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Apr 1, 2024 · Forbes Advisor has identified 10 of the best growth stocks based on recent and expected earnings growth. Companies that grow earnings and sales are generally rewarded with higher share prices.
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Aug 12, 2023 · We have ranked the 20 countries with the highest rate of economic growth in 5 years, using real GDP growth rates between 2018 and 2022. The data was sourced from the International Monetary Fund (IMF).
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3 days ago · To compile this list, we take into account the growth rates of revenue and earnings over the past year and prior year, as well as price-to-earnings ratios and dividend yield over the past year.
- 7 min
Dec 27, 2023 · Even though the companies on our list are spread across several continents, they have one thing in common: fast growth. Our list has an average sales growth rate of nearly 128% over the past five ...
- Overview
- Growth Stocks in the Current Market Environment
- How We Chose the Best Growth Stocks
- How to Invest Wisely in Growth Stocks
- How to Find Growth Stocks
- Are These the Best Growth Stocks?
Growth stocks are companies expected to generate earnings growth, revenue, and share prices that exceed industry peers. Instead of returning profits to shareholders through dividends, growth companies concentrate on increasing the share price by reinvesting in research, development, and expansion. While
can generate significant returns, they also carry higher risks because of market volatility.
, analyzing the sector and market conditions is crucial to determine if they favor the strategy. Growth stocks tend to perform better when the economy is expanding, and the cost of borrowing is low. Therefore, the current environment, characterized by higher
, slowing growth, and historically elevated inflation, doesn’t necessarily bode well for these stocks.
However, not all growth stocks are the same. Companies with a dominant market position, with a competitive edge, or in an industry poised for future growth will continue to outperform, whatever the macroeconomic conditions. For example, technology stocks outpaced the broader market in 2023, given the widespread adoption of
This is all the more notable since these companies tend to be hypersensitive to interest rate increases because they rely more heavily on borrowing to fund research and development.
We selected the 12 best growth stocks above based on the highest 30-day percentage return. Stocks that are outperforming industry peers and the broader market over this period have short-term momentum from positive
, good company news, or bullish technicals. If conditions remain favorable, stocks generating the highest 30-day returns will likely trend higher. Nevertheless, you should keep in mind that short-term performance may not reflect a sustainable growth trajectory.
Besides using the 30-day return to find suitable growth stock prospects, you should review the following
It's best to compare candidates using
to better understand their financial position, how the market views them, and their potential for generating future growth.
This reflects the percentage increase in a company's earnings per share over a specific period, such as a quarter. For instance, Apple (
) posted fourth-quarter 2023 EPS growth of 13.94% on a year-over-year basis, meaning its earnings in the fourth quarter of 2023 increased nearly 14% over the fourth quarter of 2022. Positive EPS growth indicates financial health and the potential to increase shareholder returns.
This ratio measures a company's stock price relative to its EPS. For example, Apple has a P/E ratio of 31.77, meaning investors pay $31.77 for every dollar the tech giant earns. A high P/E ratio suggests investors expect strong future growth but could signal an overvalued stock. Conversely, a low P/E ratio could mean the stock is undervalued or that the market expects it to generate slower earnings growth.
There’s no magic formula for calculating the most promising
You should consider a company’s financial health, competitive edge (if any), management, and returns compared with industry peers and the broader market.
While researching a company, review its revenue growth, EPS, and profit margins. A consistent track record of rising earnings could imply strong growth potential. Don’t focus on stocks that pay dividends if you want to invest in growth stocks as a strategy. Growth companies typically reinvest profits for further expansion, prioritizing share price appreciation over dividend payments.
You can see if a company has a competitive advantage by identifying any unique products, technologies, or services within its industry. A sustainable competitive edge should translate into long-term growth. For example, Tesla, Inc.
Determining the best growth stocks involves considering diverse factors. Just because the 12 growth names above have demonstrated
against the broader market over the past 30 days does not mean they will continue to do so. Companies that have generated impressive returns often face new challenges or less favorable market conditions, leading to a sudden reversal in their share price. This means constantly being on the lookout for the top growth stock that will replace them.
It’s also important to acknowledge that growth stocks may not be suitable for all investors, particularly risk-averse investors. While they can deliver impressive returns, they usually have higher volatility and risks, leading to extreme price fluctuations. While growth stocks offer the potential for outsized gains, you should ensure they align with your financial circumstances, life stage, and investment strategy. Diversification, risk awareness, and focusing on
goals should all be considered before adding growth stocks to your portfolio.
Country / Territory Total market cap (in mil. US$) Total market cap (% of GDP) Number of domestic companies listed Year United States 49,653,000 194.5 4,266 2023 China ...
Oct 17, 2022 · These 4 global stocks made the biggest gains last week — and analysts give one over 140% upside. These are the 10 top stocks in the MSCI World index that saw gains of more than 5% last week, as...
