The performance of stock market so far this year has been downright dismal, thanks to various macroeconomic factors, including continued interest rate hikes. The bears don’t seem to want to hibernate any time soon. Thus, many might avoid buying growth stocks with massive valuations right now.
That said, not all growth stocks are created equal. Some actually have excellent fundamentals and are worth considering in this downturn.
Here are three such stocks I think are worth buying right now.
Top growth stocks: Boyd Group
In North America, Boyd Group (TSX:BYD) is one of the largest operators of non-franchised collision repair centres. Moreover, this company is also a major retail glass operator in the United States.
It’s Boyd’s earnings that makes this growth stock one to consider, in my view. The company’s most recent second-quarter results highlighted its year-over-year growth, which came in at 37.8% on the top line and 19.2% on the bottom line. Indeed, these sorts of results can be expected from many other tech-oriented stocks — not a business operating collision repair shops.
Be that as it may, Boyd’s growth-by-acquisition model is one that’s been successful thus far. For a company with a tremendous runway in this regard, I don’t see growth slowing anytime soon. We all need to drive our cars and replace our windshields from time to time, and Boyd will be here to do so.
Another more defensive growth stock I’ve been touting for some time is Alimentation Couche-Tard (TSX:ATD). This operator of gas stations and convenience stores has almost 15,000 locations all across the world. Like Boyd, Couche-Tard has grown to this massive size mainly via acquisitions over the years. And like Boyd, Couche-Tard’s market remains highly fragmented and open to consolidation.
This is another growth-by-acquisition play that has been extremely profitable for investors over the long term. In fact, despite this year’s terrible market performance, Couche-Tard is a stock that recently made new all-time highs. This speaks to not only the quality of the company’s business, but shareholder confidence in its ability to grow over the long term.
Perhaps the quintessential Canada-based fast-food operator, Restaurant Brands (TSX:QSR) has been on my list of top growth stocks to buy for a long time.
Indeed, despite this company being defensively oriented as well, Restaurant Brands is a company that’s continued to grow domestically and abroad. However, it’s Restaurant Brands’s international growth that I’ve looked to as a key reason to hold this stock, with the company set to open hundreds of locations in China alone in the coming years.
Under its core banners which include Tim Hortons, Burger King, Popeyes Louisiana Kitchen, and Firehouse Subs, Restaurant Brands has a diversified and strong portfolio of businesses which provide stability in good times and in bad. With the pandemic behind us (largely, despite Chinese lockdown headwinds), I think QSR stock has the potential to take off in the years to come.
This is a longer-term play, and one I think will take time to play out. But when China fully reopens and turns its attention to growth, Restaurant Brands will be there to help accelerate such growth moving forward.
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