By investing in blue-chip stocks or the index, investors can get returns that comfortably beat inflation over the long term. However, creating massive wealth from the markets requires some risk-taking ability and a lot of patience. Talking about higher risk implies investing in growth stocks.
Further, it takes courage and patience to hold a quality stock through market cycles for multibagger returns. Of course, it’s important to analyze business developments on an annual basis. That practice is to ensure management is delivering on its promise and fundamentals are sound.
The correction in growth stocks in 2022 was deep and has been followed by some recovery this year. However, several growth stocks trade at attractive valuations. They represent attractive business models that will deliver value.
This article discusses three attractive growth stocks to buy for 10-bagger returns by 2030.
Li Auto (LI)
Li Auto (NASDAQ:LI) is possibly the best-emerging name from the electric vehicle (EV) industry in China. Given the global impending growth in EV adoption, I am bullish on LI stock delivering 10-bagger returns by 2030.
From a fundamental perspective, Li Auto reported cash and equivalents of $10.17 billion as of Q2 2023. For the same quarter, the company reported free cash flow (FCF) of $1.33 billion. The key point is that Li has high financial flexibility for aggressive investment in retail expansion, product development and construction of supercharging stations.
I must add that Li Auto has been aggressive when it comes to the launch of new models. Li L9, Li L8 and Li L7 have been supporting stellar delivery growth. Li MEGA is due for launch in December. The company believes that MEGA will be the “highest-selling vehicle in China priced at more than 500,000 yuan.”
It’s worth noting that Li has pursued aggressive retail expansion in China. In my view, international expansion is impending in the next 24 months. That’s another potential catalyst for delivery growth and cash flow upside.
Amdocs (DOX)
It’s been a good year for technology stocks, and I believe there will continue to be massive value creators from the sector. Amdocs (NASDAQ:DOX) is among the growth stocks to buy that can deliver 10-bagger returns by 2030. At a forward price-earnings ratio of 14.2, DOX stock looks attractive and offers a dividend yield of 2%.
As an overview, Amdocs is a provider of software services and solutions for the communication and media industry. One reason to be bullish on Amdocs is its total estimated serviceable addressable market of $57 billion by 2025. That provides scope for robust growth in the coming years.
The second reason to be bullish on Amdocs is the cash flow potential. For the year, the company guided for free cash flow of $700 million. In the next 24 months, FCF could be more than $1 billion. As cash flow swells, dividend growth will be robust. At the same time, Amdocs will have high financial flexibility for potential acquisitions. The company already seems to be active on that front by acquiring TEOCO’s service assurance business in July.
Tilray Brands (TLRY)
Tilray Brands (NASDAQ:TLRY) stock performance has been disappointing since the euphoric rally of 2021. The reason is regulatory headwinds. However, I believe the stock is oversold and can deliver multibagger returns.
Assuming a scenario where cannabis is legalized at the federal level, TLRY stock could be a 10-bagger within 24 months. However, even if this scenario is delayed, the company still holds value. It’s estimated that without federal-level legalization, the cannabis market in the U.S. will be worth $71 billion by 2030. Therefore, there is ample headroom for growth.
It’s also worth noting that Tilray has diversified for growth. The company is among the largest players in the U.S. in the craft beer industry. In October, Tilray acquired eight beer and beverage brands from Anheuser-Busch (NYSE:BUD). Besides diversification, the company now has a strong strategic infrastructure in the U.S. for aggressive growth when cannabis is legalized.
On the date of publication, Faisal Humayun did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
