Growth stocks: fastest-growing stocks 2019

2019.11.25 2019.11.25 Growth stocks: fastest-growing stocks 2019

Oleg Tkachenkohttps://www.litefinance.org/blog/authors/oleg-tkachenko/

TOP 20 growth stocks that skyrocketed in 2019

The crisis of late 2018 hit all the stock markets in the world. But despite the pessimistic forecasts, 2019 was a successful year for many companies. While major tech giants were struggling to regain their positions, some stocks skyrocketed in the first half of the year with a yield of 20-50% to 190%, which clearly exceeds the growth of stock indices. In this review, you will learn which companies investors earned on and what became the growth driver.

Best fast-growing stocks from all the word: ranking, analysis of causes for growth, investment prospects

After the unfortunate year 2018, global stock markets have begun to recover. Fortunately for investors, pessimistic forecasts regarding the onset of recession and the stock bubble bursting never came true. And while there is no clear growing trend, things turned out to be not so bad. Even better for those investors who decided to take a chance and bet on individual companies that had brought them more than 100% profit only in the first 6 months of 2019. Read the review to find out more about these companies.

• Important! This review is not a recommendation for investing. It does not include Facebook, Amazon or Apple stock, because their growth in 2019 is just a correction after the crisis of late 2018. The review provides examples of companies that soared unexpectedly in 2019, bringing investors an average of 20 to 190% yield per annum. But this does not mean that it will happen again.

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TOP 20 stocks of the global market with a yield of up to 190%

Fun fact: the crisis of late 2018 hit giant corporations, which are considered optimal in terms of reliability and prospects, according to renowned analysts. So far, Netflix, Alphabet and Amazon stock have shown inconclusive results in 2019. All these companies are showing a slight increase (and some even a loss compared to the beginning of the year) with unstable quotes and ambiguous prospects for the next 4-6 months. Therefore, the companies included in the recommended investment lists of many analysts were not taken into account.

When making up the ranking, I took the following factors into account:

• Fundamental growth factors. If the sudden surge in price has no logical cause, I disregarded it. A local outburst may be of artificial origin (speculation of a large investor, fake financial results, etc.) and therefore may not be of interest to investors.
• Stable growth. Example: United Heavy Machinery (ticket: OMZ, Russia) showed an increase of 94%, which not only had no logical explanation, but was mostly lost by the end of July due to an equally strong and quick correction. Companies of this type were not included in the list.
• Dividend payments were not taken into account. Only stock exchange price changes were taken into account. It is logical that dividends can increase the return on investment, but it should also be noted that the dividend policy directly affects quotes.

Also, the ranking does not include AMD, Apple, Facebook and other major corporations, which showed a relatively good growth in 2019. They did not skyrocket - they merely recovered as compared to September 2018. The same applies to the stock price of online retail giant Alibaba Group (e-commerce), Lockheed Martin Corporation (aircraft, aerospace engineering), Brown-Forman Corporation (production of alcoholic beverages), etc. All of them showed an increase of 35-50% in 2019 and were classified by popular sources as the fastest-growing. But compared to spring-autumn 2018, this is simply a return to previous levels.

Interesting facts:

• Most of the rating companies are registered in the US and Russia. This is logical: the US is the most dynamically growing market in the world among developed countries, Russia - among developing countries. Trade wars have damaged the Asian market and China and Japan cannot boast of such dynamic growth.
• The most stable growth was shown by companies in the consumer sector, while tech companies, on the contrary, showed a strong correlation of quotations and fundamental factors. The main reasons for the sharp price growth were mergers and acquisitions, financial reports that exceeded forecasts, and dividend policies.

In brackets next to the name of the company you will find their tickets.

1. Avon Products (AVP, UK/Brazil). Beauty products, +191.94%

In the fall of 2018, it became known that Avon was to be sold to Brazil's largest beauty company Natura Cosmetics. This is the only reason that pushed the quotes of the company up. However, in the first half of 2019 the transaction was not completed. And against this background, the seemingly significant increase in quotations in 2019 is actually not so big. If the current share price is about 4 dollars, in May 2013 one share could be bought for 22-23 dollars, and the historical high is more than 44 dollars, as can be seen in the chart.

2. IDGC of Siberia (MRKS, Russia). Energy, +182.16%

The Siberian interregional distribution company brought in about 180% of yield in the first 3 months of 2019, reaching a historic high. The growth stopped there and the quotes even rolled back somewhat, but in general the growth is very impressive. Analysts explain such a significant growth with several factors:

• Omskelectro debt restructuring, which allowed to significantly reduce the company's net debt.
• Planned consolidation of electric grid assets, which will provide a synergy effect.
• Estimated growth in dividend yield and optimistic financial statements.

