For investors focusing on high-growth sectors, the past few months have been rather volatile. Indeed, growth stocks have been hit with various concerns, from tapering due to inflation to a rise in the Delta variant.
These concerns may be enough to keep many investors on the sidelines for now. However, those believers in the long-term outperformance these growth stocks are likely to have relative to the market may want to consider these two top picks.
Top growth stocks: Restaurant Brands
Indeed, Restaurant Brands’s long-term growth trajectory has been impressive. This is a company with some of the best fast-food banners in the world. Accordingly, investors focused on this stock are looking at how Restaurant Brands can accelerate its move into key markets, such as China.
My view is that Restaurant Brands’s discount to pre-pandemic levels isn’t warranted right now. Indeed, I view this stock as one of the best pandemic reopening plays right now. Accordingly, long-term investors would do well to consider this stock today.
One of the best-performing stocks on the TSX this year has been Spin Master (TSX:TOY). A company most investors know as a toy maker, Spin Master’s 70% increase since the beginning of the year stands out among consumer discretionary plays.
Well, this company isn’t exactly a consumer discretionary play. Rather, Spin Master has seen impressive growth in the company’s digital gaming segment, which has driven its stock price outperformance. I expect more of the same over the long term, and Spin Master is a cheeky digital gaming play right now.
Perhaps the best growth-at-a-reasonable-price play on the TSX is Alimentation Couche-Tard (TSX:ATD.B). Indeed, at a valuation of less than 17 times earnings, investors are getting a steal with this growth stock today.
Couche-Tard’s management team has a clear plan in place to double the company’s earnings over the next five years. Accordingly, investors picking up shares of Couche-Tard at these levels are buying the stock at a five-year forward price-earnings ratio of under nine. That’s cheap.
I think as gasoline demand as well as physical retail recovers from this pandemic, Couche-Tard is well positioned to take off. This is a company with one of the best pandemic reopening theses in the market today.
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 ALIMENTATION COUCHE-TARD INC and Spin Master Corp. The Motley Fool recommends Restaurant Brands International Inc.