Long-term growth investors are undoubtedly on their toes right now. Interest rates are rising, and the valuations many growth stocks have garnered are being called into question. Accordingly, there’s some bearish sentiment building today.
Indeed, a growth to value rotation appears to be forming. Growth investors may be considering running for the hills here.
I don’t think that’s a smart thing to do right now. In fact, I think many growth stocks remain solid picks for long-term investors at these levels.
Here are three growth stocks I think are perfect for long-term investors today.
Constellation Software
Constellation Software (TSX: CSU) continues to be one of my top picks as far as long-term TSX growth plays go. And for very good reasons.
This company continues to be a best-in-class consolidator of the fragmented and growing software industry. With an abundance of prospective acquisition targets in the market today, coupled with a track record of providing continual growth over the long term for its investors, Constellation is set up perfectly for long-term capital appreciation.
Moreover, Constellation has a knack for making the right calls, with more than 500 successful M&A deals under its belt. A high-quality long term growth gem, Constellation shares have gone up by 2,500% this past decade, and close to 250% over the previous five years. These are certainly the types of long-term returns growth investors want. I don’t see any reason to believe these returns will suddenly stop anytime soon.
Restaurant Brands
My partiality toward Restaurant Brands (TSX: QSR)(NYSE: QSR) continues to prevail. Indeed, Tim Hortons – a Canadian household name, is contributing to the bearish sentiment around Restaurant Brands’ stock of late. However, the reopening thesis remains strong with this Oakville-based company.
The company’s world-class banners extend beyond Tim Hortons. Indeed, Restaurant Brands’ other core banners – Burger King and Popeyes Louisiana Kitchen – have impressive long-term growth prospects in emerging markets like Asia. As far as global brands go, this company’s portfolio is among the best on the TSX today.
Should vaccine rollouts prove successful, I’d expect to see some impressive earnings on the horizon. Accordingly, I’d suggest long-term investors consider this stock at these levels right now.
Spin Master
Spin Master (TSX: TOY) is a unique growth play for long-term investors to consider today.
Although primarily a toy company, Spin Master has made some very good headway into high-growth segments including digital gaming of late. The company’s Toca Life World app is gaining a lot of traction and is boosting profits at a tremendous margin. Indeed, 400% year-over-year growth is noticeable, and investors have begun to pick up on this with Spin Master stock of late.
Shares of Spin Master have more than doubled over the past year, reflecting this performance. However, I think much more in the way of outperformance is on the horizon. This goes double if the company can replicate these results in the quarters to come.
Spin Master recently announced it generated free cash flow of $124 million in the latest quarter and $230 million for the full year. Moreover, with improvement in sales and effective cost-cutting strategy implementation, my bet is Spin Master is well positioned to grow profitably, given that they continue to make the right moves.
