7 A-Rated Growth Stocks That Are Loaded With Long-Term Potential

growth stocks - 7 A-Rated Growth Stocks That Are Loaded With Long-Term Potential

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The markets have largely recovered from the March bloodbath, so bargains aren’t as common as they were a few months ago. However, if you choose high-performance growth stocks, you can still enjoy the benefit of watching your investment increase in value at an accelerated rate.

These seven stocks are A-rated picks from my Portfolio Grader Tool. They are on growth tracks, and positioned to continue outperforming the market:

  • Zoom Video Communications (NASDAQ:ZM)
  • FormFactor (NASDAQ:FORM)
  • Teekay Tankers (NYSE:TNK)
  • Logitech International SA (NASDAQ:LOGI)
  • Meridian Bioscience (NASDAQ:VIVO)
  • Zynex (NASDAQ:ZYXI) 
  • Axcelis Technologies (NASDAQ:ACLS)

Covering a broad range of sectors — from technology to bioscience to shipping — there’s an ideal growth stock in here for every investor.

Growth Stocks to Buy: Zoom Video Communications (ZM)

Growth Stocks to Buy: Zoom Video Communications (ZM)
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When we look back at 2020, there’s no doubt that Zoom Video will be remembered as one of the pandemic breakout stories. 

The company went from relative obscurity, to powering the video conferences that kept companies going while staff worked from home. Zoom’s video technology also kept students learning, and friends and family chatting. Sure there was a bit of a misstep in terms of privacy — the company had to hit the ground running when it came to enterprise adoption — but that’s behind it now.

ZMI stock is up 248% so far in 2020. That’s growth! 

Zoom had a blockbuster first quarter, with revenue up 169% year over year. The number of customers with over 10 employees grew to 265,400 — up 354% YOY. The company revised its full-year guidance, and is now expecting revenue of $1.78 billion to $1.8 billion. Those numbers are nearly double what it was predicting in March. 

With more companies, including Facebook (NASDAQ:FB) offering the option to work from home permanently, Zoom has a bright future. And ZM stock is going to continue growing in value.

FormFactor (FORM)

Growth stocks to buy FormFactor (FORM)
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California-based FormFactor is a semiconductor company that specializes in testing and measurement solutions. Its customers include tech giants like Intel (NASDAQ:INTC).

FORM stock slid 39% during the March market selloff. That’s nothing compared to the 89% drop in value FormFactor experienced in the aftermath of the 2008 stock market crash. And despite the March setback, FORM has more than recovered. At this point, the stock has posted a nearly 15% gain for 2020. 

That’s a growth trajectory this stock has been on for the past five years. After closing at $6 in August 2015, FORM stock has increased in value by 407%. Last year it made Fortune’s list of 100 Fastest-Growing Companies.

 

In Q1, FormFactor reported revenue growth of 21.6% YOY, despite operational challenges caused by the pandemic. And should the novel coronavirus disruptions continue, the company has reassurance for investors: “Liquidity, balance sheet and cost structure provide resilience to weather an economic downturn.”

Teekay Tankers (TNK)

Growth stocks to buy Teekay Tankers (TNK)
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Among sectors that have become Kryptonite to investors this year, cruise lines and oil are pretty high up there. After boats sat docked without passengers for months — and made prominent headlines as early epicenters of the pandemic — who knows if that industry will ever recover? Suffering through both a price war and the pandemic this year, the oil industry is a mess that features prominently on my list of “7 Low-Rated Stocks to Sell Before They Drag You Down”.

On the surface, the inclusion of Teekay Tankers on this list of growth stocks may seem puzzling. After all, this is a company built around big ships. And while they’re not carrying passengers, their primary use is transporting oil. That doesn’t seem any better. Maybe even worse. Especially with the images in the news of fully loaded oil tankers floating off ports, unable to unload.

However, Teekay’s tanker fleet isn’t just used to transport oil — it’s also used to store oil when supply exceeds demand. Either way, Teekay gets paid. And in the company’s first-quarter results, you would be hard-pressed to see any ill effects from the pandemic or the oil price war: “In the first quarter of 2020, Teekay Tankers achieved its highest quarterly adjusted profit in more than 10 years, with adjusted net income of approximately $110 million, or $3.27 per share, and I am pleased to report that our fleet has continued to secure strong spot rates in the second quarter of 2020 to-date.”

In addition, the company is aggressively eliminating debt. It sold off several under-utilized ships to help pay $200 million of its debt during the quarter, knocking that down to $730 million. 

After several flat years, TNK stock began to rise dramatically toward the end of 2019. It has had a tumultuous 2020, but the company is well positioned to push those shares back to long-term growth territory.

Logitech International (LOGI)

growth stocks to buy Logitech International (LOGI)
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Logitech is a company that often flies under the radar. That has changed in 2020 with the shift to working from home.

LOGI stock has seen big gains this year (up 30% so far), on the strength of its core computer accessories business. When people are working from home, they need web cams, mice and keyboards — and Logitech is dominant in the computer accessory business. At the height of the pandemic, Logitech webcams were in such high demand that they sold out globally, with resellers charging more than five times the retail price.

