Choosing the right stocks for your portfolio takes time, patience, and effort. You need to understand and identify your investment goals as well as life goals. While the plans you have for retirement, for example, might change with time, you need to have an idea of why you're investing and what you want to invest in.
You should understand the level of risk you're comfortable with and choose companies you know well and are willing to hold for at least five years in your portfolio. You should also make sure you're putting cash into quality businesses that have durable competitive advantages and compelling financials, or a path to stable financial growth.
If you're looking for explosive growth stocks to buy now and hold for the long run, here are two companies to scoop up as 2024 begins.
1. Apple
Apple (AAPL -0.35%) is a name that needs no introduction, and while growth rates may not be what they were several years ago given the ongoing changes in discretionary consumer spending, this is a business that continues to pack a powerful punch in a wide range of market environments. Not only does the company control an incredible 25% share of the smartphone market -- more than any other competitor -- but it also just reported another quarter of record business milestones.
As of Apple's fiscal 2024 first quarter, ended Dec. 30, 2023, it had more than 2.2 billion active devices installed for customers worldwide. That figure represented a new record for the business. Apple's net sales and profits in the first quarter were driven primarily by iPhone sales and a new sales milestone in the company's services segment.
While Apple is known for its hardware devices -- the latest addition being its just-launched Vision Pro headset that runs for a cool $3,500 -- the company's subscription-based services division is slowly but surely accounting for more and more of its overall growth. That segment includes products like Apple Music, Apple TV+, Apple News+, Apple Fitness+, app purchases from the iTunes store, and advertising revenue.
In the first quarter of fiscal 2024, Apple reported net sales of about $120 billion, up 2% from one year ago, and net income of $34 billion, a 13% year-over-year bump. Of that net sales total, $70 billion came from iPhone sales while $23 billion was attributable to its services segment. In other words, those two segments combined comprised more than three-quarters of Apple's net sales in the three-month period.
Apple also reported earnings per share (EPS) of $2.18, up 16% from one year ago and a new company record. Plus, the company has been an extremely reliable dividend payer through the years. Despite the stock having a yield of 1%, Apple has raised its payout by approximately 120% over the past decade.
Apple's dominance of the smartphone market, its broad collection of other market-leading hardware products, and continued adoption of its asset-light subscription-based services are enabling robust performance on both the top and bottom lines. If you're looking for a stock to buy, hold, and keep adding to through the years, Apple seems like a no-brainer contender for your buy list.
2. MercadoLibre
MercadoLibre (MELI 3.09%) may not be as familiar to some investors as companies like Amazon, Shopify, or Etsy. However, this e-commerce giant has an impressive lineup of businesses and the balance sheet to match. The company is the largest e-commerce entity and most visited online marketplace in Latin America. MercadoLibre's online platform habitually receives about half a billion visitors per month, and accounts for more than one-fifth of all retail sales that occur in region.
The Latin American e-commerce market has historically been very underpenetrated, primarily due to varying degrees of technological connectivity throughout the region and troublesome logistics options. However, the region is quickly catching up to the advent of e-commerce.
The total addressable market opportunity is booming as adoption of online retail explodes and cross-border sales rise from merchants in the region. For example, one Morgan Stanley study estimated that the Latin American e-commerce market would hit a valuation of $200 billion by 2025.
MercadoLibre doesn't just operate the region's top e-commerce platform. Other businesses include a leading fintech platform with a variety of offerings including credit card and consumer loan products, its own logistics network, advertising services, and more. Mercado Pago, its payment processing platform, generates almost as payment volume offline as it does online.
Years ago, MercadoLibre recognized that in a heavily cash-based society, plenty of merchants in brick-and-mortar stores needed a more optimized way to process payments for customers. The company launched mobile point-of-sale (POS) devices nearly a decade ago, and business has exploded since that time.
In the most recent quarter, MercadoLibre reported gross merchandise volume of more than $11 billion, a 60% increase from the year prior. Net revenue for the three-month period totaled just shy of $4 billion, a 70% surge from one year ago. The company's credit portfolio increased 23% year over year to $3.4 billion.
Meanwhile, online total payment volume totaled $47 billion, while offline total payment volume hit $35 billion. Those two figures represented year-over-year hikes of 121% and 145%, respectively. These numbers are phenomenal in any market environment, particularly one where economic conditions are strained globally.
Importantly, MercadoLibre is gaining more and more control over the entire customer journey from purchase to delivery, with its logistics network handling 94.2% of deliveries in the third quarter of 2023. The shares are up 50% from a year ago, but it's not too late for investors who wish to benefit from its long-term potential.
