Since the market crash in 2020, growth stocks have seen incredible returns. The returns some stocks have seen in the past 12 months have been so exceptional that both retail and institutional investors around the world have been worrying about a stock market bubble. Whether there is a bubble, we’ll never know — at least until after it pops. What we can say for certain is that there are some excellent growth stocks that have cooled off since the start of the year.
In this article, I will discuss two companies that I believe are in an excellent position for investors to add shares to their portfolio. Both companies had red-hot run in 2020 and are poised to continue growing over the next few years.
The world is quickly becoming more digital
As the world becomes more digital, businesses around the world will need to adapt. We have seen a massive shift in the enterprise space because of this. Companies that allow for remote and work-from-home experiences have seen incredible growth over the past year. One of these companies is Docebo (TSX:DCBO)(NASDAQ:DCBO).
Very few investors caught wind of its October 2019 IPO. Until the market crash last February, the stock had only gained about 25% since its IPO. Some may say, “well, 25% in a span of five months is pretty impressive.” However, today we’re seeing tech stocks more than double in a span of two or three days since IPO. So, a 25% gain over five months is quite modest for today’s standards.
Once the market hit its lowest point in March, investors quickly realized the opportunity Docebo presented and jumped on the stock quick. From its lowest point to its all-time high, Docebo stock gained more than 650%! However, since the market opened for trading in 2021, Docebo has fallen about 20%.
I believe this is still an excellent company to hold for the long haul. At the end of last year, Docebo announced a multi-year partnership with Amazon that will allow the company to power AWS Training and Certification offerings worldwide. Docebo also held its American IPO last year, giving the company more opportunities to access capital. Docebo provides a premier eLearning platform for enterprises and its stock price will reflect that in a few years.
Renewable energy will power the future
Another large trend gaining momentum around the world is the adoption of renewable energy. Particularly within the utility space, countries are beginning to pump serious money into clean energy. Newly elected American president Joe Biden has already announced his plans to invest $400 billion into clean tech over the next 10 years. One of the companies set to benefit from this massive trend is Brookfield Renewable Partners (TSX:BEP.UN)(NYSE:BEP).
One of the most attractive points about this company is how transparent its management team is. Brookfield Renewable has clearly stated goals for its shareholders and reports on them on a regular basis. Brookfield Renewable aims to return 12-15% to shareholders on an annual basis. Since 2003, the company has performed much better than that, returning nearly 20% on an annual basis.
After a very impressive run over the past two years, Brookfield Renewable stock has flattened since the start of the year. However, all the signs suggest that Brookfield Renewable is really just at the start of its growth story. I would be comfortable holding this stock in my portfolio for the next decade.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Fool contributor Jed Lloren owns shares of Brookfield Renewable Partners and Docebo Inc. David Gardner owns shares of Amazon. The Motley Fool owns shares of and recommends Amazon and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon.