Growth stock investment remains one of the two most popular forms of investment, with the other being of value stock investing. Abiding to this philosophy, investors tend to pick stocks of companies for their portfolios, which they have ample reason to believe will grow at a pace far higher than that of the wider market. Because such companies are typically focused on growing their revenues and earnings to sustain wider expansion in the market, they do not pay off dividends to their shareholders. As a result, investors of this type are not interested in dividends in order to maximize their investment. Earnings, therefore, are reinvested into the business in a manner that sustains further growth. Some of the most successful investors have built up their fortunes in the form of capital gains that they achieved by timely investments in some of the best growth stocks for 2022.
Those looking to follow a similar path, need not look any further. In this video, we present some of the most promising growth stocks that are ideal to invest in right now and would result in tremendous growth in the upcoming years and even decades.
The first growth stock for 2022 we present for this list is the African telecommunication and fintech company, Airtel Africa, (OTC: AAFRF). The developing world presents the most booming growth opportunity given the transformation of certain regions that have historically been behind on core areas and are fast catching up. Airtel Africa is one such company, which has 14 mobile networks operational across Africa, with Nigeria being its largest market. In addition to running highly lucrative mobile networks, the company also owns one of the most popular mobile payment and digital banking platforms, Airtel Money, with over 26 million users.
Airtel Africa has strategically positioned itself onto the two core growth drivers of Africa in a simultaneous manner, causing its growth potential to be staggering. Both these powerful domains are supported by powerful tailwinds which include a surge in mobile banking across the African continent, as well as rapidly growing data usage and mobile penetration. This is even more impressive considering that Africa lags behind in comparison to other developing regions such as Latin America, and Asia, which gives it catch-up opportunities and a tremendous growth runway.
Based on these factors alone, Airtel Africa is an incredible growth stock to consider. In its most recent quarter, its earnings per share shot up over 30% on a year-on-year basis. Similarly, AAFRF is trading at under 12 times free cash flow with a rising return on capital of over 20%.
Palantir Technologies Inc.
The second stock on our list is Palantir Technologies Inc., (NYSE: PLTR). Palantir is a software company that develops applications that assist in detecting dataset patterns as well as signals intelligence sources. For this reason, the company’s prime clients have been global intelligence agencies, however, this appears to be changing significantly.
The most impressive aspect about Palantir Technologies remains its phenomenal growth, despite the severe macroeconomic headwinds facing tech companies. In its most recent quarter, PLTR recorded year-on-year revenue growth of a stellar 26%. On the surface, this figure alone seems highly compelling, but digging deeper we find much more to marvel at. For instance, revenue from its commercial segment alone, in its recent quarter rose by 46%, which indicates a surge in corporate clients. This boosts the company’s financial sustainability tremendously, as it would no longer rely upon intelligence agencies to a critical degree. Moreover, the number of its customers in the US alone surged by a whopping 250%. For those chasing growth, these metrics are major green flags. They indicate that Palantir is focused on long-term business relations, sure to lead to revenue and earnings boosts in the future.
From all the strong growth indicators, the cherry on top for Palantir is its attractive valuation. Although PLTR is among the Best Growth Stocks For 2022, it is trading at a price 70% below that of 12 months ago. This signals a strong buying opportunity for those looking to enjoy tremendous long-term growth.
Smith & Wesson Brands, Inc.
Number three on our list of high-growth stocks is the weapons company Smith & Wesson Brands Inc., which also goes by SWBI. As far as firearm design, manufacture and sales go, Smith & Wesson is among the top names in the world. Even more impressive is the fact that it has incredible growth prospects, with some strong tailwinds in the short term.
SWBI’s recently reported quarterly results did not prove highly attractive, given that it saw a topline decline of 43% and a bottom-line decline of over 50%. A large part of this poor performance had been due to inventory management problems following the extraordinary demand surge following Covid-19. Now that the company faces a new inventory cycle this quarter, it is on track to continue its stellar growth trajectory. Last year in 2021, SWBI doubled its annual revenue from $529 million to $1.06 billion. With demand levels at an even higher point than last year, this could be further surpassed by next year, which makes it fall among other Best Growth Stocks For 2022.
Similarly, Smith & Wesson is supported by a number of strong tailwinds that further push its growth prospects to new heights. The most significant is that of cooling inflation levels, which many economists strongly anticipate, which would cause a demand surge by customers. Moreover, the US mid-term elections would prove as a major trigger point that may very well catalyze explosive demand for firearms in the US market. The stock is clearly a treasure pot, ready to burst soon.
Next up, we take a look at Pentair PLC, a water solutions company that trades by PNR. Pentair is essentially a flow technology company, with two prime segments that collectively deliver up to $4 billion in annual revenue. Its consumer solutions segment primarily includes swimming pool-related products such as pumps, heaters, and filtration systems. In this B2C segment, Pentair holds a leadership position throughout the North American market. Similarly, its industrial segment lays focuses on products such as membrane filtration, separation systems for factories, as well as bioreactors.
Despite its large scale of operations and robust market position as a leader, Pentair continues to boast high growth in performance. In its June 2022 quarter, the company reported top and bottom line growth of 13% and 16% respectively. Both analyst consensus and the management’s guidance suggest this double-digit growth trend is likely to continue throughout the upcoming years. This is mainly due to strong demand trends in the industry, which Pentair, a market leader with an extremely strong product portfolio is highly able to meet. Its position in the market also allows the company to absorb inflationary pressures and transmit the burden to its consumers. This is all strengthened by a terrific backlog and a highly sustainable business model. Pentair PLC is a star growth stock to consider.
Latham Group Inc.
The final stock on our list of Best Growth Stocks For 2022 is Latham Group Inc., (NASDAQ: SWIM) a swimming pool manufacturer, designer, and marketer. The company’s market scope covers North America, and the Australia and New Zealand zones. One typically does not think of a swimming pool company when exploring high-growth stocks. Latham Group, however, is a clear exception for a number of reasons. For one, the company has defied the conventional B2B norms of the industry, by directly servicing homeowners through an enhanced focus on digital and social media marketing. Similarly, its transition towards a fiberglass swimming pool gives it a tremendous marketing edge, and a high growth runway, given the low adoption rates of this superior pool class.
Latham’s high growth trajectory traces back to 2019 when it acquired Narellan, which was at the time the largest fiberglass pool manufacturer in Australia. Ever since, the company has been dominating the market with its enhanced fiber-glass product offerings, which entail simpler and low-cost installation, and higher quality pools that are far more aesthetically pleasing in nature. Revenue grew by 27% in 2020, and a staggering 57% in 2021. Furthermore, Latham’s business model stands as being highly robust and sustainable, especially when considering its recurring customers that regularly purchase high-margin pool products related to maintenance, design, and other aspects. Given all these core strengths, Latham Group is a great steady riser to pick when seeking growth.
Growth is the ultimate goal for many considering adding stocks to their investment portfolio. With stocks that undertake a climb that is higher than the average market rise, investors can have a sure way to accelerate the value of their portfolios. With the present market conditions about inflation and a wider sense of uncertainty, the need to ensure the growth of one’s wealth is ever more critical. Each of the stocks among Best Growth Stocks For 2022 in this article is highly likely to soar, and are thus great picks for those hunting for growth stocks.