The year 2020 has been driven by growth… the growth of digital trends, growth of e-commerce, and the growth of the millennial trader. One thing these trends have in common is the search for growth stocks. Investors, especially younger investors, have been searching for stocks that have shown strong growth in technology, e-commerce, and healthcare…
Hyper-growth stocks offer investors the potential for huge returns. If we take a look at the Direxion High Growth ETF (HIPR), the fund is up 20.5% since its inception date of June 11th, 2020, compared to a return of 16.4% for the SPDR 500 Growth ETF (SPYG) over the same time period.
The ETF offers exposure to US stocks with strong historical growth rates, and are positioned to potentially do so in the future. These stocks are not risky bets either. They are financially sound companies based on various quality, momentum, value, and volatility factors. In other words, they offer consistent and sustainable growth.
I choose four of the top stocks in the ETF that I feel are poised for high growth and strong return potential. These companies are Berkshire Hathaway (BRK.B), Mastercard (MA), Visa (V), and Vertex Pharmaceuticals (VRTX).
Berkshire Hathaway (BRK.B)
BRK.B is well known as Warren Buffet’s investment vehicle, but it is also one of the largest property and casualty insurance companies measured by premium volume. The company is a conglomerate with more than 90 subsidiaries engaged in a wide array of businesses. The company has grown through strategic acquisitions and currently has a strong cash position to support future buyouts.
When you think of consistency, you think of Buffett and Berkshire. BRK.B has returned an average of 20.3% per year over the past 55 years. The stock is currently up 31% since March 23rd. Analysts expect revenues to grow 15% and earnings to increase 15.8% next year. The company’s property and casualty insurance businesses have performed quite well and have driven growth for the company.
Its Utilities and Energy business has grown with increased revenue from Burlington Northern Santa Fe Corp., railway acquired by BRK.B in February 2010. The stock is rated a “Strong Buy” in our POWR Ratings system. It holds grades of “A” in Trade Grade, Buy & Hold Grade, and Peer Grade, which are three out of the four components that make up the POWR Ratings. The stock is also ranked #3 out of 59 companies in the Insurance – Property & Casualty industry.
This financial company has undoubtedly benefited from the pandemic as more and more consumers are opting to pay by credit card through e-commerce and in person at the supermarket to avoid contracting the virus from cash. The company has made several acquisitions to supplement growth and diversify its revenues. These acquisitions have been focused in areas such as data analytics, cyber, and intelligence that has helped MA expand its market and drive new revenue streams.
MA is set for robust growth based on its market share and core business model that should continue to be driven by new acquisitions and an expansion of its service offerings. Analysts expect revenues to…
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