I’m going to let you in on a not-so-well-kept secret about hypergrowth stocks to buy. It’s not a great time to consider growth names of any variety, let alone those geared toward extreme speculation. Don’t misread this, as I’m not trying to scare you into one position or the other. Rather, I am merely point out the facts.
To save the U.S. economy from complete implosion, Washington approved myriad fiscal and monetary stimulus programs. Unfortunately, the Federal Reserve now has the unenviable task of unwinding these excesses. That’s going to require a commitment to aggressively hawkish monetary policy, something the Fed sees little issue with. With borrowing costs set to rise significantly, this narrative does not bode well for hypergrowth stocks to buy.
At the same time, if you are going to take a risk, you might as well do so well. In fact, the hypergrowth stocks to buy below may be some of the best.
|NESRF||Northern Star Resources||$5.10|
Sirius XM (SIRI)
Sirius XM (NASDAQ:SIRI) is one of the top candidates for hypergrowth stocks to buy. Primarily, it features a contrarian fundamental narrative along with surprisingly solid financials for a security priced below $10.
As you probably know, Sirius XM provides satellite radio and online radio services. Symbolizing a mainstay of the typical morning commute in America, SIRI lost relevance following the coronavirus pandemic. With millions of people suddenly working from home, no compelling need existed to turn on the car radio. Currently, many companies attempt to recall their employees, with workers predictably protesting.
However, I see capitulation among the workers. Therefore, the fundamentals longer term support SIRI as one of the hypergrowth stocks to buy. Also, Gurufocus.com labels SIRI modestly undervalued. The company features excellent growth stats relative to the industry, particularly its three-year revenue growth rate of 18.4%. When combined with the broader return to the office, this expansion can potentially skyrocket.
An online marketplace geared for the pet-owner community, Rover (NASDAQ:ROVR) provides a platform which connects pet owners with service providers. These services cover a wide spectrum, including pet sitting, dog boarding and dog walking.
Fundamentally, you might not be able to ask for a better opportunity among hypergrowth stocks to buy. For instance, only the few sectors that offered relevant services succeeded handsomely during the Covid-19 crisis, such as telehealth. Pointedly, the pet and associated products industry represented another pandemic winner. According to the American Pet Products Association, in 2019, all pet-related sales totaled $97.1 billion. In 2020, sales were up to $103.6 billion. By 2021, this tally jumped to $123.6 billion. Again and again, the hard data confirms Americans love their pets. So, ROVR makes for a compelling case among hypergrowth stocks to buy.
Beyond this point, Rover features a surprisingly stout balance sheet. Regarding the point of this article, it also features strong growth relative to the industry, making ROVR a top candidate.
Northern Star Resources (NESRF)
Northern Star Resources (OTCMKTS:NESRF) specializes in gold extraction operations in Western Australia and Alaska. Fundamentally, Northern Star represents a hedge of sorts against the Fed. If the central bank fails to control inflation, you’ll be glad to have some NESRF. Also, the underlying firm features surprisingly strong financials.Against normal circumstances, gold-related investments tend to perform well under inflationary circumstances.
Deflationary circumstances where the dollar rises in purchasing power don’t help the case for hard assets. That said, it’s possible that NESRF can benefit from the fear trade. Certainly, no shortage of fear exists in the market.
With regards to the financials, according to Gurufocus.com, Northern Star’s business is significantly undervalued. In addition, it’s a high-quality business, with the company posted a return on equity of 5.3%, above 80% of its peers. Most importantly under the context of hypergrowth stocks, it’s a fast-rising star. For instance, the company’s three-year free cash flow (FCF) growth rate stands at 50.6%, ranking better than nearly 92% of the competition.
Ammo Inc (POWW)
Ammo Inc (NASDAQ:POWW) may not be everyone’s cup of tea. However, if investors strictly look at POWW as a candidate among hypergrowth stocks to buy, it’s difficult to ignore. The munitions specialist features a relevant business and blistering sales expansion.
On the fundamental side, recent geopolitical flashpoints undergird the importance of security. To that end, Ammo Inc has been busy securing contracts with the Department of Defense. Given that circumstances have only gotten wilder during the new normal, the defense industry will cynically remain relevant. Regarding the financials, POWW essentially trades in penny stock territory. Nevertheless, the underlying firm enjoys positive metrics in key areas. For instance, Ammo features a strong, stable balance sheet, undergirded by a cash-to-debt ratio of nearly 2 times.
Most importantly for this discussion, the munitions specialist features a three-year book growth rate of nearly 69%. In comparison, the industry median is only 5.9%, making POWW a worthy consideration among hypergrowth stocks to buy.
Li Auto (LI)
Based in China, Li Auto (NASDAQ:LI) is one of the top electric vehicle manufacturers. Granted, the economic circumstances in China don’t provide much confidence. Nevertheless, for the speculator, Li Auto provides excellent growth and a relevant and burgeoning industry.
Fundamentally, LI might make the ranks of hypergrowth stocks to buy because of the oft-cited mantra: EVs are the future. As several news publications pointed out, China aggressively competes in the EV sector. Therefore, Li Auto could potentially ride coattails. Moreover, the company may seek to undercut European competitors. This may be an effective tactic if the global economy weakens.
On the financials, Li Auto brings some impressive stats to the table. For instance, the company features a cash-to-debt ratio of 4.7 times. In contrast, the industry’s median metric is only 0.6. Thus, Li can possibly ride out storms better than others. More importantly, LI features sales growth trends that rank in the industry’s upper echelons.
A social media firm, Snap (NYSE:SNAP) carved a name for itself targeting young users with fun and quirky features. One of the hypergrowth stocks to buy immediately following the spring doldrums of 2020, the underlying platform benefitted from forced quarantines and mitigation protocols. However, SNAP became a hypo-growth stock as society gradually normalized.
Still, SNAP could offer another shot as one of the hypergrowth stocks to buy. For one thing, the stock suffered a massive beatdown, incurring a loss of over 77% since the start of 2022. Trading hands for less than $11 at time of writing, this seems like a harsh discount. Remember, the underlying Snapchat app features 347 million daily active users (DAUs). That’s not nothing.
Financially, Snap does not symbolize the bastion of stability. Indeed, Gurufocus.com labels SNAP stock as a possible value trap. However, it does command a massive expansionary profile. For instance, the company’s three-year revenue growth rate stands at 42.7%, better than over 86% of the competition.
CleanSpark (NASDAQ:CLSK) generates some interest for focusing on sustainable operations. Specifically, CleanSpark conducts its mission through low-carbon energy sources like wind, solar, even nuclear and hydropower. Unfortunately, no matter its green initiatives, blockchain-related investments align with cryptocurrency sentiment. And that’s where the vulnerability lies for CLSK stock.
Since the start of this year, shares plunged over 68%. Over the trailing month, CleanSpark lost 29% of equity value, suggesting that there’s still much volatility to be had. With cryptos basically going nowhere over the past week, circumstances don’t look too swell for CLSK.
However, anything can happen in the decentralized ecosystem. Therefore, if you happen to buy CLSK at the right price, it could skyrocket very quickly. You just have to be lucky.
On the financials, I must say that CleanSpark impresses with its robust balance sheet. As well, the company features a blistering growth rate, though that might change in the quarters ahead as cryptos faded. Nevertheless, if you want to swing for the fences, CLSK provides the canvas for wild speculation.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.