As a growth investor, I’m always looking for stocks to add to my portfolio. I try to stick to companies that are clear leaders within their industries and have long histories of outperformance. Although I tend to invest in tech stocks, I keep an open mind and consider stocks in other sectors as well. In this article, I’ll discuss three stocks I plan to buy in 2022. All three stocks could continue to post incredible returns over the next decade.
A top e-commerce stock
When it comes to growth stocks, I tend to gravitate towards the e-commerce industry. As a millennial, I’m very familiar with online shopping. In fact, you could say that my generation has grown up alongside the e-commerce industry. Today, it’s very common to see packages from online shopping order to be delivered at my home at least once a week. One company that has played a vital role in making online shopping accessible to consumers is Shopify (TSX:SHOP)(NYSE:SHOP).
The company provides a platform and all the tools necessary for businesses of all sizes to operate online stores. Unlike listing products on Amazon, when a business chooses to use Shopify, it has the ability to keep its branding. This is a very important aspect for companies that wish to maintain their own identity. More than 1.1 million merchants around the world rely on Shopify, including large cap stocks like Netflix. As e-commerce continues to increase in penetration, investors could see Shopify’s revenue and earnings grow as well.
This company is a great blue chip for your portfolio
Over the past couple years, many cloud-based and AI-powered tech companies have received a lot of attention from investors due to the innovative products and services they provide. However, tech companies that don’t operate in those areas can be just as rewarding to hold in your portfolio.
Take Constellation Software (TSX:CSU) for example. It’s a consolidator of vertical market software companies. Constellation identifies and acquires standout businesses then provides the resources and coaching required to turn them into excellent leaders in their respective fields.
The formula that Constellation has developed in order to identify potential acquisition targets has proven to be very successful over time. Since its IPO, Constellation Software stock has grown at a CAGR of about 36%. In fact, a $10,000 investment made at Constellation’s IPO would be worth more than $1 million today. The stock has grown more than 34% over the past year, which indicates that it may not be slowing down at all.
Growth can be found outside of the tech sector
Investors hoping to find companies outside of the tech sector have many choices available to them. Brookfield Asset Management (TSX:BAM.A)(NYSE:BAM) is an example of an excellent growth stock outside of the tech sector. It invests in and operates assets within the infrastructure, real estate, utility, and private equity markets. Brookfield’s portfolio of assets is worth more than $625 billion, making it one of the largest alternative asset management firms in the world.
Since its IPO in January 1995, Brookfield stock has grown at a CAGR of more than 15%. That gives it a performance nearly three times greater than the TSX over the same period. In 2021, Brookfield announced that it would be developing a large-scale sustainable neighbourhood in the U.S. in partnership with Tesla. This could be a major catalyst for Brookfield stock in the coming years.
