At some point, we knew that the investment markets and the underlying economy would rise from the mess that the novel coronavirus created. Honestly, I just didn’t think it would happen so soon. Since hitting a sharp bottom in March of this year, the major indices have been on a wild ride. As optimism kicks in, so has sentiment for growth stocks to buy.
Nevertheless, while the environment has significantly improved from the doldrums, I believe investors should be careful. For one thing, the much-discussed May jobs report wasn’t as great as some folks — mainly conservatives — would have you believe. Yes, the economy adding 2.5 million jobs is much better than losing them. Unfortunately, the May recovery left out Black and Asian workers in the cold, who saw their unemployment rates rise.
Amid this backdrop, you have raging protests calling for social equity and justice. Significantly, this is no longer an American phenomenon, with similar rallies sparking in western Europe. Recently, the “Black Lives Matter” movement reached Japan of all places. But in an unintuitive manner, this global unrest bodes well for certain growth stocks to buy.
For instance, Chinese companies aren’t exactly popular investment vehicles, with Luckin Coffee’s (NASDAQ:LK) recent accounting fraud scandal imbuing a lack of faith in other such investments. But China’s severe governmental policies usually cracks down on dissent harshly. I’m not saying that’s a positive by any means. However, if you’re looking for relatively stable growth stocks, you might consider such draconian markets.
Furthermore, the coronavirus sparked other geopolitical conflicts, namely the oil price war between Saudi Arabia and Russia. Although this was a tit-for-tat situation between two foreign countries, their rift negatively impacted our economy. Moving forward, industries that help us attain true energy independence may see significant demand.
A such, I’m looking at these nine growth stocks that are especially relevant to our new normal:
- B2Gold (NYSEAMERICAN:BTG)
- Nio (NYSE:NIO)
- Plug Power (NASDAQ:PLUG)
- iQiyi (NASDAQ:IQ)
- Smith & Wesson Brands (NASDAQ:SWBI)
- SunPower (NASDAQ:SPWR)
- American Battery Metals (OTCMKTS:ABML)
- Canopy Growth (NYSE:CGC)
- Champignon Brands (OTCMKTS:SHRMF)
Keep in mind that it’s still a wild arena out there. Thus, I’d take a measured approach, buying into these growth stocks steadily but keep the powder keg dry for potential discounts down the line.
Growth Stocks to Buy: B2Gold (BTG)
If you’re worried about economic stability — and I believe you should be — buying gold bullion has been a time-honored tradition. However, physical bullion has its limitations; namely, the inconvenience and security factor. If you’re not the type to build underground bunkers but still want a hedge against uncertainty, you should look into B2Gold.
A low-cost international senior gold producer, what will truly attract mainstream investors to BTG stock is that it’s unlike many other growth stocks in the precious metals sector. Fundamentally, B2Gold provides the confidence of a strong balance sheet, along with robust profitability and revenue growth metrics. Plus, the company’s portfolio offers a healthy mix of producing, developing and exploratory projects.
But in my opinion, the best reason to consider BTG stock is that the underlying asset addresses the three biggest concerns we have today: economic stability, health risks and social unrest. Any one of these factors going awry could skyrocket shares. And it’s possible that all three could go wrong at the same time.
Nio (NIO)
Over the years, I’ve been critical of Nio. Although electric vehicle technology is admittedly very exciting and forward thinking, I questioned how Nio stock would do given the lack of infrastructure in its native Chinese market. In 2017, approximately two-thirds of occupied housing units in the U.S. had a garage or carport. That still leaves a significant one-third of Americans lacking an easy means of charging their EVs.
Because China didn’t “grow up” with a car culture, many of their homes lack accommodating architecture. However, the country is rapidly expanding its EV charging infrastructure, which is a positive for Nio stock.
But the biggest reason why I see Nio as one of the growth stocks with huge potential is that EVs have fewer parts compared to traditional combustion-engine vehicles. Suddenly, Nio is very relevant, posing a direct challenge to the automotive hierarchy. Theoretically, the company can start pumping out EVs, expanding its reach to other markets.
Plus, with Tesla (NASDAQ:TSLA) priced into the stratosphere, Nio provides a much cheaper opportunity among high-potential growth stocks.
Plug Power (PLUG)
Another company that I didn’t put much faith in, Plug Power has suddenly become a very compelling organization amid the Covid-19 pandemic. When the Saudis loosened the spigot to their vast oil riches, they did so primarily to teach the Russians a lesson. But both these nations were incentivized somewhat to continue hurting each other. By doing so, they would collectively hurt the U.S. more.
And this made me realize why PLUG stock is so important. The underlying business — the production of hydrogen fuel cell systems — is a vital cog toward true energy independence.
Of course, I don’t know if hydrogen fuel cells will become the dominant alternative energy platform. What I do know is that the old paradigm of dependence on fossil fuel still leaves us vulnerable. With massive supply in the hands of adversarial nations, they could make life difficult for us.
Beyond that, PLUG stock has its own catalysts, such as fuel cell design in motive sectors such as forklifts. Despite Plug Power being one of the riskier growth stocks, I’d keep close tabs on it.
iQiyi (IQ)
Prior to the pandemic, many investors bought iQiyi under the thesis that it’s the “Netflix of China.” I know this argument is much more nuanced, but that’s the gist of it. However, the glaring contradiction is that while Netflix (NASDAQ:NFLX) has soared to unbelievable heights, IQ stock remains mired in the doldrums.