IDGC of Siberia is a subsidiary of Rosseti PJSC, whose stock should also be included in this ranking. After in May its management proposed a 3-fold increase in tariffs for direct consumers, the shares immediately soared to the highs of 2013 (+77.95%). However, the quotes did not manage to maintain the record by August.

3. Pharmacy Chain 36.6 PJSC (APTK, Russia). Retail sale of beauty and health products and services, +118.87%

In just one day on July 19, the company's shares went up 60%. Analysts explain such significant growth with the arrival of a new investor Altus Capita, which bought almost 30% of the shares. The funds received will be used to cover current expenses, which forms a positive background for the company. Given the unsatisfactory financial results of previous periods, the arrival of a new investor gives hope for a correction, which means that the stock may still have unspent growth potential.

4. PJSC Cherkizovo Group (GCHE, Russia). Production and processing of meat and poultry, +70.57%

In March 2019, stock quotes of one of the largest meat producer in Russia reached a historic high. There were no logical causes for this growth. The event was preceded by news about the group’s intentions to acquire Eurodon turkey producer (owner – VEB.RF), which is all the more strange since the company is bankrupt because of an overdue loan. As of August 1, 2019, Eurodon was declared bankrupt, no purchase transaction was made, but Cherkizovo quotes still did not roll back much. Analysts entertain the possibility that due to the low liquidity of securities, manipulation by interested parties may be taking place.

5. Ferrari NV (RACE, Italy). Car production, +59.84%

By the end of 2018, the company's profit increased by 46% compared to 2017. The financial result and better-than-planned performance are the main reason why the shares were not only able to return to the level of September 2018, but also go higher. However, it is difficult to predict whether growth will continue.

6. First Solar (FSLR, USA). Tech, +57.39%

First Solar produces electronic solar panel modules, provides end-service and disposes of obsolete modules. 2018 was not the best year for the company, but legislation lent a helping hand. In 2020, a law was adopted in the state of California, according to which every new home must be equipped with solar panels. Against this background, in the first half of 2019, the stocks rose by almost 60%. According to the company, all deliveries in 2020, as well as 30% of future deliveries in 2021, have already been bought out (contracts are concluded).

7. Gazprom PJSC (GAZP, Russia). Energy, +49.91%

Compared to the last few years, Gazprom stock made a real breakthrough in 2019. And while it is still far from historical highs, almost 50% in such a short period under severe sanctions is a really good result. The stock rose to a 7-year high after the corporation announced plans to pay 393 billion rubles in dividends, which is a record amount in Russia, twice the amount paid out in 2018 and 1.5 higher than the plans announced in January. The news was unexpected, and the management did not reveal the reason for such a revision of plans. Therefore, it is too early to think about further plans.

8. Lam Research Corporation (LRCX, USA). Tech, +48.77%

Lam Research develops semiconductor processing equipment used in integrated circuits. By the end of 2017, the company's shares reached a historic high, which was again tested in the spring of 2018. Since then, the stock has steadily become cheaper. Since December 2018, the company has grown again, trying to return to the previous level.

9. Starbucks (SBUX, USA). Consumer sector (Coffee shop chain), +48.10%

The #SBUX stock is confidently going up, supported by excellent financial statements. A steadily growing trend has changed to a sharply growing trend in mid-2018, and so far has remained so. The company confidently leads in almost every country in the world. In China (the second largest Starbucks sales market), Luckin Coffee network was opened in 2017, which announced that it managed to outperform Starbucks in terms of growth in 2018, but this did not affect the price of shares of the Chinese competitor.

10. Celgene (CELG, USA). Biotech, +46.46%

Celgene is a biotech company developing drugs for cancer and inflammatory diseases. Biotech and pharmacology are considered the most high-risk sectors. The shares of companies can bring 40% profit in a few days, but they can bring loss of the same magnitude as well. The largest deal in healthcare sector was announced on January 3, 2019: Celgene is to be bought by Bristol-Myers Squibb. This news was enough for Celgene shares to rise 25% in a few days, while BMS shares, on the contrary, fell 12%.

We can also recall that in October 2017, the company lost 30% of the cost instantly due to the expiration of the patent for the flagship drug Revlimid and the failure of clinical trials of the drug for Crohn's disease.

11. Mastercard (MA, USA). International payment system, +44.32%

Mastercard continues to grow amid good financial reports, thus easily overcoming the consequences of the autumn crisis. According to the results of the second quarter of 2019, revenue growth was at 12.2% y-o-y (year-on-year), net profit - 30.5%, number of transactions - 20.5% y-o-y. The quotes continue to update historical highs due to rising consumer spending.

