It’s been tough to be an investor of late. Stocks are dishing out plenty of drama (and volatility) this year, making it uncomfortable to stick with them.
If your time frame truly is “forever,” though, it doesn’t really matter. There are still lots of great growth stocks you can jump into for at least the next several years regardless of their recent action. Here’s a closer look at four of your best bets.
DexCom
DexCom (DXCM) is a leading name in next-generation continuous glucose monitoring systems. The latest iteration of its flagship device — the G7 — offers the same game-changing feature that the prior six versions of its tech have. It has an automated means of keeping constant tabs on blood glucose levels. That’s a huge deal for diabetics.
And the company’s numbers confirm strong demand. Last quarter’s top line grew 18% year over year, following 2022’s full-year top-line growth of 19%. This full year’s and next year’s expected revenue growth both stand in excess of 20%.
This is just a taste of DexCom’s likely long-term future. The International Diabetes Federation believes the worldwide number of diabetics will grow from 2021’s 537 million to 643 million in 2030 and to 783 million by 2045.
And that growth may understate the company’s ultimate potential. Many diabetics who could benefit from a glucose monitor aren’t yet using one. As they increasingly embrace such a solution, DexCom stands to benefit. Ditto for DexCom’s shareholders.
Dutch Bros
Most fans of quick-service coffee joints are familiar with Starbucks. But that’s not the only java joint out there. A much smaller chain called Dutch Bros (BROS) enjoys its own loyal customer base. And it’s growing fast.
Founded in 1992, Oregon-based Dutch Bros started out as a single pushcart coffee stand. Leveraging its unique vibe and a handful of exclusive drink offerings, the company’s grown to 716 stores operating in 14 different states. Most of that expansion has taken shape in just the past few years. For perspective, Starbucks operates more than 17,000 locations in North America alone.
That’s still only a fraction of its potential, though. Last quarter’s 45 new stores and year-over-year revenue growth of nearly 30% has been roughly the norm for a while now, and it’s in line with the sort of sales growth that analysts expect for the remainder of this year and next.
How’s this kind of growth happening in such a saturated market? Simply put, the company is capitalizing on consumers’ fatigued interest in the aging and all-too-common Starbucks brand; never even mind its distracting labor woes. (Several Starbucks stores have unionized in recent months, putting a spotlight on the company’s treatment of workers.)
Dutch Bros doesn’t face the same sort of headache. Being a smaller organization, it’s better equipped to be the “community-driven, people-first” company it claims to be. And being a younger company, it seems more in tune with modern societal norms that matter most to consumers.
ASML Holding
When investors think of semiconductor stocks, ASML (ASML) isn’t often a name that comes to mind. Big mistake. This Netherlands-based $274 billion behemoth is not only growing fast, but many of the industry’s key players would struggle to operate without ASML around. That’s because the company supplies chipmakers with the equipment and supplies needed to make semiconductors.
The science of manufacturing has seen several enormous evolutions since its infancy. The latest of these is also arguably the most game-changing. That’s the introduction of lithography, or the use of ultraviolet light to effectively “etch” a semiconductor onto a circuit board. It’s fast, cost-effective, and allows for the mass creation of very small (and therefore power-efficient) chips.
This stock’s been a lackluster performer of late, largely due to worries of a sweeping slowdown of the world’s semiconductor business. But that’s a short-term concern that ignores a much bigger two-part backdrop. Demand for microchips is still accelerating, and a huge number of these chips will need to be made with lithography.
To this end, despite weakness in China during the first quarter, the company anticipates a big recovery of the region’s chipmaking industry through the end of this year as political complications get worked out. At the same time, the United States’ budding semiconductor manufacturing business is going to rely heavily on ASML’s technology.
Yes, this company has enough political leverage and patents to monetize both halves of the world. That’s why this year’s revenue is expected to soar to the tune of nearly 26%, followed by healthy 12% growth next year.
Booking Holdings
Finally, add to your shopping list the online travel-booking name Booking Holdings (BKNG), parent of such sites as booking.com and priceline.com. There was a time not too long ago — at the height of the pandemic — when travel stocks were essentially untouchable. People weren’t going anywhere for any reason. That’s changing now. But with little more than a passing glance, it seems the recovery is a slow one.
Take a closer look at the most recent headlines, however. The American Automobile Association reported last week that more Americans will be traveling by air this upcoming Memorial Day weekend than did so in pre-pandemic 2019. Specifically, the organization expects 3.4 million Americans to travel by air this holiday weekend, up 5.4% from 2019’s tally. That growth follows record-breaking travel within China earlier this month during the country’s equivalent to the United States’ Labor Day holiday.
At the same time, the World Travel & Tourism Council believes global tourism revenue will grow for a third year in a row in 2023, coming within 5% of 2019’s levels en route to a full recovery by 2024. As for business travel, Deloitte says it’s also on the road to recovery, and should eclipse its pre-pandemic peak by late 2024 or early 2025.
Consumers are looking for new experiences again, and companies are doing more in-person business. That’s why Booking’s revenue is expected to improve to the tune of 20% this year. Next year’s projected top-line growth of nearly 12%, meanwhile, feels conservative given the backdrop.
— James Brumley
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Source: The Motley Fool