Below we present the list of the 5 Best Fast Growth Stocks to Buy Now. For our methodology and a more comprehensive list please see the 10 Best Fast Growth Stocks to Buy Now.
5. Lululemon Athletica inc. (NASDAQ:LULU)
Number of Hedge Fund Shareholders: 50
Fitness apparel company Lululemon Athletica inc. (NASDAQ:LULU) is back on a roll. After a somewhat tepid fiscal 2020 during which EPS declined year-over-year and sales rose by just over 10%, the company followed that up with a big fiscal 2021, growing sales by nearly $2 billion and EPS by 66% to $3.00. Against those tougher comps this year, the company is continuing to excel. In its fiscal Q3 ended July 31, sales jumped by 23% year-over-year, while EPS shot up by 42%.
Nor does Lululemon Athletica inc. (NASDAQ:LULU) expect the gravy train to run dry anytime soon. The company is forecasting another 23% to 24% sales jump year-over-year in Q4 and envisions growing sales to $12.5 billion during its fiscal 2026, close to double what it pulled in during its FY21. With the vast majority of its sales coming from North America, there is untapped expansion opportunities overseas, which should help facilitate that growth.
There’s been growing hedge fund ownership of Lululemon Athletica inc. (NASDAQ:LULU) for three straight quarters, including a 16% jump during Q2. James Parsons’ Junto Capital Management and Steven Boyd’s Armistice Capital added LULU to their 13F portfolios during the quarter.
4. CF Industries Holdings, Inc. (NYSE:CF)
Number of Hedge Fund Shareholders: 52
Ammonia producer CF Industries Holdings, Inc. (NYSE:CF) is coming off a record 2021 fueled by rising fertilizer prices, which show no signs of regressing any time soon. It’s been a remarkable two-year run for the company following a sales and EPS decline in 2020. Revenue rose by more than 50% in 2021 to $6.54 billion, while EPS nearly tripled to $4.27.
Incredibly, the company’s pace of growth has accelerated even further this year, with its trailing twelve-month (TTM) sales ballooning to $11.1 billion and its operating income rising by about 150% compared to 2021, hitting $5.5 billion. CF shares have gained 51% this year, but still trade at less than 7x earnings, which suggests the market is skeptical of how long the good times will last. However, barring a dramatic reversal in Ukraine sometime soon, the good times should persist into the future for CF Industries.
Hedge fund ownership of CF Industries Holdings, Inc. (NYSE:CF) rose for six straight quarters through Q1 2022, more than doubling in total during that time. Numerous hedge funds decided the time was right to take their profits and get out of CF during Q2 however, as there was a 21% decline in smart money ownership of the stock. On the other hand, several bulls continued to enlarge their CF positions, including Cliff Asness’ AQR Capital Management, which hiked its position by 79% during Q2 to 1.82 million shares.
Chartwell Investment Partners sold off its stake in CF Industries Holdings, Inc. (NYSE:CF) during Q2, fearing a potential announcement of capacity additions, as relayed in its Q2 2022 investor letter:
“We sold the full position in fertilizer company CF Industries, which also had a 20%+ YTD return (through 6/30), as we had concerns that the company would announce capacity additions, which would negatively impact nitrogen pricing.”
3. Enphase Energy, Inc. (NASDAQ:ENPH)
Number of Hedge Fund Shareholders: 53
Enphase Energy, Inc. (NASDAQ:ENPH) is charging full steam ahead, as the maker of solar panel tracking technology will end 2022 having grown its sales by about 7x compared to 2018. And while the company’s earnings declined in 2019 and remained relatively flat over the following two years, they’ve also taken a big step forward this year. In Q3, Enphase grew its EPS by 433% year-over-year to $0.80.
It’s been a remarkable run for Enphase Energy, Inc. (NASDAQ:ENPH) over the past five years. The company’s shares were trading hands for less than $1 in the middle of 2017 and just five hedge funds held ENPH in their 13F portfolios at that time. Fast forward five years and 53 funds are long ENPH shares, which traded for $180 at the end of the quarter. Philippe Laffont’s Coatue Management raised its stake in Enphase by 804% to 1.37 million shares during Q2.
