Growth stocks are the fastest way to double your money. While there may be more risk, if you play it right, the rewards can be worth the effort.
Due to the coronavirus, many growth companies now trade at value prices. This is the best time to take a chance.
The businesses below are world class, but short-term factors are hindering their stock prices. Buying now will give your portfolio juicy upside without betting the farm.
Branding is everything
If you want to buy stocks with long-term compounding potential, trust proven brands that consumers already know and love. Companies like Nike, Coca-Cola, and Procter & Gamble have made shareholders rich for decades by owning incredible brands.
The only bad news is that these stocks rarely go on sale. The COVID-19 crisis has provided one of those rare windows of opportunity.
If you live in Canada, you’re well aware of Canada Goose (TSX:GOOS)(NYSE:GOOS). It was founded in 1957, slowly growing into a household brand. More than 5% of all Canadians own one of its jackets. That’s quite a feat considering the average price tag is close to $1,000.
But Canada Goose isn’t just a Canadian play. In fact, U.S. sales growth last year was close to 30%. International sales growth was above 60%!
The coronavirus put those growth plans on hold, but long-term, the company should still more than triple in size. With shares at a multi-year low, now is the time to be patient and buy this proven winner at a discount.
Artificial intelligence growth
BlackBerry Ltd. (TSX:BB)(NYSE:BB) is an artificial intelligence company. But wait a second, isn’t it a phone company? Not anymore. Last year, the company ended its phone business entirely. Now, revenues are completely derived from cybersecurity software.
Where does the artificial intelligence factor in?
With cybersecurity, defense is the best offense. If you wait until a vulnerability occurs to fight back, you’re playing a losing game. That’s why BlackBerry is so excited about its Cylance division, which uses artificial intelligence to detect attacks before they happen.
Despite owning this technology, which has an independent valuation of nearly $2 billion, BlackBerry is worth just $3 billion. That’s a tragedy.
With Cylance, the company will be targeting some of the biggest growth opportunities of the decade. Many of BlackBerry’s peers trade at 10 times the valuation multiple. Now is the time to buy low before the market catches on.
Bet on a rebound
Today, however, the company is staging a rebound, driven by renewed demand for its end market: space equipment.
Maxar is one of the leading space equipment providers on earth. It makes every device and component imaginable, from satellites to velocity sensors. With SpaceX, OneWeb, Virgin Galactic, and Amazon Kuiper spending billions to ramp production, Maxar is perfectly positioned to benefit.
Despite a recent uptick, the stock remains 70% below its former highs. If you believe in the global space race, this is an ideal long-term growth pick.
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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. David Gardner owns shares of Amazon. The Motley Fool owns shares of and recommends Amazon, Canada Goose Holdings, Nike, and Virgin Galactic Holdings Inc. The Motley Fool recommends BlackBerry, BlackBerry, and MAXAR TECHNOLOGIES LTD and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon. Fool contributor Ryan Vanzo has no position in any stocks mentioned.