When you think about prepping for retirement, you might not instantly say to yourself: “Hmm, okay … what are some of the best growth stocks to buy right now?”
But maybe you should.
After all, with people living longer than ever, retirement nest eggs need to be bigger than they were 20 or 40 years ago. Not only does a longer life mean you’ll need more access to capital, it means you’ll have more time to recover from market downturns.
Translation: Retirement portfolios can and should be more aggressive than they used to be. With that in mind, here are the top 10 growth stocks to buy for the long haul (in my opinion).
Growth Stocks to Buy for Retirement: Under Armour Inc (UA)
Under Armour (UA) is one of the most compelling retail stocks in the market today. It may not have the global presence and breadth that Nike Inc (NKE) does, but if there’s another Nike-in-the-making it’s Under Armour, without a doubt.
UA is coming off a killer earnings report: Under Armour’s revenues shot up 30% in the first quarter, while net income surged 64%. Footwear revenue also soared 64% to $264 million in the quarter, due mostly to soaring sales of the Curry One, the basketball shoe of NBA MVP, 28-year-old Steph Curry.
Signing Curry in 2013 was a gift from the marketing gods to long-term investors. He’s tied up through 2024, and there’s no telling how big his brand can become.
Growth Stocks to Buy for Retirement: Facebook Inc (FB)
When retirement investors are looking for stocks to buy, one of the most important factors is stability. Facebook (FB), you might protest, is hardly stable. All one needs to do is look to MySpace to find a predecessor that failed miserably after early success.
But that would be a huge mistake.
It’s got 1.6 billion users across the world, and they come back to the site obsessively. Using all the data its users readily volunteer, Facebook is an advertiser’s dream platform.
Plus, it’s constantly looking for and investing in the next big thing so it stays diversified. Facebook owns Oculus, which is leading the charge into virtual reality; it owns WhatsApp (1 billion users) and Facebook Messenger (800 million users), and is pushing into live video.
Despite being worth $300 billion, FB is still a growth stock. With revenue expected to jump 42% this year, it’s not too late to hop aboard.
Growth Stocks to Buy for Retirement: Ellie Mae Inc (ELLI)
It’s more than likely you haven’t heard of Ellie Mae (ELLI). Ellie Mae is the company behind a popular software called Encompass, a cloud-based platform for mortgage originators.
Encompass is a “one-stop-shop” that enables mortgage originators to streamline the origination process, keep track of documents, minimize errors, and increase efficiency. Its Software-as-a-Service capabilities also allow it to scale quickly, and despite its rapid growth, ELLI has only captured a fraction of its potential customers.
Trailing revenues are just $253 million, but InvestorPlace Special Contributor and Motley Fool Senior Analyst Jason Moser sees a $5 billion market opportunity. In fact, Moser picked ELLI for InvestorPlace’s Best Stocks for 2016 contest, and he’s doing pretty well so far — shares are up about 50% this year.
Growth Stocks to Buy for Retirement: Globant SA (GLOB)
You’ll be excused for not having heard of Globant (GLOB), either. It’s a $1 billion technology services company that provides high-tech ad hoc solutions for clients.
Globant isn’t a company that consumers would be very familiar with: It helps clients build their “digital journey,” developing custom software that helps other companies build their own brands and interact with their customers.
GLOB uses Big Data on the back-end to inform how the services it builds interact with each customer.
Globant is an expert in high-tech, and many of its clients seek it out to help deliver a positive user experience via tech like cloud computing, software as a service and the Internet of Things.
Growth Stocks to Buy for Retirement: Alphabet Inc (GOOG, GOOGL)
Yet despite its pervasiveness, Alphabet is still growing by leaps and bounds. Analysts expect revenue to jump more than 16% from $75 billion to $87.3 billion in 2016. Obviously the Google search engine is where the bulk of its revenue comes from, but the Mountain View, California tech giant is covering a lot of bases.
Any number of its “moonshot” projects could eventually spark game-changing developments and windfall profits, and the company has already made amazing progress in fields like virtual reality, self-driving cars and fiber-optic cable networks.
