When allocating your hard-earned investment dollars, growth stocks are the way to go. There are plenty of “cheap” stocks out there, especially in 2020. In fact, I recently put together a list of the “7 Best Cheap Stocks to Buy for December” if you want to go that route.
However, I firmly believe that growth stocks are your best bet. Here’s a collection of companies that are putting on a growth clinic in 2020. If you’ve been considering any of these for your portfolio, the time to act is now.
Their gains this year have been impressive. However, they are not flukes. Every one of these growth stocks earns an “A” rating in Portfolio Grader. And each is in a position to continue rewarding shareholders with ongoing growth.
- Advanced Micro Devices (NASDAQ:AMD)
- Amazon (NASDAQ:AMZN)
- Clorox (NYSE:CLX)
- Etsy (NASDAQ:ETSY)
- Logitech International (NASDAQ:LOGI)
- PayPal (NASDAQ:PYPL)
- Zoom Video Communications (NASDAQ:ZM)
Growth Stocks: Advanced Micro Devices (AMD)
Advanced Micro Devices has been on a multi-year winning streak. AMD stock was the best performer on the S&P 500 last year, with about 150% growth. In 2020, it’s posted gains so far of 111%. That’s all the more impressive considering AMD has recovered from both the March stock market crash and the September tech stock sell-off.
With its computer processors and graphics cards, AMD has been steadily winning a larger share of the consumer PC market. The company is also making big gains in the lucrative server market — earlier this year it passed a 10% market share. You’ll also find custom AMD chips powering the hot new PlayStation 5 and Xbox Series X/S game consoles.
Over the past five years, the AMD stock story has been one of growth. Expect that to continue as the company aggressively takes on its longtime rivals.
Amazon has had a stellar year, making it a no-brainer for this list of growth stocks. The pandemic has boosted online shopping to record levels, and where have consumers naturally turned? Amazon. Not just existing customers, but also many who had yet to embrace online shopping.
The company has been on a year-long hiring spree, bringing on 427,000 new employees in just 10 months. AMZN stock has also been on fire in 2020, up 76% so far this year.
The thing about AMZN stock is that it plateaus for months at a time before the next big growth spurt kicks off. It did that through much of 2019, and since July it’s been in another stagnant period. That’s okay; the growth always kicks in eventually — to the tune of 390% over the past five years. The current pause is a buying opportunity before the holiday-quarter earnings inevitably trigger the next round of gains.
In the initial stages of the pandemic, few products were in higher demand than disinfectant wipes. Sure, there was toilet-paper hoarding and flour was often out of stock, but those situations quickly improved. But Clorox wipes? In May, the company reported demand had spiked by 500%. Despite a 40% increase in production, they are still difficult to find.
When the pandemic is finally under control, demand for Clorox wipes and other cleaning supplies produced by this California-based company aren’t going to return to pre-pandemic levels. There’s a heightened awareness among consumers and businesses that thorough cleaning is important. Expect name-brand, proven cleaning products like those produced by Clorox to be front and center.
CLX stock has posted 32% growth so far in 2020. Citigroup analyst Wendy Nicholson just raised her price target on CLX stock to $249 (shares are currently trading in the $203 range). I agree with her that even as pandemic tailwinds subside, Clorox is going to continue seeing opportunities.
In many ways, Etsy is the anti-Amazon. Hand-crafted and vintage goods, instead of cut-rate prices and next-day delivery on mass-produced goods. No attempts to rope customers into an ecosystem with paid memberships and freebie offerings like streaming video. No aspirations toward building out a Cloud computing empire. Etsy is an e-commerce platform, but really that’s about as close as it gets to Amazon.
However, like Amazon, Etsy is in growth mode. And like Amazon, Etsy saw sales spike with the pandemic. Etsy vendors were quick to pivot to in-demand items like protective face masks. Personalized instead of mass-produced, people just kept buying them. In the September quarter alone, Etsy vendors sold 24 million face masks. But it’s not just masks. For the quarter, total sales on Etsy more than doubled year-over-year, hitting $2.63 billion.
At this point, ETSY stock is up 329% in 2020. Just wait until the holiday sales numbers hit. Etsy is taking the place of holiday craft shows that have been canceled by the pandemic. Again, the anti-Amazon, but still with the convenience of online shopping. With more artisans and vendors on the platform, and more people than ever creating accounts, I’m looking for ETSY stock to maintain strong momentum.
Logitech doesn’t get the same attention that other tech companies do because it primarily makes accessories. There are no groundbreaking new product categories created by Logitech or its many brands (which include Ultimate Ears, Jaybird, Blue Microphones, ASTRO Gaming and others), but Logitech accessories make those groundbreaking products better.
Looking on my desk right now, I’m using a Logitech MX3 wireless mouse, a Blue Yeti X microphone and a pair of Jaybird wireless earbuds. There’s an Ultimate Ears HYPERBOOM portable speaker on my shelf.
Logitech was in the headlines earlier this year, because the pandemic work-from-home boom was resulting in a shortage of Logitech webcams.
LOGI stock is up 98% in 2020 as the demand for remote work, remote learning and gaming accessories spikes. That’s a very good showing, but LOGI shareholders also saw their investment grow in value by 224% over the previous four years.
PayPal was already in growth mode prior to the pandemic. The company is the market leader for online payments, and its Venmo mobile cash app is a top player in the peer-to-peer payment space. Over the previous two years, PYPL stock posted growth of 175%.
That’s been good news for PayPal investors. However, while business as usual was good for PYPL stock, the pandemic has been incredible. Everything about 2020 has played to PayPal’s strengths. Online shopping exploded in popularity, and no one wanted to handle cash. PayPal has been signing up new users at a record pace — 21.3 million in Q2 and 15.2 million in Q3 — with record numbers of transactions over its network.
That’s helped PYPL stock to double in value in 2020. Those new users joining the platform will remain after the pandemic is over. It’s likely that many of their habits including online shopping and avoiding cash will continue as well. That bodes well for PayPal’s ongoing growth.
Finally, the poster child for pandemic work-from-home stocks, which also happens to be a 2020 growth superstar: Zoom.
There is no shortage of remote video collaboration tools, including several proven options from existing enterprise tech giants. But when the pandemic kickstarted the scramble for working from home and remote learning, Zoom was the preferred choice. Why? In most cases it came down to the fact that Zoom was easier. With IT staff unable to hand-hold remote users, Zoom was simple to set up and use.
The user stats tell the story. In December 2019, Zoom reported 10 million daily meeting participants. In March 2020, that rose to 200 million. In April, it was 300 million. Zoom had security challenges early on, but the company acted quickly to address these.
ZM stock has posted growth of 491% so far in 2020. With more enterprise customers signing up for paid tiers and video conferencing as an option here to stay for many workers, Zoom is in a strong position for ongoing growth.
On the date of publication, Louis Navellier had a long position in AMD, AMZN, CLX, ETSY, LOGI, PYPL and ZM. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article. InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
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.