Growth stocks often trade around their all-time highs. For instance, Shopify (NYSE:SHOP) has been an expensive stock for years. And yet Shopify's stock seems to routinely double every year. Such an obvious winner is rarely cheap. 

Nonetheless, if you can find a wonderful growth stock at value prices, that's the best of all worlds. Here are two stocks that are cheap right now, and have a terrific runway for growth ahead of them.

Up arrow and rising bar graph with 2020 logo

Image source: Getty Images.

It's a great time to buy the Square of Brazil

StoneCo (NASDAQ:STNE) has unbelievably good numbers. The company has 66% profit margins and is growing revenues, with the most recent quarter's numbers up 33% year over year even during the COVID-19 outbreak. And yet the stock is cheap, compared to similar high-growth companies.

In my mind, StoneCo is very similar to Square (NYSE:SQ), the fintech superstar in the U.S. Like Square, StoneCo is using technology to create a whole ecosystem of start-up retail entrepreneurs. The big difference is that StoneCo is doing this in Brazil rather than in the U.S. But the subscription model is the same, and both companies are creating powerful networks that will be very valuable in the future.

Company Profit Margin Quarterly Revenue Growth (Year Over Year) P/E (Trailing)
StoneCo 66% 33% 74
Square 6% 44% 158

Numbers from Yahoo Finance.

Eventually, both StoneCo and Square will morph into super-banks that will be much stronger than any traditional banking operation. Imagine how easy it is to loan money when you have extensive financial data on the customer seeking the loan. No more relying on a woefully inadequate credit report. Both StoneCo and Square know exactly how well its individual customer's business is growing (or not growing). This information is incredibly valuable. Ordinary banks will be at a severe disadvantage.

Of course Brazil is a foreign market, and so in many ways Square is a much safer investment than StoneCo. Emerging markets are inherently risky. But Berkshire Hathaway (NYSE:BRK-B) was right to invest in StoneCo early in the company's journey. It was a calculated risk and a brilliant move, one that paid off big in 2019.

It's not too late to buy shares. Right now, because of COVID-19 and the worldwide lockdown, StoneCo is negative for the year, despite the incredible growth opportunity. Risk-tolerant investors might want to buy at these prices. When Brazil's economy gets back to normal, StoneCo will zoom higher.

Here's some amazing science that's super-cheap right now

In the family portfolios that I manage, we hold 40 stocks. And the worst performer out of those 40 companies? That would be bluebird bio (NASDAQ:BLUE). Yes, it's done worse than Amarin (NASDAQ:AMRN), a company that had its intellectual property (and only drug) declared invalid by a judge.

We are down 70% on our bluebird bio investment. I still think I'm right on the science, and the opportunity. Our mistake was that (stop me if you've heard this one before) we paid too much for our shares.  

We paid $201 a share in 2018. Our bluebird bio shares are now trading for under $60. And yet the company is seeing some remarkable good news right now. Its drug for sickle cell disease is working beautifully. Sickle cell patients are seeing a 99.5% reduction in life-threatening events. This is amazing stuff. This is why we invest in biotech stocks, after all. And yet the stock is still down 31% for the year.

One of the tricky issues with gene therapies is that a small percentage of people have the disease. It's estimated that 70,000 to 100,000 Americans have sickle cell. It's actually the most common inherited blood disorder. But that's not a lot of people.

So in order for bluebird bio to make a return on its investment, the price tag for the cure is going to be high. That opens the door to big issues over health insurance. This drug is not something that people can pay for out of pocket. And the high price tag means that gene therapy stocks might have limited upside.

bluebird bio outlined this danger in its annual report: "We have proposed novel payment models, including outcomes-based arrangements with payments over time, to assist with realizing the value and sharing the risk of a potential one-time treatment, such as our LentiGlobin product candidate." 

In other words, it's not enough that bluebird bio fixes the defective gene and cures patients with sickle cell. The company has to figure out a new way to get paid for this treatment. Typically the most valuable drugs have to be used over and over again. How do you price a drug that is used once, and cures an awful disease?

Nonetheless, it's an exciting time to be a bluebird bio investor. Right now the market is obsessed with COVID-19, and the vaccine race. Novavax (NASDAQ:NVAX) has been my big winner for the year. It's up 1,900% year to date, and has a lot further to run, I think. But at some point over the next week or two, I'll go ahead and take some profits. And bluebird bio will be one of the stocks I will buy (again).