Growth Stocks to Buy for Retirement: Amazon.com, Inc. (AMZN)
Like Alphabet, Amazon (AMZN) is another tech giant with practically endless potential. All you need to do is look at the company’s history to see the kinds of opportunities Amazon seizes. What started as an online bookstore grew to become the undisputed king of online retail.
Fast-forward to today:
- Amazon Web Services is the industry leader in cloud computing
- Amazon sells millions of tablets each year
- The company is building out its artificial intelligence know-how
- Amazon Prime Video competes head-to-head with Netflix, Inc. (NFLX)
- It’s even taking on FedEx Corporation (FDX) and United Parcel Service, Inc. (UPS), building out its own delivery network
Do we think CEO Jeff Bezos is one to miss out on growth opportunities as they arise?
Given the man’s motto is: “Your margins are my opportunity,” investors can sleep easy knowing Amazon will stay ambitious for years to come.
Growth Stocks to Buy for Retirement: Gilead Sciences, Inc. (GILD)
If you’re looking for growth stocks to buy for retirement, you’ll want to invest in a few names that are at least semi-proven. Enter Gilead Sciences (GILD), the $140 billion biopharmaceutical company that’s been growing revenues by an average of 32% for the last five years.
The company’s products treat a range of ailments, from HIV/AIDS to liver diseases to hepatitis C. As far as valuation goes, you’d be hard-pressed to find a growth stock with a more attractive one: GILD trades for just eight times earnings.
As baby boomers age into retirement, it won’t hurt to be invested in the healthcare sector. And when it comes to that area, you could do a lot worse than Gilead.
Growth Stocks to Buy for Retirement: Ulta Salon, Cosmetics & Fragrance, Inc. (ULTA)
Ulta Beauty (ULTA) is an extremely well-managed company whose primary concern is making people look fabulous. Ulta’s CEO Mary Dillon, however, is mainly concerned with shareholder returns — and she’s been delivering. Over the past five years, Ulta shares have soared nearly 300%, while the S&P 500 is up just 58%.
That’s largely due to the winning strategy of expanding store count while boosting same-store sales. In 2011, Ulta had 449 locations. By January 2016, it had 874 locations in 48 states and counting. Dillon plans to open about 100 stores per year as she aims to break the 1,200 mark.
Sales have grown by an average of 22% annually for the last five years, and given the excellent recent execution by the company, I wouldn’t bet against its continued growth from here on out.
Growth Stocks to Buy for Retirement: Priceline Group Inc (PCLN)
The online travel market is getting bigger by the year, and Priceline (PCLN) is at the center of it all.
Shares of the $66 billion air and hotel booking giant trade at just 16.5 times forward earnings, and despite being dominant for a number of years, the company keeps growing.
PCLN has grown revenue by roughly 25% annually over the past half-decade, while earnings have advanced about 37% per year over that time.
Between 2015 and 2017, earnings are expected to advance another 39%, while revs jump 35%. Add in the magical power of compound interest, and over the next five to 10 years, you can still expect some healthy growth out of Priceline.
Growth Stocks to Buy for Retirement: JD.com Inc(ADR) (JD)
Last but not necessarily least, we come to JD.com (JD), the second fiddle to Alibaba Group Holding Ltd (BABA) in the Chinese online retail market. If we’re actually looking for the best stocks to buy for a long-term retirement portfolio, there has to be some exposure to China, and specifically the Chinese consumer.
Yes, we hear a lot of talk about how China’s not growing as fast as some expected, but that doesn’t mean it’s not growing quickly. Last quarter, the U.S. GDP grew at a miserable 0.7%; the Chinese economy grew by more than 6% last year.
And as a Chinese middle class begins to emerge, that extra discretionary income will benefit retail, where JD.com, as a much smaller company, has greater growth potential than Alibaba.
As of this writing, John Divine did not hold a position in any of the aforementioned securities. You can follow him on Twitter at @divinebizkid or email him at firstname.lastname@example.org.