There are growth stocks and then there are hyper-growth stocks on steroids that can bring your returns to the next level, assuming you’ve got a long enough time horizon and a stomach for high-beta moves.
The two hyper-growth-stock sampler that I’m about to present to you today may not be timely buys at this instance in time, especially as the market-wide growth-to-value rotation continues to wreak havoc on the “sexy” growth plays of yesteryear.
If you are a young investor with an investment horizon beyond 10 years, however, you may want to consider taking a small nibble out of each stock, as you pray for it to go down, so you can add to your position. Be warned: these stocks are not for the faint of heart. They’re pure growth names with fairly small market caps, and they could face amplified volatility in the event of a recession, so with that warning out of the way, here are the two hyper-growth stocks that you should probably add to your long-term radar.
It’s pretty magical how a parcel can get across the country in a single day.
Cargojet is a major behind-the-scenes player that flies parcel shipments from point A to point B in a timely fashion.
The company owns an impressive fleet of over 20 cargo aircraft that are capable of hauling payloads that weigh up to 125,000 pounds, and with a virtual monopoly (controlling 90% of the Canadian overnight shipping market), Cargojet has the opportunity to keep all the riches to itself as it continues to profit profoundly off continued acceleration in the e-commerce market.
The company has skyrocketed 600% over the last five years, and with an excellent steward in CEO Ajay Virmani who continues to pull out all the stops (improving aircraft utilization and operational efficiencies), Cargojet is showing no signs of slowing down.
Speaking of exceptional stewards, it’s hard to top Canada Goose CEO Dani Reiss, a man who’s transformed a family business into an international growth sensation that’s able to command jaw-dropping high-double-digit growth numbers across the board. Gross margins, profitability, and top-line growth numbers, are all on the uptrend, and the best part of the story is, it’s just getting started.
For the latest quarter, the Goose saw revenues and EPS growth of 58.48% and 54.55%, respectively. With a Chinese expansion on the horizon, I have no doubt we could see the Goose continue to fly much higher, as one of the largest populations in the world has the opportunity to open their wallets to get a piece of one of the fastest-rising luxury brands on the planet.
With impeccable pricing power and an incredible 49.7% TTM ROE, long-term growth investors should be praying for a recession so that they can pick up shares of Canada Goose at a massive discount to its intrinsic value.
The Goose has so much higher to fly from here. The only thing holding me back from pulling the trigger is the fact that it’s a luxury discretionary name that has the potential to get obliterated come the next economic downturn. We’re in the late stages of a bull market, so don’t back up the truck on the Goose just yet.
Buy a tiny position today and hope it goes down in the medium term, as the markets continue to fight the Fed. Any drops in the Goose are a gift courtesy of Mr. Market!
Both Cargojet and Canada Goose are rocket fuel for any hyper-growth portfolio. With market caps of $1.1 billion and $7 billion, respectively, there’s no question that either name could easily become a significant multi-bagger over the next decade, even with a recession thrown into the mix.
Stay hungry. Stay Foolish.