A Step-by-Step Guide to Picking the Best Growth Stocks

And how to avoid the trap of “story growth stocks”

Todd Lincoln, MBA
Investor’s Handbook

--

Photo by SpaceX on Unsplash

Growth stocks are having a moment right now, especially megacap growth stocks. Let’s explore how to find the best long-term growth stocks by unpacking these questions:

  1. What are growth stocks?
  2. What should you know about investing in growth stocks?
  3. Which growth stocks perform best?
  4. How do you find the best growth stocks to buy? (A step-by-step guide)

Let’s begin by getting a basic understand of what exactly is a “growth stock” and why do investors buy them?

What Are Growth Stocks?

In general, growth stocks are companies that are expected to have unusually high growth in their future sales and/or earnings.

Investors who buy growth stocks often believe the company will deliver strong financial results far into the future as it finds an ever-expanding market for its products.

There are several key metrics that growth investors look for (which we’ll cover in detail below), but the bottom line is that growth investors seek out companies that have a long runway for fast sales and earnings expansion.

--

--

Todd Lincoln, MBA
Investor’s Handbook

Stock-market investor, battle-scarred entrepreneur, and fireside philosopher. Creator of Investor’s Handbook: https://medium.com/the-investors-handbook