A bear market is the worst time to buy growth stocks. Volatility spooks investors, and current fears around inflation and higher interest rates also hurt the story. However, investors who consider growth stocks to buy and hold can take advantage of this volatility to profit.
Essentially, investors should purchase stocks after they have fallen. As long as the company grows in the next 10 years, investors have a good chance of generating profitable returns. To discover growth stocks, readers may run growth scores on Stock Rover.
In the table below, the companies belong to a variety of sectors. A portfolio that has industry diversification will have a lower long-term risk. For example, Freeport-McMoRan’s (NYSE:FCX) profits will increase when copper demand rebounds. Its prospects are completely independent from those of Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL).
Growth Stocks to Buy and Hold: AbbVie (ABBV)
AbbVie (NYSE:ABBV) is a drug manufacturer with a healthy portfolio of products.
In the second quarter, the company posted earnings per share growth of 21.4% to 51 cents. Net revenue increased by 4.5% YOY to $14.58 billion. Although the stock peaked in the $175 range, shares traded lower after the quarterly report.
AbbVie is a stock to hold forever because Skyrizi, one of its growth products, continues to gain market share. The drug treats psoriasis and psoriatic arthritis. Regulators also recently approved Skyrizi for Crohn’s disease, increasing its contribution to AbbVie’s growth.
Alphabet (GOOGL)
Alphabet (NASDAQ:GOOGL) posted earnings per share of $1.21 on revenue that grew by 12.6% YOY to $69.69 billion. Shareholders should appreciate the company’s investments in artificial intelligence, search and cloud.
AI is the real key to transformation for Google. The firm is in the early phases of implementing artificial intelligence to help it create new ways to search. For example, people use Google Lens more than 8 billion times a month. Google has also introduced a new feature called multi-search. People may search using both words and images concurrently.
Other key catalysts to watch that make GOOGL one of the best growth stocks to buy and hold include expanded Google Translate and new advertising features for local companies.
Growth Stocks to Buy and Hold: Freeport-McMoRan (FCX)
Freeport-McMoRan (NYSE:FCX) posted revenue falling that fell by 5.7% to $5.42 billion. It earned 58 cents in EPS. When revenue declines, investors may think FCX stock does not offer growth. However, the company continues to lower its debt. Although it has $11.1 billion in total debt, it also has $9.5 billion in cash, giving it only $1.6 billion in net debt.
Freeport will increase shareholder value by buying back shares. In the last quarter, it funded around $600 million in share repurchases.
One thing investors should watch out for is any fluctuation in copper prices. Its cash flow depends on copper prices. For example, every 25-cent-per-pound change in copper translates to around $1 billion in annualized EBITDA.
Costs are unusually high right now. Commodity input costs like sulfuric acid and explosives are higher. In the long term, those input price rises will moderate. Although copper prices won’t vary by 25 cents in the future, the direction should still be positive. The global economy will grow in the next few years. Copper demand will rise. This will increase the company’s profits.
Qualcomm (QCOM)
Qualcomm (NASDAQ:QCOM) disappointed investors when it posted weaker fourth-quarter guidance. Still, it earned $2.96 per share (non-GAAP) in its third quarter. Revenue grew by 37.3% YOY to $10.9 billion.
In Q4, Qualcomm will post revenue of $11 billion to $11.8 billion. It expects non-GAAP earnings in the range of $3 to $3.30. The chip company’s prospects depend on handset sales. In the last quarter, China’s Covid-19 lockdowns hurt output and demand.
But Qualcomm is focusing on premium products. This will increase its resilience to the short-term weakness ahead. For example, the company updated its 5G forecast to be in the $650 million to $700 million range.
December is Qualcomm’s strongest seasonal quarter. Customers will launch flagship devices. Furthermore, the holiday season will give the smartphone sector a lift. Investors may get QCOM stock at a discount today for near-term gains. Buy-and-hold investors may hold now and never sell.
Growth Stocks to Buy and Hold: Raytheon Technologies (RTX)
Raytheon Technologies (NYSE:RTX) reaffirmed its outlook for the year when it posted second-quarter results. The defense contractor posted revenue growing by 2.7% YOY to $16.31 billion. It earned $1.16 a share (non-GAAP). For 2022, it expects sales of up to $68.75 billion.
In terms of growth, Raytheon is executing on over 5,000 programs. However, the company is struggling to fill vacant positions. Ongoing labor availability and supply chain disruptions are limiting its growth and have resulted in a lost productivity rate of 50%.
For investors, RTX remains one of the best growth stocks to buy and hold, though. As soon as the company can review its processes and start to increase hiring, its business will expand.
Teck Resources (TECK)
Teck Resources (NYSE:TECK) mines copper, zinc and steelmaking coal. In the second quarter, the firm posted revenue growing by 126.2% YOY to 5.79 billion CAD.
Teck benefits from many players in the industry unwilling to invest in new capacity. This will result in long-term supply constraints. Demand for steelmaking coal will keep growing. This means that customers will need Teck’s product. In the next few years, customers will want new green steel technologies. That would reaccelerate Teck’s future growth.
Teck’s strategy does not rely on hope. It depends greatly on copper growth. Management is also mindful of investor returns. It balances its capital allocation by returning plenty of cash to its shareholders. By keeping a strong balance sheet, Teck is shielded from any major downturn that would increase the cost of borrowing.
Growth Stocks to Buy and Hold: Tesla (TSLA)
Tesla (NASDAQ:TSLA) managed to survive through the devastating Shanghai lockdown in the second quarter. In fact, it posted one of the strongest quarters in its history. In June, CEO Elon Musk noted that Tesla achieved production records in both Fremont and Shanghai.
Tesla’s global expansion will ensure its growth will continue. Its Giga factory in Berlin achieved a milestone of 1,000 cars produced a week in June 2022. Giga Texas will exceed its 1,000 weekly vehicle production in the next few months.
Tesla has a huge competitive advantage over other firms. It developed its manufacturing and technology unique to the industry. For example, its manufacturing efficiency resulted in the need for fewer robots in the factory. Its body shop is around three-fold smaller than that used by competitors.
Musk said that the Tesla team will have a Cybertruck in production by the middle of next year. This increases Tesla’s addressable market, lifting its revenue potential.
On the date of publication, Chris Lau did not have (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.
