Quantcast

Daily Traders Edge

Here Are 3 Growth Stocks That’ll Make You Richer In Q2

April 08
10:09 2021

Over the long run, value stocks have outperformed growth stocks on an annualized basis. But since the end of the Great Recession, the roles have reversed. Historically low lending rates and a highly accommodative Federal Reserve have rolled out the red carpet for fast-growing companies looking to borrow at extremely cheap rates. These low lending rates are encouraging growth stocks to hire, acquire, and innovate.

Even with the U.S. economy bouncing back from its worst recession in decades, the nation’s central bank has stated its intent on several occasions to keep lending rates at or near historic lows. That’s an open invitation for growth stocks to keep chugging higher.

As we move headlong into the second quarter, the following three growth stocks stand out for having all the tools needed to make investors a lot richer.

Zoom Video Communications

One of the easiest ways to build wealth over time is to buy into businesses that hold significant market share in fast-growing trends. That’s why web-conferencing giant Zoom Video Communications (NASDAQ:ZM) gets the nod.

To state the obvious, Zoom was arguably the biggest winner of the coronavirus pandemic. With most traditional workplaces disrupted by the pandemic, businesses big and small turned to Zoom’s conferencing platform to stay in touch and keep projects moving. Zoom ended the year with 467,100 clients that had at least 10 employees, which was a 470% increase from where it finished 2019. Not shockingly, total sales for the company more than quadrupled to $2.65 billion.

The big question is, “What about after the pandemic ends?” While it’s highly unlikely we’ll see 326% year-over-year sales growth again, Zoom has established itself as the go-to destination for web conferencing. As of one year ago, it held a nearly 43% share of the U.S. web conferencing market. Considering the value web conferencing has added to the workplace, it’s doubtful that we’ll see businesses abandon Zoom once things return to normal.

If you need an added reason to feel confident about Zoom, consider that founder and CEO Eric Yuan owns a healthy percentage of his company’s outstanding shares. Even after transferring approximately 18 million shares in March to unspecified beneficiaries, Yuan still directly owns more than 25 million shares. When a founder with a large vested interest in their company sticks around, good things tend to happen for shareholders.

Continue Reading at The Motley Fool

Related Articles

Newsletter Signup

Sign up for our free newsletter