11 Best Growth Company Stocks To Buy Now

The 11 best growth company stocks to buy now are often characterized by strong sales growth, solid management team, attractive valuations, and a growing market for their products and services. These stocks tend to do well during periods of improving economic conditions and increased consumer spending, and their earnings are expected to grow at a faster pace than the rest of the market.

A growth stock is typically defined as a stock which generates above-average growth rates compared to the rest of the market. Growth stocks generally have a high multiple, as the company’s earnings growth is expected to be faster than that of other companies. However, a growth stock is also riskier compared to value stock, as if the company fails to execute and grow as expected, its stock price can fall quite steeply, as its valuation is already priced for some level of future success. Another characteristic of a growth company is that it generally does not pay dividends, as it has to reinvest profit (or borrow money) to push its growth further, which can require a great deal of capital depending on the business.

abstractdesignlabs/Shutterstock.com

Several hedge funds that we track became optimistic about growth company stocks during the first quarter based on their recent wave of 13F filings. Over the next few pages, we have analyzed the best growth company stocks for investing based on that hedge fund sentiment. That’s what we do at Insider Monkey and our flagship strategy has returned 44.2% since February 2016 vs. a 29.6% gain for the S&P 500 index ETF (SPY). Our most recent stock picks, which were disclosed to our subscribers in the middle of February, beat the market by 5 percentage points in the three months that followed and our latest picks were released in the middle of May. Our system is easy for investors to implement, with just a small batch of trades to be executed once per quarter. Interested investors can gain access to our latest picks as well as past newsletters by becoming a subscriber to Insider Monkey’s premium newsletters.

In the following list, growth companies are ranked based on their popularity amongst the cream of the crop of the hedge fund community. The list of which stocks qualify as growth stocks is inspired by lists released by Fortune and 24/7 Wallst.com, which revealed some of the fastest growing companies in the U.S. Skyworks Solutions Inc (NASDAQ:SWKS), Netflix, Inc. (NASDAQ:NFLX), Gilead Sciences, Inc. (NASDAQ:GILD), Biogen Inc (NASDAQ:BIIB) and Facebook Inc (NASDAQ:FB), which were common across both lists, were ranked as the top five companies on our list, based on their popularity among hedge funds. The remaining growth stocks were then also ranked based on hedge fund ownership. Check out the list of the 11 best growth company stocks to buy now beginning on the next page.

For further reading afterwards, don’t miss our list of the 11 best oil company stocks to buy now.

11. Lennar Corporation (NYSE:LEN)

– Number of Hedge Funds With Long Positions (as of March 31): 45

– Aggregate Value of Hedge Funds’ Holdings (as of March 31): $1.78 billion

Lennar Corporation (NYSE:LEN) is a leading homebuilder in the U.S. The company engages in the development of multi-family rental properties and providing real estate-related financial as well as investment management services in leading U.S markets. The company is expanding both organically and through acquisitions. The majority of Lennar Corporation’s income comes from its homebuilding operations (about 89% of total income in its fiscal year 2016), while the rest is derived from its financial services and other operations. The company has grown revenue by almost 86% over the last three years and should continue to do so going forward on the backdrop of rising demand for residential properties and increasing income levels. With 45 hedge funds in our database holding Lennar shares worth $1.78 billion, the stock ranks 11^th on our list of the 11 best growth company stocks to buy now.

Copyright: lightphoto / 123RF Stock Photo

You can sign up below to get the latest news about Lennar Corporation directly to your inbox.

10. Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN)

– Number of Hedge Funds With Long Positions (as of March 31): 52

– Aggregate Value of Hedge Funds’ Holdings (as of March 31): $2.5 billion

Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN) is a biopharmaceutical company serving people suffering from very rare disorders. The company has a global presence, selling its products primarily in the U.S, as well as in Europe, Japan, and other Asia Pacific countries. The company’s major products include Soliris (Hematology/Nephrology), Strensiq, and Kanuma (Metabolic Disorders). Revenue for the 12 months ended December 2016 amounted to $3 billion, almost double the $1.55 billion reported three years earlier. A total of 52 hedge funds in our system held shares in Alexion Pharmaceuticals at the end of the first quarter, up from 50 a quarter earlier.

