2020 is wrapping up and with it hopefully the end of a very volatile period. There is much to look forward to for investors, even if economic uncertainty is still present. We are indeed a long way from the sudden crash of March.
A smart investor could take the opportunities available now to see where the best money managers are allocating their capital. Growth stocks seem to be a highly attractive option to these investors — more so than dividend stocks or other kinds. We’ve listed four such stocks for you to consider.
Growth Stocks Backed by Billionaires
Growth stocks provide investors with the chance to obtain a considerable profit. These are suitable investments for those looking to maximize their returns with an aggressive investment strategy. However, investors should carry out quality stock research before investing in them.
1. Innovative Industrial Properties, Inc. (NASDAQ:IIPR)
The cannabis industry is a hot sector in the market right now. Legalization and stay at home orders benefit it immensely, and it seems like more US states will support recreational use. Multiple large funds have purchased huge volumes of the real estate investment trust that is Innovative Industrial Properties.
In February 2020, BlackRock disclosed a 15.5% stake in the company, or about 1.3 million shares. By the third-quarter, this had become 3.56 million shares. Other billion-dollar institutions are also involved.
The company’s strong presence in the US makes it an attractive buy for investors looking to gain a foothold in the sector. Innovative Industrial Properties has also made a lot of new acquisitions, which bodes well for an industry set to grow. With an increasing number of cannabis businesses arriving, this REIT stands strong as a potential market leader.
- In 2020, the company has established long-term real estate usage agreements and purchased new properties.
- The stock is up by over 100% YTD in 2020, largely because of increased cannabis consumption.
- The third quarterly report for 2020 recorded sales of $34 million, beating analyst projections by 16%.
2. Snowflake Inc. (NASDAQ:SNOW)
Snowflake has been talked about extensively since its IPO in September. The stock doubled in value in the day following its listing, and billionaires seem to think there’s more growth possible. Investors include Berkshire Hathaway, which bought over 6 million shares.
Snowflake’s competitive advantages, that come via its innovative products put it in a good position for a growing sector. Cloud-based companies have tremendous growth opportunities, hence the arrival of billionaire investors. It may be a young company, but it is well worth keeping an eye on.
- The company’s valuation jumped from $33 billion to $88 in just ten minutes.
- It has over 56 customers that contribute over $1 million in revenue.
- Product revenue run rate stands at over $500 million.
3. Datadog, Inc. (NASDAQ:DDOG)
Datadog is a system monitoring company that provides a SaaS data analytics platform. Several major investors, including BlackRock, have invested a lot into the company — with BlackRock purchasing 3 million shares. Investors clearly see growth in the stock, given the large purchases.
It is also among the fastest-growing companies and a member of Deloitte’s 2016 Fast 500 List. The company’s services and updates also match that growth, with it supporting multiple cloud service providers. The pandemic has helped contribute to the use of cloud-based services, and Datadog has benefited dramatically.
- Third-quarter revenue grew 61% year-over-year to $155 million, according to the Q3 2020 report.
- The company added eight new products in Q3 2020.
- Datadog also revealed that over 1,100 customers with an ARR of over $100,000.
4. Pinterest, Inc. (NASDAQ:PINS)
Pinterest is in a challenging space — social media — but investors seem to think there’s growth potential in it. Melvin Capital increased its holding in the company by 173%, while others too purchased a considerable amount. The amount of funds flowing in indicates that big money managers see growth in Pinterest.
Pinterest’s monthly active users has also been growing over the course of 2020, reaching 442 million in Q3 2020. This is over 100 million from the same time last year.
- Q3 revenue grew 58% year-over-year to $443 million, according to the Q3 2020 report.
- Global Monthly Active Users (MAUs) grew 37% year-over-year.
- Pinterest posted a net loss of $94 million, 21% of its revenue.
Conclusion
Growth stocks are good investment choices for those looking to gain high growth in a reasonable amount of time. As for the stocks listed here, investors seem to find value in them. They have shown that they have potential, so it’s worth monitoring going forward.
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What do you think of the stocks listed here? Do you believe they have the potential for high growth? Let us know what you think in the comments below.
Disclosure: Tim Fries has no positions in any of the stocks mentioned, and has no plans to initiate any positions within the 72 hours following the publishing of this article. This article expresses the opinions of Tim Fries. Tokenist Media LLC has no position in any of the stocks mentioned, and does not plan to initiate any positions within 72 hours of the publishing of this article. Please consult our website policy for more information.
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