12. Momo (MOMO, China). Tech, +42.01%

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According to Fortune magazine, Momo was named the fastest-growing company in 2019 with $2.14 billion in revenue, a capitalization of 7.4 billion and a net profit of 340 million dollars. According to Refinitiv, it is 7th fastest-growing business among the US and Chinese companies. Momo is a free instant messaging app that works Wi-Fi, 3G and 4G on smartphones and tablets. The main income comes from ad sales, subscription fees for advanced options, and games. You can draw your own conclusions about the prospects and history of the company based on the chart.

13. JD. com (JD, China). E-commerce, +36.69%

Unlike the fleeting crisis in the United States in the fall of 2018, the stagnation of the Chinese stock market continued for almost the entire 2018. Therefore, it is not surprising that in 2019, individual Chinese techn companies were among the leaders in the growth of stock quotes. JD is one of China's largest companies in e-commerce operating based on the B2C model. The main reason for the growth is the profit for the second quarter, which exceeded forecasts, as well as the increase in the number of active client accounts.

14. Experian (EXPN, Ireland). Information services, +33.54%

The company provides information services in data management, financial control, collection of statistics on consumer lending, etc. In 2019, the quotes updated their historic highs due to increased demand for services. The quotation chart is stably flat, and the forecast is positive.

15. Adobe Systems (ADBE, USA). Software development, +32.89%

Compared with the yield on US stock indices and major industry corporations, Adobe stock quotes are looking quite attractive. Over the past 10 years, the company has shown stable growth, only partially showing a decline in September-December 2018. The key to its success is positive financial reporting and an ever-growing demand for their developments. The crisis of late 2018 also affected the corporation, but unlike other giants of the tech industry, the stocks not only recovered, but also went up.

16. Lenzoloto PJSC (LNZL, Russia). Gold mining, +31.09%

Although the record surge occurred in August, the company deserves a place in the ranking. There isn't much news about the company, so any news item becomes an impulse for the movement of the stock. The growth in December 2018 was due to rising gold prices against the backdrop of the stock crisis. Analysts explain the February growth with the open access to a list of candidates for the board of directors. The August surge is nothing more than a speculative movement amid a global rise in gold prices. Analysts note that the company has not made profit since last year and consider the securities of PJSC Lenzoloto overvalued.

17. McDonald’s (MCD, USA). Fast food chain, +19.98%

McDonald’s stock always shows surges. Although they are not especially high, this is probably one of the few assets that every rational investor should have. Slow and sure wins the race. Stable financial growth (growth in revenue and net profit) and expansion of the network are the key to the constant growth of the stock, which in 2019 went up, once again updating the historical high. The corporation almost did not notice the crisis of late 2018 (or that of 2008, for that matter), unlike its competitor KFC.

18. Novatek (NVTK, Russia). Gas industry, +18.76%

One of the largest gas companies in Russia continues to delight its investors. In 2018, the corporation was among the leaders in growth, showing a total yield of about 66%. From January to August, quotes rose from 1,182 to 1,328 rubles. Analysts believe that the growth potential has not yet been exhausted. The company is at a stage when most of the costs of drilling new wells have already been paid and no new projects are to be launched. The operating costs of gas companies are lower compared to oil companies, and therefore Novatek can improve its dividend policy and become even more interesting for investors.

19. PINTEREST (PINS, USA). IT, +15.98%

Of the largest initial public offerings (IPOs) expected in 2019, only three have occurred so far. Slack Technologies (WORK) and Lyft (LYFT) did not skyrocket after entering the world exchanges. Their stocks have fallen by more than 25% since the IPOs. PINTEREST stock, on the contrary, brought investors almost 16% over 4 months.

The company provides a visual platform. It helps to find ideas for various projects online, and is also a creative social network. The company's revenue cash flow amounted to 750 million dollars in 2018. Although PINTEREST is still operating at a loss, investors see potential in the idea of ​​the platform, so it is possible that the surge is still ahead.

20. PepsiCo (PEP, USA). Food industry, +15.08%

The crisis of the fall of 2018 hit the corporation hard, but by the end of the first half of 2019, the stock #PEP not only recovered, but also updated its historic highs due to positive financial results. In the first quarter of 2019, the company's revenue amounted to 12.88 billion dollars against 12.7 billion that it had expected to earn; earning growth per share increased by 6% (to $1); sales were growing due to the expansion of the organic food segment. Also, the quotes were affected by promises to pay $8 billion to shareholders in 2019, including dividends and stock repurchases.

Conclusion. Investors should pay attention to the following:

• Tech companies do not guarantee future growth. One should be careful with investments in Intel, Apple, and Facebook. The forecasts for their development are too optimistic, and if they do not come true, the stock will fall, as it happened with Apple.
• Biotech companies are promising, but remember the example of Theranos, which rigged the results of their tests.
• Stocks of companies in emerging markets that have government support or produce strategic products with constant demand are interesting. Their stocks are undervalued.

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