The ideal growth picks in today’s environment are hard to identify. On the one hand, investors want companies with excellent historical track records of growth. On the other, one hopes that the long-term outlook will remain bullish for said companies.
Indeed, finding stocks before they’ve taken off can be more lucrative. However, holding great companies with sustainable growth-oriented business models has proven a winning strategy for many investors.
These companies certainly find themselves in this category. These are among the best long-term growth picks for investors today.
Let’s have a look.
The software sector is one of the first places many long-term growth investors go to look for upside. And Constellation Software (TSX:CSU) is one of the best stocks for investors venturing into this sector.
This company’s historical track record of growth is absolutely mind-boggling. The company’s grown via a string of hundreds of acquisitions into the company it is today.
The thing is, there remains substantial room for growth on the horizon. Constellation isn’t done consolidating this sector. Not by a long shot. Indeed, there remain thousands of similar opportunities available today to Constellation to continue this consolidation model.
Those with a long-term investing time horizon ought to consider Constellation today.
Similar to Constellation, Boyd Group (TSX:BYD) is another growth-by-acquisition play, but this time in the auto parts and body shop sector.
Now, this isn’t an as attractive sector to be in as software — by a long shot. However, Boyd’s business model is just as attractive as Constellation’s.
In fact, mapping these two stocks against each other shows an eerily similar long-term growth trajectory. These stocks are ones that have proven their capabilities as acquirers of high-quality assets at decent prices. Via synergies and consolidation, these companies have been able to grow their market share, margins, and profits over time.
Given the return to driving that’s likely to take place in the coming months, Boyd remains high on my list as a top pandemic recovery pick. Accordingly, long-term growth investors have yet another reason to own this growth stock today. As if another reason was needed.
This point-of-sale-oriented company has recently expanded into e-commerce in a big way. Accordingly, investors in Lightspeed have multiple long-term growth catalysts to rely on now as reasons to own this stock.
Lightspeed trades at an extremely high multiple based on its historical track record of growth. Accordingly, this company will need to keep up its pace of acquisitions and growth to justify this valuation.
However, if history has proven anything, it’s that Lightspeed knows how to do deals. For investors betting on companies with strong M&A strategies, these three picks are all intriguing right now.
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.
Fool contributor Chris MacDonald has no position in any stocks mentioned in this article. The Motley Fool owns shares of and recommends Constellation Software and Lightspeed POS Inc. The Motley Fool recommends Boyd Group Services Inc.