Although the stock market is trending modestly higher thus far in 2015 — the S&P 500 is up about 3% to date — there’s been more than enough worry to go around, and hunting for the best stocks to buy ain’t as easy as it used to be.
Anxiety surrounding the potential for a Greek exit from the eurozone (the dreaded “Grexit”), as well as the brief but precipitous Chinese stock market crash, has put Wall Street on tilt in recent months.
On top of that, the International Monetary Fund thinks other global issues, like the volatile dynamic between Russia and Ukraine and the unrest in the Middle East, pose major threats to the stock market today.
With that tumultuous environment in mind, now might not seem like the best time to be hunting for growth stocks to buy. But the truth of the matter is that a handful of growth stocks are trading at fire sale prices.
Here I highlight shares of three companies — Ambarella (AMBA), NXP Semiconductors (NXPI) and Facebook (FB) — and why these three high-growth names are some of the best stocks to buy now.
3 Best Growth Stocks to Buy Now: Facebook (FB)
Market Cap: $270 billion
YTD Performance: +26%
Facebook (FB) is one of the precious few stocks on Wall Street that has, in my eyes, almost too many bullish catalysts: its Oculus Rift virtual reality platform, recent monetization of Instagram and the long-awaited arrival of the “buy” button. With these on the forefront, FB stock has tons of avenues for explosive growth.
But not only is Facebook stock firing on all cylinders due to its many company-specific strengths, but — believe it or not — large-cap growth stocks like FB are trading at historically low prices as a group.
Click to Enlarge Check out the breakdown from the JPMorgan (JPM) recent quarterly “Guide to the Markets” report:
Counterintuitively, growth stocks traded at steep discounts to value stocks through the end of the second quarter. In the case of FB stock, that may not last much longer as investors are catching on, sending shares are up around 20% in the last month alone.
3 Best Growth Stocks to Buy Now: NXP Semiconductors (NXPI)
Market Cap: $23 billion
YTD Performance: +18%
Shares of NXP Semiconductors (NXPI) are walloping the market this year; their 18% return is a full 15 percentage points better than the S&P 500. However, unlike FB stock — which has flourished recently — NXPI stock is off about 20% from its 52-week highs less than two months ago.
While NXPI is probably best known in the pop-investing world as the Apple (AAPL) chip supplier whose near field communications technology makes Apple Pay possible, NXP is far more than just a play on Apple Pay.
The company is also a market leader in the EMV chip-and-PIN market that’s changing the mechanics behind traditional credit cards. Instead of a magnetic strip, chip-and-PIN technology makes identity theft and fraud far more difficult by embedding personal data on a chip. It’s not just a great idea, but as I recently noted, it’s destined to catch on quickly:
“Come October, retailers will become financially responsible for fraudulent transactions if they don’t adopt to EMV readers, making rapid adoption likely and creating a beautiful narrative for NXPI stock.”
Trading at a forward price-to-earnings ratio below 14 (as its pending merger with Freescale is set to make it one of the largest chipmakers in the world), NXPI is easily one of the 10 best stocks to buy now in my book.
3 Best Growth Stocks to Buy Now: Ambarella (AMBA)
Market Cap: $3.5 billion
YTD Performance: +135%
Last but certainly not least, chipmaker Ambarella (AMBA) is our final growth stock to buy today. Known primarily as the chip supplier behind the wearable cameras GoPro (GPRO) is known for, AMBA has intelligently diversified itself into a variety of high-growth end markets.
Ambarella is the tech company quietly making possible some of today’s most exciting technological innovations, from action cameras and drones to home security and automotive cameras. Citing its tendency to seek out high-growth markets, I dubbed AMBA “the best growth stock you’ve never heard of” back in November 2014, raving that:
“It’s almost as if AMBA was custom built by a mad Wall Street scientist to be the perfect growth stock.”
Since then, shares are up 144% — up more than 130% in 2015 alone, and its tremendous performance has virtually guaranteed Trader’s Advantage editor Jon Markman the crown in InvestorPlace‘s Best Stocks for 2015 competition.
With Q2 revenues and earnings expected to jump 73% and 118%, respectively, AMBA is still one of the best stocks to buy for your money today.
As of this writing, John Divine was long shares of AAPL stock and Jan 2017 $105 NXPI call options. You can follow him on Twitter at @divinebizkid or email him at editor@investorplace.com.
