In this article we will take a look at the top 10 high growth stocks to buy in 2021.
Ever since the mass production of COVID-19 vaccines was given the greenlight, the stock market has been surging. However, the first few months of the year have proven that there is still a lot of uncertainty in the air as investors exercise caution in the wake of social media speculation, vaccine nationalism, and company valuations based on numbers that could be pandemic-specific. Value stocks are having their day as growth stocks recede following financial volatility and uncertainty. But analysts believe that growth stocks are set to bounce back. The technology revolution is the prime move of growth stocks. A report by Value Line Funds says that S&P 500 Value Index outperformed the S&P 500 Growth Index from 2002 through 2006. However, things started to change in 2007 amid the rise of tech startups that disrupted key markets including transportation, payments, retail and healthcare. In the 13-year period through 2019, growth stocks outperformed value stocks in 10 years.
Top High Growth Stocks to Buy
In a digital world, social media plays the role that traditional market speculation usually does in the real world. However, there are safeguards against it in the real world. In the digital realm, with no such rules to fall back on, market speculation has taken on a new meaning. The role of firms like Reddit and Robinhood, where small-time investors banded together to spread utter chaos, has taught many a valuable lesson: sit out the meme stocks and hedge your bets on the growth stocks that are likely to offer handsome returns.
Financial volatility is not only affecting the individual investors. The entire hedge fund industry is also feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and February 26th 2021 our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 16th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
With this context and industry outlook in mind, let’s take a look at the 10 best high-growth stocks in 2021 that promise good returns. While choosing high-growth stocks for our article we gave preference to companies that have a lot of room to expand and grow, thanks to their innovative products and robust business models.
10. Zoom Video Communications Inc. (NASDAQ: ZM)
Zoom Video Communications Inc. (NASDAQ: ZM) is a California-based American technology firm specializing in video communications. Zoom was founded by former corporate executive Eric Yuan in 2011. The company was later rebranded as Zoom, inspired by a children’s book of the same name. Zoom offers users the ability to have video meetings, chats, and webinars in all sorts of different virtual rooms and workspaces. It also boasts an app marketplace that makes integration with other platforms easier.
The company has a market cap of more than $95 billion and reported more than $2.5 billion in profits in January 2021. In late March, the company announced that it was partnering with Formula One racing for the 2021 season and beyond. The firm said it would deliver communication services for the racing and explore the possibility of providing new business and hospitality opportunities through the experiences of the live sport. The shares of the company have soared since the pandemic as people use it to communicate remotely. It is one of the high-growth stocks to buy for 2021.
9. Shopify Inc. (NYSE: SHOP)
Shopify Inc. (NYSE: SHOP) is one of the best high-growth stocks to buy now. It is a Canadian multinational e-commerce firm that was founded by Tobias Lutke and Scott Lake as a platform to sell snowboarding equipment online. It was rebranded and launched as Shopify in 2006. The e-commerce platform is the largest one in Canada and gives new customers the ability to open their own online stories with many in-built features and applications to go with it. For example, one of these is the chance to sell products in your online marketplace, on Shopify’s platform, and also on social media.
The company has a market cap of more than $143 billion and reported a revenue of $2.93 billion in December 2020. American financial services firm Stifel, in late March, launched coverage on Shopify with a target of $1200. Scott Devitt, an analyst at the firm, said the company was positioned for sustainable growth. The company likes the stock because of the company’s international expansion, growth in enterprise merchants and product diversification. Shopify is one of the high-growth stocks to buy for 2021.
8. WELL Health Technologies Corp. (TSX: WELL)
Ranking 8th in our list of high-growth stocks to buy now is WELL Health Technologies Corp. (TSX: WELL). It is a Canadian healthcare company. It also operates in the United States and offers health firms the ability to keep electronic records, help with software-related issues, and telehealth services. The firm is also involved in developing digital health services for smartphones through different applications. Previously known as Wellness Lifestyles, the company rebranded itself as WELL Health Technologies in 2018. It was founded by Hamed Shahbazi and is headquartered in Vancouver.
The company has a market cap of close to $1 billion and reported close to $40 million in profits in December 2020. In February this year, WELL Tech bought Canadian health firm CRH Medical Corp in a deal close to $300 million. CRH is famous for services and products for the treatment of gastrointestinal diseases. The shares of CRH soared more than 78% after the announcement. The company is also planning a listing on the US stock market in late 2021 or early 2022 as it moves to expand outside the home country. This makes it one of the high-growth stocks to buy for 2021.
7. Baidu Inc.(NASDAQ: BIDU)
Baidu Inc.(NASDAQ: BIDU) is a Beijing-based multinational technology firm that works in artificial intelligence and internet-related products. The firm owns the largest search engine in the world and a mapping service named Baidu Maps. It also operates a cloud storage service and a digital encyclopedia. The company was founded by Chinese software engineer Robin Li in 2000. In 2007, Baidu was the first Chinese company that entered the NASDAQ 100 Index, making it one of the most valuable technology firms globally. BAIDU ranks 7th in our list of high-growth stocks to buy now.
The company has a market cap of over $77 billion and reported more than $16 billion in earnings in December 2020. Loop, a Chicago-based brokerage and investment firm, late last month upgraded its rating of Baidu to Buy from Hold on the back of the company leading the pace of the commercialization of autonomous vehicles in the Chinese market. Loop also noted that it expected gains from advertising on the Baidu search engine. Earlier, Baidu stock had fallen after American regulators tightened operating rules for dual-listed Chinese firms in the US. Baidu stock is still a high-growth stock well into 2021.
