Many investors buy securities with stock growth potential in mind. And indeed, for many folks, a well-constructed growth stock portfolio has served them well and provided for a bright financial future. But which stocks have the best growth potential? How does one find the best growth stocks with the immense universe of issues on the market? Let’s examine these questions and look for some names with the possibility for outsized gains going forward.

Factors that Propel Growth Stocks

Stocks with high growth potential often share common characteristics, though they may be in widely different industries. They all have the potential for huge profits and high cash flows, they may have a product line protected by an “economic moat” from other competition, they often capitalize on changing demographic or regulatory trends, and they are multidimensional and can pivot as opportunity evolves. Commonly, these are smaller firms in the early stages of their life cycle.

Some Picks from Motley Fool

A recent article by Brian Stoeffel recently appeared in the Motley Fool highlighting five monster stocks for 2018. Let’s highlight these issues and examine what “The Fool” says about them:

Shopify (SHOP)

Shopify bills itself as an ecommerce platform that has everything needed to sell online, on social media, or in person. It backs this up with over has over 500,000 merchant clients. App developers are flocking to these half-million merchants, which brings even more merchants – and revenue -to Shopify

Paycom (PAYC)

Paycom has demonstrated its ability to evolve, growing beyond payroll services to now provide a large spectrum of human-resource services. Its free cash flow of $62 million indicate the health of this firm

Bitauto (BITA)

This Chinese company originally began as designer of virtual stores for Chinese consumers. It has demonstrated its ability to adapt as it has also become a leading provider of transaction services.

Axon (AAXN)

Axon is the manufacturer of TASERS, the nonlethal stun-guns used world-wide in law enforcement. Thanks to the TASER brand, AAXN is in the catbird’s seat, and its high switching costs keep customers onboard.

Ellie Mae (ELLI)

With zero debt and a number of key acquisitions, this mortgage company has thrived on making the mortgage application and purchase process as seamless as possible.

These are but a few samples of names with the potential for very high growth and large shareholder returns. See if they might fit into your portfolio.

 

GET WEEKLY STOCK HIGHLIGHTS