Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.
Based on their strong fundamentals, space to expand, and trading activity tapping into the institutional investor pool, growth stocks should be a part of every stock trader looking beyond weekly fluctuations. Despite issues with volatility and lower dividend yield, growth stocks add value to your stock portfolio in the long run. Here are October’s best growth stocks to buy now.
Value stocks are stocks which are determined to be trading less than their assumed value, based on fundamental analysis, to include dividends, earnings, sales, or other factors. In this sense, growth stocks differ from value stocks in a major way: growth stocks are expected to grow far above the average growth rate in their respective market.
Many investors target growth stocks because of their massive potential. The following explains four of our top picks for the best growth stocks to buy in the month of October.
Founded at the onset of the digital revolution, in 2002, Roku, Inc. was among the first streaming platforms. ReplayTV launched Roku’s growth to today’s net worth of $2 billion. Flourishing under its deal with Netflix and 2007, Roku established itself as a streaming provider.
In 2014, Roku shifted its business model to the Chinese market with the onset of smart TVs. Expanding within the growing smart TV market, Roku TV became the streaming provider for Westinghouse, Hisense, Sharp, and TCL.
Roku’s year-to-date (YTD) outperformance vs SPDR S&P 500 ETF (SPY) is +32.61%.
Roky’s YTD outperformance vs tech SPDR ETF (XLK) is +10.68%
Overall, Roku’s sales growth over three years is +41.82%, while its earnings growth was in decline by -157.11% due to expansion ventures.
Etsy has already appeared on a previous stock recommendation list as one of the more resilient stocks you can find. As an e-commerce platform, it sailed right through the coronavirus pandemic unscathed. Moreover, it increased its traffic, brand loyalty and reach.
On top of that, Etsy is not just an e-commerce platform, but one that offers both artisans and buyers to create a viable ecosystem. This allows for a very low cost of operation with the focus on digital innovation instead, such as the VR viewing of products.
Etsy’s YTD outperformance vs SPY ETF is 163.37%
Etsy’s YTD outperformance vs Consumer Discretionary ETF (XLY) is 151.18%
Overall, Etsy’s sales growth over three years is +31.09%, while its earnings rate over the same period is +8.87%.
Any business trying to venture out into e-commerce will come across Shopify. Founded in 2006, Canadian Shopify provides a full suite of services that can be power any online store, no matter its size.
Yesterday, Shopify extended its market rally after Wedbush Securities upgraded its stocks to Outperform rating. According to Wedbush’s analyst Ygal Arounian, Shopify’s excellent retail model is well-poised to continue to expand revenue growth and gross merchandise volume.
Shopify’s YTD outperformance vs SPY ETF is +138.06%
Shopify’s YTD outperformance vs tech SPDR ETF (XLK) is 116.13%
Overall, Shopify’s sales growth over three years is +59.79%, while its earnings growth was -42.08%.
If you’ve spent any time with your smartphone, you have almost certainly experienced some form of monetization from all those free apps you installed. Their monetization is the core business of Digital Turbine, facilitating ads to almost half a billion users worldwide.
Digital Turbine provides all that is needed for this monetization: billing, interface, content development and content management. During September, almost all analysts rated Digital Turbine as a Buy, while only one analyst recommended a Hold option.
Digital Turbine’s YTD vs SPY ETF is +322.46%
Digital Turbine’s YTD vs tech SPDR Fund (XLK) is +300.53%
Overall, Digital Turbine’s sales growth over three years is +18.04%, while its earnings growth rate over three years is -9.34%.
Disclosure:Tim Fries has no positions in any of the stocks mentioned, and has no plans to initiate any positions within the 72 hours following the publishing of this article. This article expresses the opinions of Tim Fries. Tokenist Media LLC has no position in any of the stocks mentioned, and does not plan to initiate any positions within 72 hours of the publishing of this article. Please consult our website policy for more information.
Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird's US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firms specializing in sensing, protection and control solutions.