Carillon Tower Advisers believes Enphase Energy, Inc. (NASDAQ:ENPH) is a great way for investors to gain exposure to alternative energy, as noted in its Q3 2022 investor letter:
“Enphase Energy, Inc. (NASDAQ:ENPH) provides technology to manage solar generation, storage, and communication on one platform. The company reported an impressive quarter that exceeded investor expectations on all meaningful metrics, which sent shares higher. The stock remains a useful way to gain exposure to the secular theme of alternative energy and could benefit from the recently passed Inflation Reduction Act.”
2. Horizon Therapeutics Public Limited Company (NASDAQ:HZNP)
Number of Hedge Fund Shareholders: 67
Horizon Therapeutics Public Limited Company (NASDAQ:HZNP) has a growing pipeline of treatments for rare diseases, autoimmune conditions, and inflammatory diseases, which is propelling the company’s sales to new heights. Despite production pitfalls last year, Horizon still grew sales by nearly 50% to $3.23 billion, while EPS rebounded to $2.37.
Horizon Therapeutics Public Limited Company (NASDAQ:HZNP)’s growth will slow this year, with sales projected to climb to about $3.60 billion, with EBITDA coming in at $1.33 billion. But many of the company’s key products are growing sales rapidly. Thyroid eye disease treatment Tepezza has grown revenue by 37% year-over-year through the first nine months of 2022, while sales of gout treatment Krystexxa have grown by 27%.
Smart money ownership of Horizon Therapeutics Public Limited Company (NASDAQ:HZNP) jumped by 23% during Q2 to hit an all-time high, having more than tripled over the past four years. Several healthcare-focused funds are extremely bullish on HZNP, most notably John Paulson’s Paulson & Co, which owns 6.2 million shares on June 30 and has 24.4% 13F exposure to the stock, more than double the exposure it has compared to any other stock.
1. MercadoLibre, Inc. (NASDAQ:MELI)
Number of Hedge Fund Shareholders: 68
Topping the list of fast growth stocks to buy now is Latin American e-commerce giant MercadoLibre, Inc. (NASDAQ:MELI), whose shares are down 26% this year despite the company’s exceptional ongoing growth. MercadoLibre grew revenue by over 75% in 2021 to $7.07 billion and is on track to top $10 billion in sales this year.
The company has also become profitable within the last two years, growing operating income by nearly 5x during that period, while gross profit has nearly tripled to $4.56 billion over the trailing twelve months. One of the strongest growth and profit drivers for the company is its fintech business, which grew revenue by 115% during Q3 to account for 45% of overall sales.
Hedge fund ownership of MercadoLibre, Inc. (NASDAQ:MELI) has trended down over the past seven quarters, declining by 19% during that time. Despite that, the stock still ranks as the most popular fast growth stock among hedge funds. Cathie Wood’s ARK Investment Management owned 89,280 MELI shares on September 30, while David Blood and Al Gore’s Generation Investment Management owned the largest non-options long position in MercadoLibre as of June 30, holding 515,645 shares worth over $328 million.
Polen Capital likes MercadoLibre, Inc. (NASDAQ:MELI)’s disciplined aggression and sees a long runway of growth ahead for the company, as revealed in the fund’s Q3 2022 investor letter:
“MercadoLibre, Inc. (NASDAQ:MELI), a leading e-commerce marketplace and payments platform in Latin America, delivered better-than-expected results amidst a challenging backdrop. These results highlighted particularly robust results in their fintech segment, Mercado Pago, which surpassed $30 billion in total payment volume. Management has struck the right balance between being disciplined on margins given the macro backdrop, but also investing where appropriate as the company is in a much better financial position than many competitors, based on our research. We believe structural tailwinds like the transition to e-commerce and digital payments will continue to drive growth long term.”
For more of the latest stock picks worth considering for your portfolio, check out 11 Best Mineral Stocks To Buy Now and 11 Safe Stocks To Invest In.
Disclosure: None.
