Looking for large growth stocks to add to your 401 (k) or Roth IRA? Building retirement wealth requires a long-term view and growth priority. Obviously, we cannot predict the future, especially after the next few years – but we can invest in new leaders in technological trends that will shape economic and social transformations over the next decade.
The three stocks covered below have established themselves as leaders in the target markets with which they are all closely linked disruptive technological evolution who have a few more years to work, and everyone is building economic trench this will prevent them from deteriorating rapidly due to competition.
A word of caution – these stocks are best suited for growth portfolios designed to withstand some volatility. That comes with the territory of building pension wealth. If you are retired or nearing retirement, you should ensure that these stocks are not too volatile to meet your investment goals.
Square (NYSE: SQ) is fintech leader it first caught the attention of investors as a hardware and software solution that enabled small businesses to efficiently accept card payments. The company has since established itself in the world of consumer finance with the Cash app, which provides payment, transfer, banking and investment services.
The cash app swelled to more than 35 million users, partly driven by the demand for efficient methods to buy cryptocurrencies and stocks. That catalyst supported Square’s performance, while small business revenue suffered a pandemic. The company has a large number of customers in the food, beverage, catering and entertainment industries that were deeply disrupted last year, to the detriment of the Square’s top. The Cash app remains a strong driver of growth, but the economic recovery will also be a strong wind for Square’s business to business.
Square has returned more than 1,700% to shareholders over the past five years and has been constrained by a very strong 2020. Investors should not expect this kind of appreciation to continue, but growth is still in the forecast. Last year, sales increased by 102%, in part due to the large square footage Bitcoin purchase, which has risen in value.
The company has maneuvered to take advantage of a wide range of monetary fintech trends and is likely to be a leader in the next few years. Analysts predict growth of 50% in 2021 and 20% in 2022, so stocks have a good chance of quickly growing into their aggressive assessment. It’s the perfect narrative for long-term wealth creation.
Lam Research (NASDAQ: LRCX) is a company under the radar that supplies many popular technology companies that hinder development. Lam provides machines and support services that are key to the design and manufacture of microchips. Data centers, cloud computing, artificial intelligence, 5G networks and other popular technological trends stimulate demand for semiconductor manufacturing and design. Semiconductor supplies are notoriously cyclical, and the technology replacement cycle means that chipmakers are constantly forced to invest in research and development to maintain market share. That’s great news for Lama shareholders.
Investors should recognize that Lam is still cyclical – chipmakers are investing heavily in facility upgrades, but that will eventually subside. However, the proliferation of electronic devices should catalyze the demand for semiconductor manufacturing equipment. Further, Lam has significant ongoing service revenue that should increase sales when the hardware segment falters. Investors can still buy shares cheaply front P / E ratio of 20, although it has strong growth prospects. Over a longer time horizon, you will be able to endure some business cycles here and take advantage of the opportunity for long-term growth.
Veeva Systems (NYSE: VEEV) is the largest cloud software vendor for life sciences industry. These services include customer relationship management (CRM), data management and analytics. Company clients include biotechnology, pharmaceutical and diagnostic companies, as well as research organizations. Unlike other CRM or analytics vendors, Veeva is optimized for the life sciences, making it an important part of drug development and clinical trial processes.
Veeva has nearly 1,000 customers in the industry, which is projected to grow by around 7% -8% over the next five years. The analytical part of this market is particularly interesting because research and development with technology is more efficient than previous laboratory research. This boosted Veeva’s revenue growth of 33% during the full fiscal year ended in January. Most of that revenue is made up of subscription subscriptions, which is excellent from a corporate efficiency standpoint. Customer retention indicators are also excellent. This is an important signal for lower-than-average customer costs and a wide economic ditch to reject competition. Both are very bullish signals for long-term investor growth.
Analysts are looking for medium-term annual growth of 20% with a stable profit margin. Investors need to pay a premium to buy Veeve shares, which trade at a forward P / E ratio of 75. That wouldn’t look great for risk-averse investors with short time horizons, but this is still a great opportunity for investors building retirement wealth. Consider this established player at the intersection of clouds and life sciences for your retirement account.
This article presents the opinion of a writer who may not agree with the “official” position of the Motley Fool premium advisory service recommendation. We are colorful! Rethinking the thesis of investing – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier and richer.