The long-looming Federal Reserve rate-hike decision stymied the stock market this week — though in the grand scheme of things, it shouldn’t have.
The news — which in this case is that the Fed will keep its zero-interest-rate policy in place — will almost certainly inject a good dose of near-term volatility back into the market, but when all is said and done, it’s not going to pull a truly great stock down — or send a truly bad stock higher.
In other words, the overhang of a critical interest rate decision is gone, and soon the topic just isn’t going to matter much either way a couple weeks from now. Investors will have moved on to obsess about more recent news by early October at the latest.
With that reality on the table, here’s a closer look at 10 high-growth stocks to buy now:
Super-High-Growth Stocks to Buy Now: Comfort Systems USA (FIX)
A heating and air conditioning repair and installation outfit isn’t exactly the first name investors think of in their hunt for stocks to buy as soon as possible, but Comfort Systems USA (FIX) passed the test.
Revenue is on pace to grow nearly 12% for FIX this year, and though analysts say its growth pace should slow to a bit under 9% for 2016, that may be a bad bet.
Comfort Systems USA has topped earnings estimates by an average of more than 70% for its past three quarters, and is on pace to grow its per-share bottom line by 54% this year.
Super-High-Growth Stocks to Buy Now: Gilead Sciences (GILD)
While Comfort Systems USA may have been an unexpected name on a list of high-growth stocks to buy, Gilead Sciences (GILD) isn’t.
This biotech stock’s top line is projected to swell by nearly 27% this year, while its bottom line is expected to grow 44%.
That growth, of course, is being driven by sales of relatively new hepatitis C drugs Harvoni and Sovaldi, both of which come with a jaw-dropping four-figure price tag.
While observers are quick to point out that a strong 2015 has largely quelled any hope for sales and earnings growth in 2016, the company may have something new up its sleeve. Gilead recently raised $10 billion via a debt offering, suggesting an acquisition could be on the way.
Super-High-Growth Stocks to Buy Now: Commscope (COMM)
Commscope (COMM) is anything but a household name, even though there’s a good chance at least one of its products is being used in most of the developed world’s homes.
Commscope makes coaxial cables, electrical wiring, networking equipment (for carriers), RF antennas (again, for carriers) and a whole bunch of other equipment increasingly needed as the world’s digital data demands continue to swell.
But why exactly is COMM on a list of stocks to buy regardless of the recent roller-coaster ride for interest rates? Because the rising demand for data — and wireless communications in particular — isn’t going to slow down anytime soon.
The proof of the premise is in the projected numbers. After a lackluster 2015, a smart acquisition of the Broadband Network Solutions business from TE Connectivity (TEL) and, more recently, its acquisition of Airvana, (both of which put some higher-level hardware on the Commscope menu) mean sales and profits are expected to skyrocket. Specifically, Commscope is looking for revenues to grow to the tune of 22% next year, with per-share earnings for COMM expected to grow 21%.
Super-High-Growth Stocks to Buy Now: T-Mobile (TMUS)
Yes, this is the same T-Mobile (TMUS) that’s co-waging a price war — with Sprint (S) — against bigger names AT&T (T) and Verizon Communications (VZ).
T-Mobile is ultimately going to lose that war, but unlike Sprint, it’s fighting a compelling fight not marred by reckless spending and dodgy execution.
As evidence to that end, despite Sprint’s “anything goes” growth effort, T-Mobile US recently surpassed Sprint in terms of market share to become the country’s third-biggest wireless telecom carrier.
It’s still not a trade for the faint of heart.
Although the pros were calling for operating profits to more than double between 2015 and 2016, the recently unveiled plan to offer its version of the “always own the newest iPhone” plans that have surfaced recently could end up crimping what would have otherwise been healthy margins. But, it may well be worth the pain to capture market share and eventually achieve wider profit margins through greater scale.
For that reason, TMUS has earned a spot on a list of growth stocks to buy now, even if it is the proverbial 11th man on a 10-man team.
Super-High-Growth Stocks to Buy Now: Sabre (SABR)
The company’s name may not ring a bell, but some of its brand names might.
Sabre (SABR) is the corporation that provides the architecture interconnecting hotels, airlines and auto-rental locations with the popular websites that market such services.
For example, last year, online travel-booking agent Tripadvisor (TRIP) tapped Sabre to build a new airline-ticket booking tool for travel agents.
As for why SABR is on a list of growth stocks to buy, one only has to look at the company’s consistent growth since 2012. With the top line growing 6% in 2013 and 4% in 2014, but on pace to grow just under 13% in 2015, then projected to grow a little more than 13% next year, Sabre clearly is finding a winning formula.
The kicker: Just this week, Sabre announced it was looking to expand its presence in Europe, where it currently controls only about 15% of that sizable market.
