This is a great time for investors to buy the best growth stocks. In addition to America’s very strong macro trends, many companies have been reporting excellent results in the last several weeks. For example, electric-vehicle makers Tesla (NASDAQ:TSLA) and Rivian (NASDAQ:RIVN) reported June delivery data that came in above analysts’ average estimates. Even memory maker Micron (NASDAQ:MU), homebuilder Lennar (NYSE:LEN), alcohol beverage maker Constellation Brands (NYSE:STZ), and auto retailer CarMax (NYSE:KMX) all reported stronger-than-expected quarterly results. At a time when it definitely makes sense to buy growth stocks, here are the seven best growth stocks to buy in July.
Bionano (BNGO)
Impressive news has rolled in recently for Bionano (NASDAQ:BNGO), whose system enables optical genome mapping (OGM). In an article tweeted by my fellow BNGO enthusiast, Greg Larssen, it was reported that Israel’s well-respected Rambam Hospital “is creating a new database that will include OGM test results.” The article added that “the data will be used to research genetic changes and their implications, with the goal of improving the medical care cancer patients receive worldwide.”
The fact that a prestigious hospital believes that OGM can improve the “medical care cancer patients receive” shows how valuable OGM is, and of course, that’s great news for BNGO. Even more promising for BNGO and for humanity is the next sentence: ” Dr. Karin Weiss, director of the Genetics Institute at Rambam, maintains that OGM technology will eventually be used to diagnose other diseases, tumor types, and cases of unresolved hereditary diseases in children.” If tens of millions of children are tested with Bionano’s OGM systems, many tens of thousands of lives will be saved, and BNGO stock will surge many dozens of times.
Rivian (RIVN)
On July 3, start-up EV maker Rivian (NASDAQ:RIVN) reported that it had delivered 12,640 EVs last quarter, well above analysts’ average estimate of 11,300. The Street cheered the news enthusiastically, as RIVN stock soared 17.4% to $19.56 on July 3, reaching its highest level since February.
And in more good news for Rivian and the owners of RIVN stock, Amazon (NASDAQ:AMZN) has reportedly begun using the automaker’s delivery van in Europe. The latter development is a sign that the e-commerce giant remains pleased with the performance of Rivian’s vans. Further, as I pointed out in a prior, recent column “It seems that RIVN has a big hit on its hands with the R1S,” its new SUV. Despite the name’s recent rally, its market capitalization of $18.37 billion far undervalues the company’s long-term outlook.
General Electric (GE)
Investor’s Business Daily recently published a glowing article about General Electric’s (NYSE:GE) stock, citing the multiple, positive catalysts that its aerospace business has. Specifically, the publication noted that the aerospace unit “boasts robust growth estimates” and could combine with Honeywell’s (NASDAQ:HON) aerospace unit.
GE’s aerospace business is expected to become a standalone company early next year, with GE splitting itself into an aerospace company and a firm that focuses on businesses connected to electrical power. Among the positive catalysts for the aerospace business cited by Investor’s Business Daily are the continued increases in “global air traffic,” which “now stands at roughly 90% of pre-pandemic levels,” China’s reopening, which is also sparking more demand for flights, and increased demand for military planes. The publication noted that last month, GE obtained orders for over 1000 of its commercial jet engines.
Meanwhile, GE’s Power business should grow rapidly amid the greatly increased demand for electricity due to the electrification of transportation. Widespread support for wind energy by governments should also boost the Power business.
e.l.f. Beauty (ELF)
e.l.f Beauty (NYSE:ELF) has become a Wall Street darling, as the company, which markets skincare and cosmetics products, reported stronger than expected profits for three consecutive quarters, leading to huge rallies by the stock. The company’s last quarterly report featured an incredible 78% sales gains versus the same period a year earlier and a YOY gain of greater than 100% in its earnings per share, excluding certain items.
“We gained (2.7 percentage) points of market share in the quarter and increased our ranking to the number three U.S. Mass Cosmetics brand for the first time, according to Nielsen,” CEO Tarang Amin said in a statement. “As we look ahead, we believe we are still in the early innings of unlocking the full potential we see for e.l.f. Beauty.”
ELF has a bullish put/call ratio of 0.69, according to Fintel.io, and Investor’s Business Daily gives the name its maximum Composite Rating of 99.
Axcelis Technologies (ACLS)
Axcelis Technologies (NASDAQ:ACLS) “provides spare parts, equipment upgrades, and maintenance services to the semiconductor industry.” Axcelis’ products are used to power chips. As a result, the company is very well-positioned to benefit from both the proliferation of artificial intelligence, which is developed using computer chips, and the ever-increasing amount of chips being incorporated into autos.
Showing that the company is benefiting from these trends already and that its market share is growing, the firm’s top line soared nearly 25% year-over-year in the first quarter to $254 million, while it finished Q1 “with a record systems backlog of $1.27 billion on quarterly bookings of $298 million.” Moreover, its net income climbed to $47.7 million last quarter, up from $41.6 million during the same period a year earlier.
Investor’s Business Daily gives ACLS a perfect Composite Rating of 99, including a maximum Relative Strength rating of 99 which indicates that the Street has become enamored with the name over the last year.
ServiceNow (NOW)
ServiceNow’s (NYSE:NOW) products automate IT tasks. Goldman Sachs recently noted that NOW is one of eight stocks that meet all of its quantitative criteria used to find names that will perform well over the long term. Additionally, on June 6, research firm Hedgeye named NOW as one of its top long-term picks. The firm expects the company’s fiscal 2024 free cash flow to beat analysts’ average outlook by 25%. “We think a combination of elements will show ServiceNow sustaining north of 22% topline growth & waterfalling incremental profits,” Hedgeye contended.
According to Seeking Alpha columnist Hunter Wolf, NOW “dominates the IT Service Management software industry” and should continue to benefit from the ongoing “megatrend of digitalization” by companies going forward. Moreover, the company is using AI to enhance many of its products, the columnist noted., AI is enabling NOW’s products to better understand humans’ commands and respond to them more quickly.
Workday (WDAY)
Workday (NASDAQ:WDAY) markets ” enterprise cloud applications for finance and human resources.” In May, Investor’s Business Daily reported that mutual funds had recently bought a significant $27.57 million of WDAY stock. The publication gives the stock its maximum Composite Rating of 99 and it has a Relative Strength score of 90, indicating that the Street has been enamored with the name over the last year.
RBC Capital started coverage of WDAY stock with an “outperform” rating on June 28. “Our checks indicate that Workday is increasingly landing with HR and financials simultaneously and that planning is gaining meaningful traction against the competition,” wrote the bank, which predicts that the company’s subscription revenue can grow 20% or more annually.
On the date of publication, Larry Ramer held long positions in BNGO, GE, and RIVN. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
