At The Motley Fool, we don't believe in get-rich-quick gimmicks. Instead, we strive to find winning growth stocks that will double or triple our initial investments over the long haul. One of the best ways to accomplish this is to invest in high-growth stocks and hold them for many years. But growth investing requires that you check your emotions at the door. That's because truly disruptive growth stocks are often hidden in plain sight behind pricey valuations, sky-high P/E ratios, and largely unproven business models. However, if you can look beyond these things and focus instead on companies with sustainable competitive advantages over industry rivals, you're sure to uncover some long-term winners.
To help you get started, three Motley Fool contributors explain why Amazon.com (AMZN -1.64%), Tesla Motors (TSLA 12.06%), and WhiteWave Foods (WWAV) could each double your money.
Joe Tenebruso: My choice for a stock that could double in the years ahead might surprise many of you, mainly because of the already immense size of the company. I'm referring to retail titan Amazon.com. The stock is already a 100-bagger for early shareholders, but I believe this business could still deliver multibagger returns to patient investors. Here's why.
While e-commerce has enjoyed incredible growth since Amazon's IPO in 1997, online sales still comprise less than 10% of global retail sales. With much of the rest of the world not yet online, I expect this figure to grow significantly for years and even decades. What's more, the rise of the global middle class will usher in more prosperity for millions of emerging-market consumers, and as their purchasing power grows, much of their consumption will take place online.
Amazon is one of the businesses best positioned to profit from this megatrend. The e-commerce giant has several extremely strong competitive advantages. First, the fact that Amazon doesn't have to maintain physical store locations gives it a lower cost structure than its traditional retail competitors, which Amazon passes on to its customers in the form of lower prices. Second, Amazon can offer a wider selection of items for sale than could be housed by brick-and-mortar storefronts. Third, Amazon has become a trusted brand and has earned tremendous mindshare among consumers. In fact, it is increasingly becoming the first -- and often last -- place online shoppers go for an ever-increasing array of goods.
Simply stated, Amazon's website offers customers the ability to shop from one centralized location that offers lower prices on an unmatched selection of goods, with free shipping and top-ranked customer service, from a brand that consumers trust -- all at a time when millions more consumers will be purchasing goods online. That's a tremendous recipe for success -- for Amazon and its shareholders.
Anders Bylund: Can Tesla Motors double your investment? I'd say it's almost a certainty -- but I can't tell you when it will happen. First, Tesla already has a history of extreme growth. The stock has doubled in less than a year, soared nearly fivefold since May 2013, and generally treated its shareholders like kings throughout its young life.
These are still early days for the electric-vehicle pioneer. In the just-reported third quarter, Tesla delivered 7,785 vehicles worldwide, setting a company record. Meanwhile, in Michigan, Ford shipped 1.5 million vehicles in the same quarter, and was disappointed over shrinking volumes.
Tesla sells its vehicles as fast as it can build them, and this will be the case for many years. The Gigafactory, now under construction in Nevada, will produce more rechargeable batteries in 2017 than the entire global production of such batteries today, removing the largest bottleneck from Tesla's manufacturing pipeline. If Tesla's stock hasn't doubled by then, this huge volume spike will surely do the trick.
Thanks to falling battery prices and a relentless stream of innovation, Tesla actually looks cheap today. It's just that the big profits are a few years down the road, and the delay is making traditionalists uncomfortable. But for growth investors with a little bit of patience, Tesla looks like a runway getting ready for takeoff. This might be the easiest long-term double (and more) in my personal portfolio.
Tamara Walsh: WhiteWave Foods might not seem like the obvious choice when it comes to stocks that promise to double your money -- particularly because shares have already climbed nearly 85% in the past year. However, a closer look reveals WhiteWave is still in the early stages of its growth story. International expansion is one catalyst that should push the stock higher in the years to come. Up to this point, WhiteWave has generated the majority of its revenue within the United States. However, that is about to change thanks to a joint venture in the world's largest consumer market.
WhiteWave teamed up with one of China's largest dairy producers, Mengniu Dairy, about two years ago. The U.S. consumer foods and beverages company plans to begin manufacturing and selling its products in China in early 2015. Therefore, WhiteWave Foods' 49% stake in the venture should translate into meaningful sales growth for the company down the road as Chinese consumers become more familiar with WhiteWave's growing portfolio of brands.
On top of this, the company continues to grow its market share in the burgeoning plant-based beverage and nondairy creamers category. WhiteWave recently acquired So Delicious, a dairy-free beverage and dessert maker, for $195 million. So Delicious has transformed from a niche nondairy ice cream maker brand into a consumer favorite. The company has grown its sales 25% year to date to $115 million, thereby reflecting the broader trend in which more shoppers are opting for non-GMO plant-based foods today.
WhiteWave Foods has an impressive portfolio of fast-growing brands including Silk soy milk and almond milk, Land O'Lakes butter, and Earthbound Farm organic produce. Consumers can't seem to get enough of these products. In fact, WhiteWave's Silk almond milk generated sales growth of 45% during the second quarter. With international expansion in key markets and new product categories on deck, I suspect investors could double their money by owning WhiteWave stock for the next two to three years.
