When buying some of the best U.S. stocks to buy today, long-term growth becomes an important factor. Sustained profit increases over many years often shows smaller companies evolving into larger entities.
The average growth rate of the S&P 500 falls just under 10%. However, some companies have maintained much higher growth rates over the last five years. Others made large strides in moving toward positive earnings. Such moves set the stage for long-term profitability. Analysts also expect a few of these firms to greatly exceed S&P 500 averages over the next five years as well.
With that in mind, here are four of the best U.S. stocks to buy today for long-term growth:
Best U.S. Stocks to Buy Today: Secureworks (SCWX)
Secureworks (NASDAQ:SCWX) provides cybersecurity solutions to various clients. They work with about 4,400 clients located in 55 different countries. These clients range from the Fortune 100 to mid-sized businesses. This company became part of Dell in 2011. Although it spun off and launched an IPO in 2016, Dell remains the majority shareholder.
The company enjoyed average growth of 51.7%-per-year over the last five years. With its IPO and the increased importance of IT security, analysts expect that growth rate to rise to 75.7%-per-year over the next five years. Such a growth rate could make this one of the best U.S. stocks to buy today.
Despite such estimates, the stock has struggled. SCWX saw an original IPO price of $14-per-share when it launched more than two years ago. It trades at around $15-per-share today. A string of losses likely explains the struggle. However, analysts expect double-digit sales growth over the next two years. Many also expect the company to swing to profitability by fiscal 2020.
Growth should take off if it can become profitable. With the backing of Dell, a market cap of only about $1.18 billion, and a prominent position in the high-growth cybersecurity industry, the growth potential remains enormous.
Best U.S. Stocks to Buy Today: Smart Global Holdings (SGH)
Smart Global Holdings (NASDAQ:SGH) has provided these memory and storage products for over 25 years. Today, it stands as the largest DRAM provider in Brazil, although it also sells memory in the U.S., Europe and Asia. Due to high memory demand and pricing, both sales and profits have soared. Analysts project an average annual earnings growth at 69.84% for the next five years. This demand and growth make it one of the best U.S. stocks to buy today. Although the company located its head office in the Cayman Islands, most of its operations take place in California.
Despite its long existence, the stock has only traded publicly for a short time, launching their IPO on May 24, 2017, at a price of $11-per-share. Since then, their stock has risen as high as $56.69-per-share. The stock fell back from that March high. Today, it trades at about $32-per-share. The stock seems to have established a floor in the low $30-per-share range.
This lower stock price creates a unique buying opportunity. If the expected 2018 earnings of $6.28-per-share hold, this would take the forward price-to-earnings ratio to just above 5. Moreover, the market cap now stands at about $710 million. This indicates a high potential for growth. It could also make SGH stock a buyout target for either Micron (NASDAQ:MU) or another larger memory chip company. Like Micron, it could face headwinds if memory prices and memory demand fall. But with a low P/E and massive earnings growth is predicted, tech investors should watch SGH stock.
Best U.S. Stocks to Buy Today: Vertex Pharmaceuticals (VRTX)
Vertex (NASDAQ:VRTX) started as a biotech company. The Boston-based firm has evolved into one of the best U.S. stocks to buy today, despite its higher market cap. This company, worth around $45 billion, focuses on treatments for viral infections, autoimmune disorders and cancer.
Among the company’s more profitable drugs, Orkambi, a cystic fibrosis drug, helped take the company to profitability. A new drug in the same class, Symdeko, is expected to improve on Orkambi’s performance. The $272,000-per-year annual cost of Orkambi (and the higher cost of Symdeko) has drawn the ire of regulators. However, Orkambi’s profits have greatly helped to push VRTX stock higher. It has more than doubled over the last 18 months.
The company has maintained an aggressive growth pace for many years. It grew earnings each year by an average of 49%-per-year over the last five years. VRTX stock reported an annual profit starting in 2017. Now, analysts expect average growth of 66.5%-per-year over the next five years.
Analysts predict consensus earnings of $3.22-per-share for this fiscal year. This takes the forward P/E ratio to almost 55. For most stocks, this would constitute a high valuation. However, with its 66.5% growth rate, this is one instance where buying a stock with a P/E above 50 makes sense. The backlash from the cost of its CF drug could reduce revenue. However, both its current drugs and the drug pipeline should continue to push VRTX higher for some time to come.
Best U.S. Stocks to Buy Today: NMI Holdings (NMIH)
NMI Holdings (NASDAQ:NMIH) provides private mortgage guaranty insurance. The Emeryville, California-based firm provides private mortgage insurance. PMI allows borrowers who can only put down a small down payment to achieve the dream of buying a home. NMI protects both lenders and investors in case the borrower defaults.
The company launched its IPO in late 2013. The stock struggled, and it did not return to its IPO price of $14-per-share until 2017. After peaking at $21.62-per-share earlier this year, the stock lost more than one-third of its value. However, it has surged back and now trades close to $20-per-share.
Still, its growth could make it one of the best U.S. stocks to buy today. Despite its struggles, it achieved a growth rate of over 20% over the last five years. It turned profitable in 2016 and appears to have reached a sustained path of growth. As a result, analysts forecast an average 66.29% growth rate per-year over the next five years. Expected profits of $1.52-per-share for this fiscal year will come in 167% higher than the 57-cents-per-share in earnings the company saw in 2017.
This brings the forward P/E to just above 13. Moreover, NMIH stock holds a market cap of about $1.3 billion. The stock has a history of volatility. However, with sustained profit growth likely, an increase in the NMIH stock price will likely follow. Given the small size and the large growth rate possible, investors should take a look at this equity.
As of this writing, Will Healy is long MU stock. You can follow Will on Twitter at @HealyWriting.
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