The company is also a force in the thriving PC gaming business, selling gaming-optimized keyboards, mice and headphones.

The secret sauce to Logitech’s ongoing success has been its strategy of acquiring premium consumer electronics brands to expand its business. In 2008, it snapped up Ultimate Ears, a leading manufacturer of portable Bluetooth speakers. In 2016, it snapped up Jaybird for $50 million. This gave Logitech an entry into the premium and fitness wireless earbud market. In 2017, it acquired premium gaming headset brand Astro Gaming, giving it further access to the game console accessory market.

Over the past five years, shares in Logitech have climbed 312% in value. With the strength of its core PC accessory business and a history of making canny acquisitions to expand into other consumer electronics markets, look for the LOGI stock growth streak to continue.

Meridian Bioscience (VIVO) 

growth stocks Meridian Bioscience (VIVO) 
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Five years ago, Meridian Bioscience was moving from a ‘C’ to a ‘B’ in my Portfolio Grader. These days, the company’s shares are firmly in ‘A’-rating territory.

VIVO stock has seen big gains in 2020, nearly doubling in value at this point. The company’s primary focus is on diagnostic products. And in a world where trying to determine whether someone has been exposed to Covid-19 is critical, diagnostic kits are a valuable, in-demand commodity. In May, Meridian Bioscience announced the Food and Drug Administration approved its Covid-19 antibody test kits, with a projection of producing “tens of millions of COVID-19 antibody tests per month.”

Earlier that month, the company’s second-quarter earnings results showed revenue up 14% YOY. Adjusted EPS of 23 cents obliterated analyst estimates of 8 cents.

Meridian Bioscience already had a solid business. Covid-19 is super-charging it. The coronavirus isn’t going anywhere any time soon. Even if a vaccine is developed, there will be years of testing people for exposure to bring the pandemic fully under control. With its diagnostic tests for Covid-19 antibodies a key part of that effort, look for VIVO stock to continue its 2020 growth into the future.

Zynex (ZYXI)

growth stocks to buy Zynex (ZYXI)
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Zynex stock is a case study in accelerated growth. The biomedical company specializes in electrotherapy devices that are used in pain management, rehab, stroke recovery, cardio monitoring and other applications. 

For the better part of 14 years, ZXYI was a penny stock. In 2017, it began to make gains, closing the year above the $3 level. That growth rapidly accelerated last year when it topped $8, for a gain of over 200%. Right now ZYXI is at $24.58, for a gain of 210% so far in 2020.

What happened to catapult Zynex into the league of growth stocks, and will those big gains continue?

It appears to be a case of a company that has slowly but surely built up a big customer base in a market that continues to grow (with no small thanks to an aging population). Since mid-2017, Zynex has put together 12 straight quarters of revenue growth. After years of losses, in 2017 investors starting seeing positive EPS numbers.

For Q1 2020, Zynex reported revenue of $15.2 million — its highest ever — and EPS of 9 cents. In addition, the company is being aggressive about continuing that growth:

“In the first quarter, we continued to focus on the execution of our growth strategy and the related growth of our sales force by adding 32 sales reps in March and 48 in April. We expect the addition of new sales reps to have an impact on order and revenue growth later this year and going forward. In addition, we continue to invest in our infrastructure to support the increase in order volume.”

Axcelis Technologies (ACLS)

 Axcelis Technologies (ACLS)
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To understand the potential of ACLS stock as one of the best growth stocks to buy now, it’s important to know where PC processor manufacturers are going. Advanced Micro Devices (NASDAQ:AMD) has made the move to 7nm architecture. Intel is expecting to transition from 10nm chips to 7nm in 2021. That move to sub-10nm chips has big manufacturing challenges. It’s more important than ever to ensure the silicone is free of defects and impurities. That’s where Axcelis comes in.

Axcelis delivers solutions to semiconductor companies that assist in fabrication. Its new Purion platform is designed to improve the yield on those sub-10nm chips using ion technology. Customers are not just PC makers, but also companies that produce other semiconductor products including DRAM and image sensors. Adoption of Purion is on the rise, and the company is using its popularity to target annual revenue of $550 million to $650 million. In comparison, full-year revenue for 2019 was $343 million.

In May, the company released its Q1 2020 earnings results. Revenue of $119 million was up 30% YOY, and improved over the $107.7 million reported in Q4 2019. The company’s CEO noted:

“While there is limited visibility to near-term macroeconomic conditions, customer demand for our Purion platform remains strong. Axcelis has a highly differentiated product line, a broad and diverse customer base, a robust balance sheet and a dedicated team of employees. These strengths will propel us through this difficult period and lead us to market leadership in ion implantation.”

ACLS stock is in growth mode, gaining 15% so far in 2020, and 95% over the past 12 months. With semiconductor companies pushing to release ever-smaller chips, look for ACLS stock to continue in its position among growth stocks.

Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system — with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the “Master Key” to profiting from the biggest tech revolution of this (or any) generation. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.


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