6. Alibaba Group Holding Ltd. (NYSE: BABA)
Alibaba Group Holding Ltd. (NYSE: BABA) is also a China-based multinational technology firm that focuses on e-commerce and internet-related products. It is one of the largest e-commerce platforms in the world and also operates the fifth-largest artificial intelligence company globally by the name of Alibaba Cloud. At its debut on the New York Stock Exchange in 2014, Alibaba raised $25 billion and made a name for itself as the largest initial public offering in the world at the time. In 2020, Forbes magazine named it the 31st largest firm globally. BABA ranks 6th in our list of high-growth stocks to buy now.
Alibaba has a market cap of over $608 billion and reported more than $70 billion in revenue in March 2020. Jackson Wong, an analyst at American professional asset management firm Amber Hill Capital, told American news site CNBC that Alibaba was still the top technology stock in China and would remain so for the time being. The comments on the back of increased regulatory pressure on dual-listed Chinese firms in the US resulted in decrease in share prices for these companies on public trading platforms. Alibaba stock is slated for high-growth in 2021.
5. Tencent Holdings Ltd. (OTC: TCEHY)
Tencent Holdings Ltd. (OTC: TCEHY) is a Shenzhen-based multinational technology firm specializing in internet-related services. It offers products in entertainment, artificial intelligence and other technologies. The company was founded in 1998 by a group of Chinese businessmen. American publication Bloomberg reports that Tencent is the largest video game vendor in the world. It operates a social network, a music service, a web portal, mobile and video gaming firms, as well as e-commerce and smartphone companies.
Tencent has a market cap of $800 billion, making it one of the most valuable companies in the world. It posted a revenue of close to $74 billion in December 2020. Tencent shares have continued to hold steady even after the regulatory scare that has affected other Chinese firms. The stocks of the firm had a strong 2020, closing on a 32% year-over-year growth in value-added services. The online advertising witnessed a growth of 20%. The firm also posted 26% growth in the digital payments and business services section. Shares in the firm have high-growth potential this year.
4. Docebo Inc. (NASDAQ: DCBO)
Docebo (NASDAQ: DCBO) is a Canadian software firm offering learning management systems to companies around the world. It was founded in 2005 by Claudio Erba who still leads the company. The software that the company markets makes it easier for businesses to organize their learning around digitally, thereby significantly reducing the costs of instructor-led courses. In March 2020, the stocks of the firm fell to their lowest ever before rebounding and gaining 650% by the end of the year. Docebo is a growth stock worth buying for investors.
The company has a market cap of close to $2 billion and reported more than $18 million in revenue in December 2020. Last month, the company announced a partnership with Amazon Web Services that led to an increase in stock price. The earnings report of the company from the fourth quarter of 2020 detailed that subscription revenue accounted for more than 89% of total revenue and had appreciated 49% compared to the previous year. The consistency of the share prices indicates that Docebo stock is one slated for growth in 2021.
3. Microsoft Corporation (NASDAQ: MSFT)
Microsoft Corporation (NASDAQ: MSFT) is a Washington-based multinational firm that sells computer software, consumer electronics, and other internet-related services. The company was founded by Bill Gates and Paul Allen in 1975 and is the 21st largest firm in the US in terms of total revenue. The firm is also one of the most valuable publicly traded companies in the world. The initial public offering of the company back in 1986 created three billionaires and some 12,000 millionaires.
The market cap of Microsoft is close to $2 trillion and it posted a revenue of $143 billion in December 2020. The US is presently outstripping other countries in providing the COVID-19 vaccine to its citizens, and it means the US economy will reopen before the other countries. This has led to a rise in share prices of big technology giants, including Microsoft. The share price of the firm is now at an all-time high. Hedge funds are also buying Microsoft stock, indicating it will grow over the course of the next year.
2. Amazon.com Inc. (NASDAQ: AMZN)
Amazon.com Inc. (NASDAQ: AMZN) is an American technology firm primarily in the e-commerce business. It also has ventures in cloud computing, artificial intelligence and digital streaming. The company was founded by Jeff Bezos in 1994 who continues to lead it. Bezos is also one of the richest men in the world, thanks largely to the value of his company. Amazon is the largest internet company worldwide in terms of the revenue it generates. It also has a thriving publishing and consumer electronics arm.
The market cap of Amazon is over $1.6 trillion and the company posted more than $386 billion in revenue last year. The share prices of Amazon are at an all-time high and top analysts in Wall Street are consistently bullish on the future outlook for the firm. Colin Sebastian, an analyst at American investment firm Baird, has deemed Amazon stock a fresh pick for 2021 and maintained a Buy rating for the shares with a price target of $4,000 in mind. Sebastian cited the subscription services model of Amazon as the key to its future growth in the internet market.
1. Genuine Parts Co. (NYSE: GPC)
Genuine Parts Co. (NYSE: GPC) is an American firm that distributes automotive and industrial replacement parts. It also sells office products and electronic materials. The company was founded in 1925 by Carlyle Fraser and is headquartered in Atlanta. It has more than 48,000 employees and 2,800 operation centers around the world. The company is also the owner of the NAPA Auto Parts brand.
Genuine Parts has a market cap of over $16.9 billion and posted a revenue of close to $4 billion in 2020. The stock price of the firm rose at the start of the week and is likely to continue to do so, making it one of the growth stocks for this year.
You can also take a peek at Top 10 Car Company Stocks to Invest In and Ray Dalio’s Top 10 Stock Picks for 2021.
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Disclosure: None. Top 10 High Growth Stocks To Buy in 2021 is originally published on Insider Monkey.
