What Is A Growth Stock? 2021 Best Growth Stocks to Buy Now!

What is a growth stock?

A growth stock is a company’s shares expected to grow at a faster rate compared to the average market growth. Growth stocks do not pay dividends since companies use them to reinvest into the company’s growth. Particularly for the short term. Investors anticipate reaping profits through capital gains once they sell their shares in the future.

While they may appear expensive, the growth of the company will eventually overshadow initial investment as the share price rises. Investing in growth stocks is risky since they do not pay dividends. You have to sell your shares to realize your return on investment. Unfortunately, if the company does not growth as expected, you can suffer huge losses.

Growth stocks are synonymous with disruptive companies. For example, a company with a new technology that keeps it abreast of its competitors may reinvest profits to improve on the technology. While it is synonymous with startups, established companies also invest in growth stocks.

Why growth stocks?

Here are top reasons you should invest in growth stocks.

·       High returns

Unlike most stocks that pay dividends, returns from growth stocks are in form of capital gains. This is an accumulation of wealth over a certain period. Growth stock companies have a higher growth rate compared to the niche industry. This ensures rapid and large revenue collection compared to a company’s peers. You realize your profits once you sell your shares, which are subject to long-term capital gains tax (LTCG).

·       Inflation-proof

Since growth stocks grow at a faster rate compared to the market, they can withstand inflation in the economy. This enables investors to get higher returns compared to what they get from other investment options.

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 8 2021 best growth stocks to buy now

Netflix (NASDAQ: NFLX)

Netflix is one of the leading streaming platforms. Based in California, it produces its original movies and series as well as showcasing talent from other production houses. As of writing, the Netflix stock price rose from $600 to $685 after Guggenheim, an investment advisory, cited Netflix as a “buy” stock early October.

The company has also seen a surge in global subscribers. This is thanks to its new approach of producing content in native language. There are more than 200 million global subscribers with North America accounting for 35%. Netflix’s leading shareholder is Insider Monkey, which has 4.6 million shares amounting to a worth of $2.4 billion.

The company has also had an illustrious 2021, bagging awards from famous events. The company scooped 44 Emmy Awards in this year’s Television Academy Awards. It also garnered most awards during the annual Critics Choice Awards held in 17th March.

Uber Technologies, Inc. (NYSE:UBER)

Uber Technologies is a leading company in the ride-sharing market. It has also revolutionized the food delivery sector offering cheaper and more reliable services. Since its debut in March 10, 2019, it continues to one of the most watched stocks. The leading Uber shareholder is Altimeter Capital Management, an investment firm based in California. The company’s 24millon shares are worth over $1.2 billion.

The company is undergoing a turnaround after years of not realizing profits. In 2019 and 2020, the company lost $4.04 and $3.86 a share. It is estimated to lose 20 cent a share in 2021 according to IBD. The stock also has a weak Composite Rating of 49 out of the possible 99.

Uber’s shares rose 2.5% Thursday and are so far above the 50-day average line. This means the stock is a “buy”. The best part, analysts point out the company as one of the growth stocks to watch out for. This is after a series of profitable acquisition in 2021.

 Apple Inc.(NASDAQ:AAPL)

Apple Inc. is one of the leading producers of consumer electronics such as smartphones and computers. UBS, September 29, maintained a Buy option for the stock targeting a $175 price. There are 138 hedge funds with a $145 billion stake. After the June-quarter report, the stock price reached its highest point in history.

After the release of the MacBook Pro notebook, new AirPods, and cost-effective Apple Music service on October 18, the share price rose $1.2%. In September, the company released the iPhone 13 series. An upgrade of the 12 series, it comes with a faster processor, better camera, and a long lasting battery.

There’s also enormous growth in the company’s wearable and service section. Services include AppleCare, Apple Store, Apple Music, Apple Pay, and others. This sector had a 26% revenue growth reaching $18.3 billion. The wearable unit saw a 12% increase in sales. And as speculation on Apple Car, there’s room for stock growth.

Alibaba Group Holding Limited (NYSE:BABA)

Alibaba is a China-based tech company dealing with internet, e-commerce, retail, and other sectors. KeyBanc, an investment advisory, maintained a buy option at a $200 price target. Fisher Asset Management, a Washington-based firm is the leading shareholder with 14 million shares worth over $3.2 billion.

The company saw a 36% increase in sales amounting to $31.1 billion year over year. Also, cloud computing service had a revenue growth of 33%. The merchandise sector saw a 14% rise with sales volume totaling $84.5 billion. The company reported there are more than 1.18 billion active customers.

The August 3 report highlighted a 22% rise in quarterly profit. For the past five years, the company’s stock has had an impressive track record, registering a 27% earnings growth per year. The company has five major brands namely Taobao, TMALL, YOUKU, Freshippo, and Ele.me.

Facebook, Inc (NASDAQ: FB)

Facebook is a tech giant based in California. It has recently changed its name to Meta Platforms, Inc. it is the parent company of WhatsApp, Instagram, Oculus VR, and others. After facing a month of political heat from the Senate and revelation from a whistleblower, the stock price continues to show an uptrend.

Insider Monkey is the leading shareholder with a total of $42 billion shares amounting to $40 billion. The company, facing rivalry from Apple, has had many Wall Street analysts come to its rescue. This has seen earnings and sales rise while its video sector paying off. The second quarter report reported a 56% surge in revenue reaching a $29.1billion mark. There was a 47% increase in ad prices and the ad impressions across the platform rose 6%.

Amazon.com, Inc. (NASDAQ:AMZN)

Not only do behemoth companies use it but also governments and multinational institutions. JPMorgan, an investment advisory, set the stock price target of the Washington-based company at $4,100. Citadel Investment Group, an investment firm tracked by Insider Monkey is the leading shareholder with more than 3.8 million shares with a worth of over $13 billion.

The third-quarter report showed a 15% increase in revenue amounting to $110.8 billion. The fourth quarter revenue forecast falls in the range of $130 billion and $140 billion. The AWS sector reported a 39% revenue growth hitting $11.6 billion. The company also released a variety of consumer electronics on September 28.

Salesforce.com, Inc. (NYSE:CRM)

In 2020, Salesforce stock became an entrant in the Dow Jones Industrial Average. It also replaced Exxon Mobil (XOM) getting a slot in the 30 stock benchmark. It was recently added to the IBD Long Term Leaders list. The company has also made notable acquisitions such as Exact Target, Demandware, and MuleSoft. This saw its revenue skyrocket in the years that followed the acquisitions.

Salesforce expects a revenue of between $26.25 billion and $26.35 billion in the 2022 fiscal year. In 2023, it expects a revenue range of between $31.65 billion and 31.80 billion. It also estimates huge revenue from its Einstein AI software.

Tesla, Inc. (NASDAQ:TSLA)

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