Still, that might make iQiyi one of the more appealing growth stocks to buy. Frankly, I’m not sure how much more room that Netflix has. Don’t get me wrong — I believe NFLX has a long-term pathway for success. But if you’re looking for a “2x” name, you’re going to need to dial up the speculation factor. And IQ stock has the right amount of speculative energy and credibility.
First, iQiyi’s brand name surely got a boost during the quarantines, even if it didn’t help IQ stock. More importantly, the geopolitical tensions between the U.S. and China might incentivize Chinese consumers to look domestically for their entertainment.
I know that I wouldn’t support the economy of a country that hates me if I could reasonably help it.
Smith & Wesson Brands (SWBI)
Previously, Smith & Wesson Brands had an innocuous name, American Outdoor Brands. But with management’s decision to split the firearms business from the outdoor products business, the iconic bad boy name reemerged. This time, I don’t think Smith & Wesson will get any flack for its controversial image. Indeed, SWBI stock is perhaps the most relevant of growth stocks today.
Obviously, I’m saying this because of the brewing unrest that has created deep racial divisions in the U.S. Honestly, I think most Americans are sympathetic to the general calls of social equity, particularly in terms of law enforcement encounters. However, defunding the police is just something that’s not going to fly with most people. I don’t care how anyone dresses up this ideology — it’s flat-out ridiculous.
It also raises the question: who are we going to call when someone tries to break in our door? I don’t know about you, but without the police, I’ll feel very comfortable if I got a hold of Mr. Smith and Mr. Wesson. If I can’t reach them, I’ll gladly take Mr. Colt, Mr. Springfield, Mr. Remington, Mr. Mossberg or Mr. Kalashnikov.
But if you just want huge profitability potential, you better dial up some SWBI stock.
SunPower (SPWR)
As with the other alternative energy related growth stocks to buy, I haven’t been the biggest fan of solar energy. From both a scientific and economic perspective, I questioned the industry’s effectiveness and efficiency. However, with the paradigm shift of the coronavirus, I’ve come to realize that all alternative energy sources help us toward true energy independence; hence, my inclusion of SunPower on this list.
What makes SPWR stock stand out is that according to the underlying company’s website, SunPower is the only home solar and energy storage solution that’s designed by a single entity. This is significant for homeowners because it allows them to save energy for critical appliances during an emergency. Also, SunPower’s comprehensive setup gives clients greater control over time-of-use rates.
However, it’s fair to point out that SPWR stock isn’t without significant risks. Most notably, if the economy tanks, then I’m not sure how well the home solar energy industry will fare. Of course, if the economy skyrockets, my pensiveness will prevent profitability.
Given the many uncertainties, I’d approach SPWR stock as a hedge. If we get a quicker-than-anticipated recovery, this is a name to own. If not, hopefully you have some exposure to gold!
American Battery Metals (ABML)
Easily one of the most speculative growth stocks to buy on this list, American Battery Metals specializes in lithium mining. Specifically, the company’s Western Nevada Basin Claim covers just over 30,000 acres. Additionally, American Battery has a development plan to produce a next-gen lithium extraction process that could potentially usurp conventional methods.
Obviously, with ABML stock being traded in the over-the-counter markets, you want to approach this investment with healthy skepticism. However, the fundamentals of geopolitical tensions spilling over into our way of life has been a wake-up call for us. Further, we’re in a big race with China regarding technological dominance. As you know, technology nowadays doesn’t go anywhere without lithium.
The more we can depend on our vast resources to feed our innovations, the better. This is the main driver for ABML stock. Also, because this is a true penny stock, if things go right, you can potentially realize explosive returns.
Canopy Growth (CGC)
Once part of a blossoming industry, Canopy Growth, like so many other cannabis-based companies, suffered deeply when the hype train derailed. It’s not that the sector lost its relevance. Rather, the green market moved too far, too fast. Also, most entities eschewed stability for aggressive expansion, costing them dearly.
However, Canopy is learning the lessons from the past. Better yet, following the devastation in March, CGC stock has been steadily moving higher. Granted, it hasn’t been a smooth ride. But the overall trend is positive, giving reasonable confidence for prospective speculators.
Moreover, the pandemic and the subsequent lockdowns have quietly bolstered the case for CGC stock. From a Psychology Today article, “Research studies on both animals and humans have shown that CBD may help lower feelings of isolation, relieve autism symptoms, and reduce the effects of post-traumatic stress disorder (PTSD). It seems CBD can calm the brain and support the hippocampus, which is a brain area important for healthy emotion and memory.”
If that’s the case, you can see why Canopy would attract investors. Therefore, this is one of the growth stocks that, while risky, offers substantial upside potential.
Champignon Brands (SHRMF)
If you want to dial up the risk factor in your alternative health portfolio, Champignon Brands may be the ticket for you. Part of a burgeoning industry levered toward psychedelic-based medicines, Champignon initially strikes you as an illegal venture. It’s not. Rather, the company — and others like it — take the potency of psychedelics and apply it to address various mental health and addiction issues.
What makes SHRMF stock appealing is that the psychedelics market is heavily restricted. Obviously, when you’re dealing with controlled substances, you must comply with strict legal measures and oversight. Not too many organizations are capable of meeting this standard, presenting a high barrier to competition. As an early bird participant, Champignon has the opportunity to cement its brand as this market potentially takes off.
Further, mental health has become a very hot topic during the quarantines. With millions of people suddenly forced to shelter in their homes, many have suffered from the disruption and isolation. People with severe cases may need more help than traditional treatments can provide, supporting the overall narrative for SHRMF stock.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. As of this writing, he is long gold bullion and SHRMF stock.