We all want to turn our rather meager savings into a pretty decent nest egg. To do so, we need to find investments that will grow handsomely over time. Here are three stocks that our contributors believe will do just that.
Keep your eyes on the big picture
Brian Feroldi: I think super-sized movie-theater screen producer IMAX (NYSE:IMAX) is a great growth stock to buy today. The company's future has never looked brighter, but shares have been sold off over the last few months for reasons I believe are temporary. That's a compelling combination for investors who take a long-term view.
In its latest quarterly report, the company had some difficult numbers to shares. Revenue dropped 14% to $91.7 million, and adjusted net income fell by more than 50% to $12.1 million. With numbers like that, you might conclude that this company's growth story is busted, but I believe that the opposite is actually true.
No, the year-over-year headline numbers don't look great, but that's only because the year-ago quarter was the highest-grossing box office quarter in IMAX's history thanks to blockbuster movies like Furious 7, Jurassic World, and Avengers: Age of Ultron. The company's quarterly results will always wax and wane based on how one or two hit films perform, so I don't think revenue and net income are the best metrics to look at.
Instead, I'd suggest investors focus their attention on new theater signings and installations. On those fronts, IMAX is really knocking it out of the park. The company signed up 95 new theaters during the quarter, which represents 217% growth. For 2016, IMAX now plans on installing 155 theaters, up from its original guidance of 115 to 120, which shows just how much demand there is for the company's offerings. That represents double-digit growth from its current worldwide network of 1,102 theaters, and with 442 total installs in the backlog, IMAX should have no problem continuing that trend for years to come.
Looking ahead, the company has plenty of blockbuster movies slated for release over the next 18 months that include Guardians of the Galaxy Vol. 2, Spider-Man Homecoming, and two new Star Wars movies. That tells me the company is well positioned for strong top-line growth and margin expansion from here.
With shares trading for around 24 times next year's earnings, I think IMAX stock is one any growth investor should consider buying.
A pipeline filled with growth potential
Matt DiLallo: Canadian energy infrastructure giant TransCanada (NYSE:TRP) might not seem like a growth stock, but it has delivered a 14% average annual return since 2000. The company is actually on pace to accelerate its growth rate through the rest of the decade, fueled by the roughly $25 billion in projects in has under development. These projects are expected to enable the company to grow its dividend by 8% to 10% per year through 2020, which is better than the 7% growth rate it has delivered since 2000.
TransCanada has an industry-leading near-term capital program driven by natural gas pipeline projects across North America as well as oil pipeline projects in Canada and Texas and two power-generation projects in Canada. These projects provide the company with the confidence that it can meet its ambitious dividend growth target.
In addition to visible near-term growth, TransCanada has an enormous backlog of long-term projects to fuel growth over the next decade. Overall, the company has roughly $45 billion of commercially secured projects, backed by four transformational pipeline projects.
If the company builds all of the projects in its pipeline, which admittedly is a big "if," it would more than double in size over the next decade. That's tremendous growth potential investors shouldn't overlook.
Flying high in the second half
Steve Symington: Call me crazy, but I think investors with an appetite for risk could do well to pick up the beaten-down shares of action camera specialist GoPro (NASDAQ:GPRO) this month. That's not to say GoPro is technically growing right now; last week, the company announced that second-quarter revenue declined 47.4% year over year, to $220.8 million, which translated to an adjusted net loss of $0.52 per share.
But Wall Street was even more pessimistic going into GoPro's report, with consensus estimates calling for a wider loss of $0.58 per share on revenue of just $194.3 million. What's more, GoPro saw sell-through increase 10% sequentially from Q1 as it outpaced sell-in by more than 50% for the second straight quarter. This helped bring inventories in line ahead of what GoPro founder and CEO Nick Woodman predicted would be the "largest introduction of products in our history" -- a reference to the impending launches of GoPro's new HERO5 camera line and Karma quadcopter; the company confirmed both are still on track to arrive in time for the lucrative holiday season.
If all goes well with these launches, then, GoPro should be able to return to profitability by the end of the year. I think investors who pick up shares before that happens could be handsomely rewarded.