3 Growth Stocks to Buy Right Now

It’s time to look past Covid-19 for next year’s emerging growth stocks beginning to make their moves today

growth stocks - 3 Growth Stocks to Buy Right Now

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Renewed stimulus talks have Wall Street’s approval today. But when it’s time for companies to get fully back to work and show what they’re made of next year, three S&P 500 companies stand out above their peers as growth stocks ready for business both off and on the price chart.

Friday is shaping up to cap off a decent week for stocks. Intraday Friday the broad-based, large-cap S&P 500 is up about 0.8% for gains of nearly 3.8% for the five-day period. It hasn’t been without its hazards, though, for investors trying to further capitalize in the aftermath of September’s broad-based correction.

Following an abbreviated Covid-19 stay at Walter Reed , President Donald Trump went immediately to work, tweeting the country’s stimulus negotiations were off the table until after the election. And the blustery threat was taken seriously by many investors. The S&P 500 sank nearly 1.5% in an abrupt bearish U-turn.

At the same time, heavier collateral damage across industry groups was par for the course in stocks like Apple (NASDAQ:AAPL), Target (NYSE:TGT), Disney (NYSE:DIS) and Delta (NYSE:DAL), among others.

Of course, the president reopened the possibility of negotiations later. That’s not exactly a secret. And today stimulus talks appear to be even closer to an actual deal. Still, the past week has been tough for investors.

  • Freeport McMoRan (NYSE:FCX)
  • Align Technology (NASDAQ:ALGN)
  • Ralph Lauren (NYSE:RL)

Hopefully in 2021 we can truly make America great — and more normal — again. In such an environment, Wall Street’s analyst community sees select companies within the S&P 500 poised for outsized growth, and not simply looking attractive compared to a dismal 2020.

Growth Stocks to Buy: Freeport McMoRan (FCX)

Freeport McMoRan (FCX) successful downtrend breakout on monthly chart
Source: Charts by TradingView

The first of our growth stocks to buy is Freeport McMoRan. FCX has been a terrible investment for more than a decade, since the financial crisis of 2008–2009. But analysts are upbeat on Freeport’s prospects beyond Covid-19. The diversified mining giant is expected to grow sales by 30% and see earnings balloon from 34 cents to $1.46 next year.

Technically, this growth stock turned a key corner last month, as shares broke above long-term downtrend line. Shares also managed to hold above prior resistance, despite the broader market correction in September. Along with a massive triple bottoming pattern in place, the prospects of an emerging bullish cycle for Freeport McMoRan shareholders looks good.

With earnings risk later this month and an admittedly shaky stochastics setup, I’d take advantage of FCX’s options market and gain long delta exposure with the May $20/$25 call spread for $1 or better.

Align Technology (ALGN)

Align Technology (ALGN) mid-pivot breakout within W corrective base
Source: Charts by TradingView

The next of our growth stocks to buy are shares of Align Technology. The outfit behind the wildly popular Invisalign cosmetic dental system hasn’t been a priority in 2020. Given the coronavirus’ impact on the economy and prolonged office closures, that’s hardly a surprise. But next year stands to be a boon for business.

Wall Street expects a bonanza of a year in 2021, with ALGN’s profits expected to roughly triple and climbing sales of almost 40%. Align Technology’s monthly chart should also put a smile on the faces of growth investors.

Technically, shares have been busy putting together an irregular ‘W’ corrective base for just over two years. And with this growth stock rallying above resistance through the pattern’s mid-pivot, conditions are promisingly bullish. But like with FCX, nearby earnings and stochastics risks also lend support to using an out-of-the-money call vertical. Here, the April $370/$400 call combination for up to $10 looks well-aligned with the price chart while allowing  2021 to gain bullish traction.

Ralph Lauren (RL)

Ralph Lauren (RL) monthly double bottom confirmed
Source: Charts by TradingView

The last of today’s growth stocks to buy is Ralph Lauren. The storied fashion empire has had a rough time in 2020. But of all the companies in the S&P 500, RL is expected to rebound the most strongly in terms of earnings growth with profits forecast to soar by nearly 1,100%.

Collectively, investors have been slow to sympathize with the consensus outlook. Shares are just barely more than 20% off their Covid-19 March low. That pales next to the S&P 500’s rally of around 60%. Still, a confirmed deep double-bottom formation which successfully tested its financial crisis’ 76% retracement level is the sort of pattern which appreciably can set the stage for a bullish cycle in a company’s share price.

In this growth stock and review of Ralph’s options board, I prefer playing it close to the vest and suggest investors suit up with the Jan $80/$85 bull call spread for up to $1.65.

On the date of publication, Chris Tyler does not hold, directly or indirectly, positions in any securities mentioned in this article.

Chris Tyler is a former floor-based, derivatives market maker on the American and Pacific exchanges. The information offered is based on his professional experience but strictly intended for educational purposes only. Any use of this information is 100%  the responsibility of the individual. For additional market insights and related musings, follow Chris on Twitter @Options_CAT and StockTwits.


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