady adolescence have been handsomely rewarded.

Amazons P/Estayed above 70 from 2019 to 2020. So investors still believe it will have high earnings growth. But beyond world domination, it cant possibly maintain the growth trajectory its already undergone.

Despite the fact that Amazon is an extremely large blue chip stock, its EPS growth expectations over the next five years sit around 30%. So its still a solid investment If you can afford to get in. Heck, even if you cant afford a full share, theres a solid case to be made for investing in Amazon.

But for our purposes, were looking for a stock thats not just in a position to outpace the greater markets But one thats positioned to blow the doors off the market average.

And one thats in a perfect position to do so is Digital Turbine (Nasdaq: APPS).

As the companys ticker suggests, this potential high-growth stock is in the mobile app business. But its positioned in a rather unique way. Digital Turbine acts as a third party that works with wireless carriers to preinstall apps on new cell phones. It then sells available slots to companies like Uber, Spotify and Amazon that want their apps on phones. And business is going well.

Digital Turbine has also developed a strategic partnership with Samsung, the largest cellphone manufacturer in the world. This arms the company with a potent ally in the world of mobile advertising. Digital Turbine also boasts an impressive 92 P/E ratio that could signal significant future growth At least until the whole cell phone fad dies out. But until that happens, Digital Turbine could be just the propellant a sluggish portfolio needs.

The second potential high-growth stock is BioLife Solutions (Nasdaq: BLFS). This companys been around for a little longer than Digital Turbine. But that just means its had more time to perfect what it does.

BioLife is a leader in the medical instrument and supply industry Thanks in no small part to some state-of-the-art developments its spearheaded.

Sorry in advance for the 10-dollar words, but BioLife develops, manufactures and supplies:

While this might not sound all that important to the average investor, these two developments are huge. This biobanking technology is used in regenerative medicine Its essential for medical research And it plays an essential, supporting role in drug and therapy development.

In other words, when theres a medical breakthrough, theres a decent chance that BioLife played a role. And in an age when nobody knows when the next disease will pop up, BioLife Solutions has positioned itself to play a vital role treating it.

BioLife also boasts strong, innovative leadership in its CEO, Michael Rice, and a high P/E ratio over 170 Making this an enticing high-growth stock.

Cybersecurity is big business. But its a pretty crowded field. Which is why a company like FireEye (Nasdaq: FEYE) can easily get looked over by investors. There are, however, plenty of reasons to give this potential high-growth stock a second look.

Year-over-year sales growth of just 6% seemingly hit a bit of a snag this year. But whats not accounted for was the companys massive (and expensive) shift to cloud-based services.

By jumping into the subscription-based model, FireEye has set itself up with a strong baseline of future revenue And it still has plenty of time to put the pedal to the metal as cybersecurity demands increase.

With a broad array of cybersecurity products for healthcare, government, financial services and personal cloud computing, FireEyes seasoned leadership is proving to be guiding the company in all of the right directions.

A company on the rise can make a huge difference in any investors portfolio. But like all investments, they come with some inherent risk. And because most high-growth stocks dont offer dividends (but there are exceptions like these dividend growth stocks) the only way to make money off them is by selling them in the future.

But thats not the only risk. When it comes to young companies, missing expectations can cause a lot more tumult both for the business and stock price than it would for a blue chip stock. So before you take the plunge on any investment, its important to first come to grips with your risk tolerance.

If you decide that high-growth stocks are right for you, we wish you good investing. If however, you dont have the stomach for it, there are plenty of other investment opportunities out there.

And if youd like to have up-to-the-minute market analysis delivered to your inbox every day, be sure to sign up for the Investment U e-letter below.

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3 High-Growth Stocks to Watch in 2020 - Investment U

This entry was posted on September 3, 2020 at 5:56 pm and is filed under Regenerative Medicine. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed. |