Super-High-Growth Stocks to Buy Now: Norwegian Cruise Line (NCLH)
Superficially speaking, it would be tough to justify stepping into stock that caters to higher-end vacationers at a point when it looks like the global economy could stumble.
That notion is underscored when that company — which has recently relied on borrowing to fuel its rapid growth — may be facing higher interest rates sooner or later.
One would be relatively wrong for coming to those conclusions, however, if one made them about Norwegian Cruise Line (NCLH).
The reality is, what consumers say and what they do are two different things. This is even more true for the fairly affluent (or extremely affluent) who are more apt to spend time and money on a cruise.
Barring a complete global meltdown, odds are good the same rising tide that’s going to boost Norwegian Cruise Line by 40% this year and a likely 15.5% next year is going to keep going strong for a while.
But what about the prospect — or reality — of rising interest rates?
It should be part of the discussion, to be sure. The bulk of the company’s recent growth has been led by debt-driven acquisitions and a decent dose of new ship purchases. But if a quarter-point rate hike, or even an eventual half-point increase, in the federal funds rate is going to prove a stumbling block for NCLH, then that fiscal weakness would have become clear by now.
It hasn’t.
That’s why Norwegian Cruise Line Holdings is one of a few solid, long-term growth stocks to buy now … because it has spent money well and cultivated synergies with its purchases.
Super-High-Growth Stocks to Buy Now: Facebook (FB)
Broadly speaking, the bigger and older a company gets, the more difficult it is to post increasingly higher growth numbers. Sooner or later, a certain degree of market saturation sets in, and a company in some ways starts competing with itself.
Incredibly enough, this doesn’t seem to be the case with Facebook (FB).
After being around for more than a decade, Facebook still is not only growing the top line, but it’s figuring out ways to accelerate that growth. Specifically, despite what’s apt to roll in as eye-popping sales growth of 38% this year, analysts expect top-line growth of more than 35% next year.
It’s not that hard to believe, given how FB has yet to hit full throttle on some of its advertising venues. Case in point: Facebook is finally doing well with mobile ads, but has yet to fully tap the potential of video ads and advertisements on Instagram.
That’s coming though, and soon.
Super-High-Growth Stocks to Buy Now: Vulcan Materials Company (VMC)
There’s nothing particularly scintillating about a building and construction supply company … except for 14% sales growth this year, and the same number likely again next year.
That alone is enough to say Vulcan Materials Company (VMC) is one of the market’s better and most overlooked growth stocks to buy now.
And that’s not even the best reason.
This year is also something of a breakout year for VMC in the sense that it has finally achieved enough scale to seriously widen its profit margins. The company is on pace to expand 2014’s per-share profits of 93 cents to $2.08 per share this year, and to earnings of $3.47 per share in 2016.
The prod for this growth isn’t apt to wither away anytime soon though. Public funding for infrastructure projects (which are right in Vulcan Materials’ gravel and aggregate wheelhouse) is finally starting to flow relatively freely again, while residential construction — as firmly as it has grown of late — has yet to come anywhere near pre-2008 peak levels.
Super-High-Growth Stocks to Buy Now: Celgene (CELG)
Biopharma name Gilead Sciences has already been named as one of the market’s top high-growth stocks to buy regardless of the future for interest rates. But, in that the biotech and biopharma industry tends to trade independently of the rest of the market — and irrespective of interest rates — there’s certainly room for another biopharma name on the list.
That other worthy biopharma name is Celgene (CELG).
There’s nothing particularly catalytic in the hopper for CELG. It’s simply a solid biotech play, as the underlying company has a reasonably well-diversified portfolio of cancer drugs like Abraxane and Revlimid, and a similarly impressive pipeline.
The latter looks like it’s going to be enough to drive 21% sales growth this year, with the combination of the current portfolio and pipeline poised to also drive an expected 21% revenue growth rate for next year.
Super-High-Growth Stocks to Buy Now: Palo Alto Networks (PANW)
Last but certainly not least, put Palo Alto Networks (PANW) on a list of solid high-growth stocks to buy now.
If the name rings a bell, it may be because PANW was pegged as a buy-worthy stock just last week after the cybersecurity outfit wowed investors with its previous quarter’s year-over-year revenue growth of 59% … but, it’s a name and a growth rate that merit reiterating.
Critics and naysayers will be quick to point out that although the company is operationally profitable, it is spending heavily to buy much of that growth, and on a GAAP basis is still losing money.
The nuance those pessimists are overlooking, however, is that as of last quarter’s numbers, even the GAAP loss is starting to shrink now that Palo Alto Networks has significant scale.
It will still take a long while for the company to swing to a true profit, but it’s on that path, and the market may reward PANW for remaining on that path en route to the end zone of profitability.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
