Finding growth stocks to add to your portfolio usually isn't too much of a challenge. Finding growth stocks you can comfortably buy with plans to stick with them for the long haul, however, is a different story. Flexibility and real longevity are crucial.
With that as the backdrop, here's a closer look at three growth names with plenty of both. Two of them are trading at a bit of a discount at this time.
BYD Company
With nothing more than a look at recent headlines, it would be easy to presume the worst of BYD Company (BYDDY +0.08%). It's still technically the world's biggest manufacturer of electric vehicles (EVs), cranking out 474,175 cars just last month. Rivals like Geely, Chery, and even Xiaomi, however, are coming on strong, taking a bite out of the company's profitability. BYD's shares haven't been typically priced with this much firm competition in mind.
The long-term opportunity is still there though, particularly in China. China's Passenger Car Association reports sales of new-energy vehicles (hybrids as well as battery-only) reached a record-breaking tally of 1.32 million cars just last month, remaining bigger than the country's combustion-powered automobile market. Mordor Intelligence expects China's EV market to grow at an average annualized pace of more than 17% at least through 2030.
But BYD's shrinking profitability? Isn't last quarter's unexpectedly big 33% year-over-year decline in net profits a red flag?
Yes and no. Thinner profit margins are the new norm here. However, with the all-important Chinese EV market now nearly as saturated as it's going to get, the company's bottom line isn't likely to continue worsening. It's apt to grow in step with the company's revenue that's expected to grow more than 21% in the year ahead.
Perhaps more important to interested investors, this new normal is now fully reflected in BYD stock's price by virtue of its 35% pullback from May's peak.
OTC: BYDDY
Key Data Points
Then there's the value that's not reflected in the stock's recently lowered price. That's the fact that it's also developing next-generation EV batteries for other EV manufacturers as well as for itself. As the second-biggest EV battery maker in the world, there's little doubt BYD's got the capacity and know-how to lead that important market as well.
SoFi Technologies
If you're keeping tabs on SoFi Technologies (SOFI 0.07%), then you likely know the stock's been struggling of late. Some of this pullback can be chalked up to selling done by a handful of insiders and major shareholders, although it would be naïve to pretend some of this sell-off wasn't also simple profit-taking following a big rally leading up to the Nov. 11 launch of its cryptocurrency-trading platform.
Then, earlier this month, the $33 billion outfit announced plans to issue $1.5 billion worth of newly minted shares, thus diluting existing shareholders. It's just a lot for the market to digest in a short period of time. None of it is enough to make a point of avoiding a position in this ticker though. In fact, the recent setback is a buying opportunity that growth investors should act on.
NASDAQ: SOFI
Key Data Points
If you're not familiar with it, SoFi Technologies is an online bank, offering everything you'd expect from a bank like checking accounts, credit cards, brokerage services, and more. What makes it relatively unique, however, is that it's only an online bank -- no physical branches.
But it works. The company's revenue grew 38% year over year to $950 million during the three-month stretch ending in September, extending a well-established trend. It's profitable too, reporting $139 million in net income for the same quarter.
This is only the beginning as consumers become increasingly reliant on technology to manage their lives. A recent survey commissioned by the American Bankers Association indicates that 54% of U.S. consumers prefer to handle their banking business via a mobile app, while another 22% utilize a laptop or personal computer to manage their money. Conversely, only 9% opt for an in-branch visit to take care of any banking matters.
Connect the dots. While no shareholders like dilution, SoFi can actually do something quite constructive with money it's raising.
Alphabet
Finally, add Google parent Alphabet (GOOG 2.27%) (GOOGL 2.42%) to your list of brilliant stocks to buy now and hold for the long haul.
There's no denying Alphabet isn't the growth machine it used to be. The search engine market is fully mature and even increasingly competitive. Meanwhile, Google's Android may be starting to lose some of its dominance in the mobile operating system market.
Alphabet isn't just Android and Google anymore, however. It's been working on several other projects that are quickly turning into important profit centers. Its cloud computing arm, for instance, saw its sales grow 33% to nearly $15.2 billion during the third quarter of this year, with $3.6 billion of that being turned into net operating profit.
That's still relatively small compared to its search business, but cloud is most definitely one of the company's unexpectedly impactful growth engines right now.
Image source: Getty Images.
Ditto for YouTube. The video platform generated almost $10.3 billion worth of ad revenue last quarter, up 15% year over year. Moreover, data from television viewership ratings agency Nielsen indicates that YouTube is not only the most-watched streaming platform in the United States but is the only streaming platform to experience any significant growth in the amount of time consumers spent on the platform over the course of the past couple of years.
Perhaps the kicker, however, is the company's recent foray into the advanced chipmaking market. Late last month reports surfaced that Facebook parent Meta Platforms was in talks to purchase billions of dollars' worth of Google's Tensor processors it had initially built to handle its own artificial intelligence workloads. If this is a sign that Alphabet is getting into the AI chipmaking market -- and it very likely is -- the company's got a great shot at winning at least its fair share of a business that Precedence Research believes is set to grow by nearly 30% per year through 2034 when it will be worth more than $900 billion.
The point is, there's still plenty of growth opportunity ahead despite Alphabet's relatively advanced age.
