As we’ve seen over the past decade, a buy-and-hold strategy has been central to the ability of long-term investors to hold onto their returns. Indeed, this bull market has challenged the idea of what many investors believe “frothy” means. Valuations are incredible, and growth stocks seem to only continue higher.
That said, there’s a time when everything reverts toward a longer-term mean. Every bull market in history — particularly those that see valuations expand as rapidly as they have this past decade — ends in tears at some point. Accordingly, buying top-notch growth stocks should be a primary goal of investors right now.
Here are two of my top picks in this regard right now.
Top growth stocks: Restaurant Brands
Canadian multinational fast-food company Restaurant Brands (TSX:QSR)(NYSE:QSR) has been on my watch list for a very long time. Indeed, after a recent dip, QSR stock is starting to look attractive to me at these levels.
This company’s historical growth track record is impressive. Of course, the pandemic stifled some of this growth last year. However, Restaurant Brands has shown a relatively strong recovery in recent quarters.
Despite this rather strong recovery, shares of Restaurant Brands stock have continued to dip, now trading at a 15% discount to their 52-week high. I’m of the view this discount is simply too juicy to ignore for a few reasons.
First, Restaurant Brand’s long-term growth profile remains strong, particularly in Asia. The company has been making big waves in China, with Tim Hortons China entering a merger deal with Silver Crest Acquisition Corp. This deal could enhance the growth trajectory of Restaurant Brands and provide a boost to the company’s valuation.
Second, I like Restaurant Brands’s organic growth. This company’s same-store sales have continued to be robust, and I expect continued outperformance over the long haul.
All in all, Restaurant Brands is one growth stock that I think is worth hanging onto for the next decade or two.
Shopify (TSX:SHOP)(NYSE:SHOP) has been among the best-performing long-term holdings for investors since its IPO. This top growth stock continues to provide mind-blowing capital gains for investors who are patient.
Now, Shopify stock has gotten to this place with help from multiple expansion over time. Accordingly, investors note that this stock isn’t cheap. Far from it. At a valuation multiple of around 50 times sales, Shopify stock is in the nosebleeds in terms of valuation.
Much of this valuation is due to improved sentiment among investors looking at the e-commerce space. Indeed, the pandemic simply pulled future demand forward, with businesses forced to grow an online presence or be forced to shut down.
However, there are strong secular catalysts underpinning the rise of e-commerce-related stocks like Shopify as well. Accordingly, this is a growth stock with tremendous near- and long-term potential.
Those looking for a higher-risk, higher-reward growth stock in the tech space would do well to consider Shopify on any dips moving forward.