It continues to be a stock pickers market, and investors seeking growth stocks are having to look far and wide for securities that are outperforming the broader market. Many stocks that delivered huge gains last year are stalled or declining this year as once reliable sectors such as technology and healthcare are being replaced by energy and financials.
Yet despite the shifts that are currently at play, there are still growth stocks to be found, many of which are offering generous returns. In this article we look at seven growth stocks ready to triple.
- Square (NYSE:SQ)
- Snap (NYSE:SNAP)
- Discovery Communications (NASDAQ:DISCA)
- Cryoport (NASDAQ:CYRX)
- General Motors (NYSE:GM)
- Switchback Energy (NYSE:SBE)
- Twitter (NYSE:TWTR)
Growth Stocks Ready to Triple: Square (SQ)
Let’s start with the “other” big fintech stock for this list of growth stocks: Square. While PayPal (NASDAQ:PYPL) tends to get most of the attention, Square is no slouch either when it comes to online and digital payments, as well as the fast growing cryptocurrency market. Square’s app is wildly popular with small business owners and other merchants who favor instantaneous payments, with more than 30 million daily active users.
Momentum appears to be building behind SQ stock, especially with the company’s exposure to Bitcoin (CCC:BTC-USD), the red hot cryptocurrency that is gaining broader acceptance in the financial community and among major corporations. Square was a Bitcoin pioneer, adding the cryptocurrency to its Cash App back in 2018.
SQ stock has risen 32% since the end of January to more than $265 a share, with no signs of the rally slowing any time soon.
The social media company behind Snapchat and Bitmoji has seen its stock rally since announcing its fourth quarter earnings in early February, up 10% on strong results to nearly $65 a share. Investors seem willing to look past the weak forward guidance Snap provided for the current first quarter of 2021 and instead focus on the fact that the company reported 265 million daily active users, up more than 6% from the 249 million users it reported last October.
Snap also reported that its revenue rose 62% to $911 million compared to the fourth quarter of 2019, handily beating the $857.4 million in revenue that Wall Street analysts had forecast.
In addition to its strong earnings, SNAP stock is getting a lift from the fact that the company is adding subscribers overseas, notably in Europe. And Snap’s videos are gaining in popularity and getting more views all the time. Next, the company is expanding into video games.
Discovery Communications (DISCA)
If there’s a dark horse on this list of growth stocks, it is Discovery Communications. The New York-based media company that has been around since 1985 is today known for its many specialty channels, including its namesake Discovery Channel, as well as Animal Planet, TLC and the Food Network.
While streaming services are the new shiny object in broadcasting and tend to get all the attention from analysts, the stock of this legacy media company has been surging this year, up 50% so far in 2021 to $45 a share. Momentum has been driven by the launch of the discovery+ streaming service last December (they had to jump on the streaming bandwagon sometime) and a deal with Vodafone Group (NASDAQ:VOD) that will bring discovery+ to customers in 12 European markets.
However, what separates Discovery Communications from the streaming pack is the fact that it can offer its content in local languages around the world from German to Spanish and Mandarin. Analysts estimate that the “localized content” provides Discovery with a 30% market share in certain regions of the world where it operates. That, combined with an improving advertising market as the Covid-19 pandemic retreats, provides a rosy outlook for Discovery Communications and its shareholders.
It’s worth noting that famed investor Michael Burry, who was portrayed by actor Christian Bale in the movie “The Big Short,” added DISCA stock to his portfolio last year before it was on anybody’s radar. The biggest holding in Burry’s portfolio? GameStop (NYSE:GME), which he bought for $10 a share (again before anyone was paying attention) and made a killing on when the stock topped $450 a share earlier this year.
The roll out of Covid-19 vaccines is gathering steam around the world and that’s great news for shareholders of Cryoport. The Brentwood, Tennessee-based company is the world leader when it comes to the transportation and distribution of pharmaceuticals that need to be kept at cold temperatures.
Cryoport is a cold chain logistics company at a time when the most important vaccines in the world need to be kept at temperatures between -13 and -76 degrees Fahrenheit. No surprise then that Cryoport has signed deals all over the world for the handling and transportation of the various Covid-19 vaccines, and its stock has gotten a big boost since the first vaccines received regulatory approval last fall, up 78% since the end of October to $71.26 a share.
