Got $1,000? Buy These Hot Growth Stocks Before They Take Off

Are you interested in buying growth stocks? Here are two picks that investors could confidently put $1,000 towards.

| More on:
Plant growing through of trunk of tree stump

Source: Getty Images

Growth stocks can be very interesting assets to hold in a portfolio. In my opinion, there are two main reasons for this. First, those businesses tend to be very exciting to follow. This is because growth stocks tend to operate in fast-moving industries and are continually innovating in order to stay ahead of their competitors. Second, growth stocks have the potential to outpace the broader market, which could result in lucrative returns over the long run.

I’ll discuss two hot growth stocks that investors should consider buying before they take off.

This proven winner should be in your portfolio

If there’s one growth stock that investors should consider buying today, it’s Constellation Software (TSX:CSU). For those that are unfamiliar, this is a conglomerate tech company that has made a name for itself over the years for being a serial acquirer of vertical market software (VMS) businesses. Since its initial public offering in 2006, Constellation Software stock has gained more than 12,600%. That represents a compound annual growth rate (CAGR) of more than 30% over that period.

For most of its history, Constellation Software has focused on acquiring small- and medium-sized VMS businesses. That has served it very well, as the company has been able to become an expert in assessing and acquiring those kinds of companies. However, as stated in the opening, growth stocks are always searching for ways to stay ahead of their competition. With that in mind, Constellation Software has recently decided to begin targeting large VMS businesses for acquisition.

It’s expected that Constellation Software could stumble at first, as it tries to integrate this segment of its business into its playbook. However, with its founder Mark Leonard continuing to lead the company, I’m confident that Constellation Software could be successful in this endeavour. This stock has gained nearly 30% over the past three months. However, over the past year, Constellation Software stock has only gained about 10%. That’s much less than its annual average. I believe the stock could skyrocket over the coming years, making up for those lost gains.

The e-commerce industry is projected to grow at a fast rate

If you’re looking for another growth stock to add to your portfolio, then consider Shopify (TSX:SHOP). Since its founding, this has been one of the most innovative Canadian companies. Shopify has quickly grown from being a small tech start-up in Ottawa to one of the largest players in the global e-commerce industry. It’s estimated that over one million merchants rely on its platform today. That includes everyone from the first-time entrepreneur to large-cap enterprises like Netflix.

Shopify looked very solid during its most recent earnings presentation. The company announced that its fourth-quarter revenue had increased 26% year over year. In my opinion, that’s a very good performance in a year where consumer spending hasn’t been the highest. With the e-commerce industry projected to grow at a CAGR of nearly 15% through to 2027, Shopify has a great opportunity to continue its strong growth.

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 Jed Lloren has positions in Constellation Software and Shopify. The Motley Fool has positions in and recommends Shopify. The Motley Fool recommends Constellation Software and Netflix. The Motley Fool has a disclosure policy.

More on Tech Stocks

Digital background depicting innovative technologies in (AI) artificial systems, neural interfaces and internet machine learning technologies
Tech Stocks

3 Millionaire-Maker Tech Stocks That Should Be on Your Radar

These three tech stocks have already proven themselves worthy, but have a lot more to prove in the near future.…

Read more »

A close up image of Canadian $20 Dollar bills
Tech Stocks

3 No-Brainer Stocks to Buy With $20 Right Now

These three stocks are easy buys for those who don't have all that much to spend, and want long-term growth…

Read more »

A shopper makes purchases from an online store.
Tech Stocks

1 Tech Stock I’d Buy Before Shopify

Shopify (TSX:SHOP) stock might be stagnating, which could mean this other tech stock is at a prime advantage.

Read more »

man touches brain to show a good idea
Tech Stocks

Nvidia Stock Becomes World’s Most Valuable Company: Buy Now or Beware?

Nvidia (NASDAQ:NVDA) stock is now the world's highest valued company, with a market cap of US$3.34 trillion. So, is the…

Read more »

Dice engraved with the words buy and sell
Tech Stocks

Is Lightspeed Stock a Buy, Sell, or Hold?

Lightspeed (TSX:LSPD) stock was supposed to surge after Dax Dasilva's return, yet it's still stagnating. So, what should investors do…

Read more »

Digital background depicting innovative technologies in (AI) artificial systems, neural interfaces and internet machine learning technologies
Tech Stocks

1 of the Best Canadian AI Stocks (With Dividends) to Buy Now

OpenText is an AI stock that trades at a significant discount to consensus price target estimates in June 2024.

Read more »

online shopping
Tech Stocks

3 Reasons to Buy Shopify Stock Right Now

Improving earnings quality, sustained cash flow growth, and another reason support a buy-the-dip thesis on Shopify (TSX:SHOP) stock today

Read more »

TFSA (Tax-Free Savings Account) on wooden blocks and Canadian one hundred dollar bills.
Tech Stocks

2 Canadian Growth Stocks I’d Stash in a TFSA for the Long Run

Here's why Constellation Software (TSX:CSU) and Shopify (TSX:SHOP) are two top Canadian stocks long-term investors should consider.

Read more »