If you want to make some significant profits in the stock market, investing in growth stocks is the way to go. While dividend stocks can offer recurring income, there's nothing that gets the markets as excited as a company that's continuously finding ways to grow. And those are the types of stocks that can make you rich.
Three top growth stocks to check out today are Adobe (ADBE 0.23%), Planet 13 (PLNH.F +8.22%), and fuboTV (FUBO +0.00%). Their businesses have fared well during the pandemic and each has significant potential over the long term. From cannabis to video streaming to tried-and-true tech, these companies also give investors exposure to a variety of high-growth sectors. And two of these stocks have more than tripled in value during the past year.
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1. Adobe
Tech company Adobe is a consistent high performer, rising more than 430% over the past five years (while the S&P 500 has doubled) and it's averaging a compounded annual growth rate (CAGR) of 39.6%. .When the company released its fourth-quarter results for fiscal 2020 on Dec. 10, 2020, for the period ending Nov. 27, 2020, its sales of $3.4 billion were up 14.4% year over year and operating income of $1.2 billion rose by 25.3%. Its full-year revenue of $12.9 billion grew 15.2% higher than last year's tally of $11.2 billion. However, the size of that growth was down from the previous fiscal year, when sales were up by 23.7%.
But the key takeaway here is that Adobe's business does well whether we find ourselves in the middle of a recession or the economy is in great shape. Its software is essential for many professionals, especially Adobe Photoshop, which is its flagship product, and one that many web developers and graphic artists can't do without. Sales from Photoshop and other popular products, including Illustrator and Acrobat, contribute to the company's digital media segment which in fiscal 2020 generated $8.8 billion in sales and made up 68.5% of its total revenue.
In addition to strong organic growth, there's also the possibility that big investments or acquisitions are in the company's future. The cash-rich business generated $5.3 billion in free cash flow over the trailing 12 months, and if that trend keeps up, it may only be a matter of time before it makes a big move to grow its operations. In each of the past five years, the company has reported free cash of $2 billion or better.
The stock won't suddenly blast off and make you rich in a few months or even a year or two. Over the past 12 months, its shares are up about 33% (the lowest on this list) and have outperformed the S&P 500, which has risen 15% during that period. But the stock makes up for that with long-term stability -- it's a pick you can pretty much buy and forget about.
2. Planet 13
If you're looking for a stock that can generate impressive returns in a much shorter time frame, then Planet 13 may be a more appealing investment. The Las Vegas-based marijuana producer has been enjoying a strong year on the markets, with its shares up 235% in the past 12 months. What's remarkable is that the stock is doing so well even though shutdowns and lockdowns as a result of COVID-19 are negatively affecting travel and hurting the tourist traffic in Nevada. In its most recent update, the Las Vegas Convention and Visitors Authority reported that in November 2020, the city's visitor volume topped 1.5 million -- which is less than half of the 3.3 million visitors that came to the city in February 2020, before the pandemic hit.
Planet 13's SuperStore dispensary is at the center of the company's promising growth. With 112,000 square feet of space, it is a tourist attraction even for people who don't consume cannabis, as the location has restaurants and event space. And so its business needs tourists to reach its full potential.
The good news is that Planet 13 is still doing well amid the pandemic. On Nov. 24, 2020, the company reported sales of $22.8 million for the period ending Sept. 30, 2020, which were up 36.5% year over year. It even managed to post a modest profit of $361,000. It's an improvement from earlier periods when lockdowns kept people at home, even within the state. Over the past three quarters, sales have totaled $50.4 million and are still up 7% from the prior-year period.
Planet 13 is showing a lot of resiliency, and once the tourist numbers in Las Vegas recover, it could become the pot stock to watch. Even though the business has already generated impressive returns over the past year, I believe that Planet 13 is still in its early stages and could get even bigger.
3. fuboTV
Streaming company fuboTV gives investors yet another great option for riches. While the streaming industry may be getting crowded with names like Netflix, Disney, and Comcast all battling for market share, there's still a path for fuboTV to succeed. One way that it differentiates itself is that it focuses on sports, which is what many other streaming services lack (or have limited options in). With fuboTV, users can watch top networks like ABC, FOX, and NBC, and also enjoy many different sporting events on its platform, giving cord-cutters a more comprehensive option than a streaming service like Netflix which only offers on-demand movies and TV shows. Some of the sports channels fuboTV offers include Fight Network, MLB Network, NHL Network, and ESPN.
But streaming is just one attractive part of its business. Earlier this month, the company announced it would be acquiring Vigtory, a gaming and sports betting company. In the press release, fuboTV also said it will launch a sportsbook of its own and that it plans "to develop a frictionless betting experience for fubo's customers."
On Jan. 5, the company released preliminary numbers for the fourth quarter (which ended on Dec. 31, 2020) and said that it expects its revenue numbers to come in as high as $98 million, which would be a year-over-year increase of 84%. Previously, fuboTV was forecasting up to $85 million in sales for the period. Its paid subscriber numbers at the end of 2020 also topped 545,000. This is up 72% from a year ago and also well ahead of the 500,000 to 510,000 subscribers that fuboTV was previously forecasting.
With some impressive growth numbers and still many opportunities ahead for fuboTV in both streaming and sports betting, this is a stock that could become a hot buy and make you rich. Its shares are already up more than 454% in just the past year.