Cryoport has been endeavoring to capitalize on its success with Covid-19 vaccines by issuing $200 million worth of additional stock. Big institutional investors are also betting on continued growth of CYRX stock. Blackstone (NYSE:BX) purchased $275 million of Cryoport stock at the end of last summer ahead of the Covid-19 vaccine approvals.
Analysts too remain bullish on the company’s prospects and the future trajectory of its stock. The median price target on the stock is $73.50 a share, with a high estimate of $81. This company is definitely in a profitable position.
General Motors (GM)
After years of stagnating, GM stock finally looks ready to break out in a big way. Already in 2021, the stock of General Motors is up 33% to $53.30 a share. More growth is expected as the leading Detroit automaker aggressively shifts its business to battery-powered electric vehicles and away from gasoline and diesel powered cars, trucks and SUVs.
General Motors stock has weakened recently after the company warned that a worldwide shortage of semiconductor chips could cost if $2 billion this year. But the chip shortage will be temporary and it is impacting all vehicle manufacturers, not just General Motors.
The company recently reported stellar fourth-quarter earnings that easily beat results from a year earlier. GM’s net income was $2.85 billion for the fourth quarter compared with a loss of $194 million in the fourth quarter of 2019. In its earnings results, GM said that it anticipates spending $9 billion to $10 billion in 2021 as it accelerates its all-electric and autonomous vehicle development globally.
As automakers large and small race to manufacture fully electric vehicles, GM is ahead of the pack. Its stock is responding and can be expected to move higher throughout this year as it continues reporting strong earnings. The median price target on GM stock is $63.50 a share, with a high target of $80.
Switchback Energy (SBE)
Special Purpose Acquisition Companies (SPACs) are hot on Wall Street right now. Last year (2020) was a record year for SPAC deals. But this year is proving to be even better in terms of these deals that bring companies public.
Less than two months into 2021 there have already been 133 SPACs deals worth $40 billion, more than in the first nine months of 2020. Amid the frenzy, it is important for investors to sort the wheat from the chaff and identify quality companies that have long-term growth potential. One such winner is Switchback Energy, a SPAC that was launched with the goal of bringing electric vehicle charging company ChargePoint to market.
On Feb. 11, Switchback Energy held a meeting to gain shareholder approval to takeover ChargePoint so that it can begin trading on the New York Stock Exchange under the ticker symbol “CHPT.” Once ChargePoint goes public, investors can reasonably assume that the stock will run higher. This is because ChargePoint is critically important to the electric vehicle market that companies such as GM are racing to make a reality.
Founded in 2007, ChargePoint sells both the hardware and software needed for electric vehicle charging stations, not just for consumers but also for companies that operate commercial vehicle fleets. Currently, ChargePoint operates nearly 120,000 electric vehicle ports around the world, and forecasts that it will have 2.5 million charging ports by 2025. Get in on the ground floor!
Last on this list of growth stocks is Twitter. The social media giant just reported another $1 billion quarter. CNBC market commentator Jim Cramer predicts that TWTR stock will rise from its current price of $67.70 a share to $100.
In its earnings report, Twitter said revenue rose 28% to $1.29 billion compared with the $1.19 billion analysts had expected. Twitter credited a rebound in online advertising for the strong results, noting that its net income rose to $222 million, or 27 cents per share. Daily active user growth also continues to be a source of strength for Twitter as the company reported 192 million daily active users, up 26% from a year earlier and just shy of analyst estimates of 193.4 million users.
For all of 2020, the company added 40 million new daily users as major events such as the pandemic and U.S. presidential election attracted people to the platform. In the fourth quarter, Twitter added one million new users in the U.S., bringing its total to 37 million average daily users in its most profitable market.
Fears that banning former President Donald Trump from the platform would hurt its popularity seem to have subsided. Twitter Chief Executive Jack Dorsey recently said that the social media platform is “…much larger than any one topic or any one account,” referring to Trump. Twitter continues to explore the idea of switching to a subscription model, a move that could further drive revenues and profits.
On the date of publication, Joel Baglole held a long position in SBE.