Looker_Studio/Shutterstock.com

9. FleetCor Technologies, Inc. (NYSE:FLT)

– Number of Hedge Funds With Long Positions (as of March 31): 57

– Aggregate Value of Hedge Funds’ Holdings (as of March 31): $3.4 billion

FleetCor Technologies, Inc. (NYSE:FLT) is a leading global provider of payment products and services such as fleet cards, food cards, corporate lodging cards, and other specialized payment services for businesses. Its products are used in more than 50 countries worldwide, primarily in the U.S, Brazil, and the U.K., accounting for over 90% of 2016 revenue. FleetCor has a diverse customer base ranging from businesses and small petroleum marketers, to oil companies and government entities. At the end of the first quarter, 57 hedge funds in our system held long positions in FleetCor Technologies, owning 24.50% of its float.

Kite_rin/Shutterstock.com

8. Constellation Brands, Inc. (NYSE:STZ)

– Number of Hedge Funds With Long Positions (as of March 31): 67

– Aggregate Value of Hedge Funds’ Holdings (as of March 31): $8.16 billion

Constellation Brands, Inc. (NYSE:STZ) is a premium wine, beer and spirits company with international operations in the U.S, Mexico, New Zealand, Italy, and Canada. The company owns more than 100 brands like Corona, Ballast Point, Svedka, and Black Velvet and ranks as the world’s leading premium wine company, owning six of the 15 top-selling imported beer brands in the U.S. Leading products and market positions, premium brands, and an international footprint are Constellation Brands’ strong competitive advantages. The company has grown its revenue by over 50% over the last three years and should continue to post strong results, as the alcohol industry is relatively recession-proof. A total of 67 hedge funds in our database held shares of Constellation Brands worth $8.16 billion at the end of the first quarter, up from $6.38 billion in shares at the end of 2016.

Antonio Gravante / Shutterstock.com

7. Micron Technology, Inc. (NASDAQ:MU)

– Number of Hedge Funds With Long Positions (as of March 31): 70

– Aggregate Value of Hedge Funds’ Holdings (as of March 31): $2.78 billion

Micron Technology, Inc. (NASDAQ:MU) is a global leader in the semiconductor industry, providing memory technologies such as DRAM, NAND Flash, and NOR Flash. The company has been expanding through strategic acquisitions and partnership arrangements in recent years and has a presence in more than 18 countries globally. Micron has four reportable segments – Compute and Networking, Storage, Mobile, and Embedded. A diversified portfolio of semiconductor products, over three decades of technological experience, an impressive portfolio of 26,000+ patents, and a growing geographical presence form a strong competitive moat around the company, which is tough to replicate for new entrants. At the end of the first quarter, 70 hedge funds in our database owned 8.70% of Micron Technology, Inc.’s shares.

allstars/Shutterstock.com

6. salesforce.com, inc. (NYSE:CRM)

– Number of Hedge Funds With Long Positions (as of March 31): 79

– Aggregate Value of Hedge Funds’ Holdings (as of March 31): $4.27 billion

With 79 hedge funds having a long position in the stock, salesforce.com, inc. (NYSE:CRM) ranks sixth on our list of the 11 best growth company stocks to buy now. Salesforce is a leading provider of enterprise software. Its customer relationship management system, or CRM, is not only an industry-leading platform but also the world’s leading enterprise cloud ecosystem. The cloud company derives its income from subscription revenue and related professional services. Salesforce has built substantial market share and enjoys a leading reputation, being one of the earliest movers in the industry. The company has more than doubled its revenue over the last three years.

Copyright: drserg / 123RF Stock Photo

5. Skyworks Solutions Inc (NASDAQ:SWKS)

– Number of Hedge Funds With Long Positions (as of March 31): 26

– Aggregate Value of Hedge Funds’ Holdings (as of March 31): $450 million

Skyworks Solutions Inc (NASDAQ:SWKS) is a multinational company providing innovative analog semiconductors connecting people, places and things. The company has operating facilities throughout Asia, Europe and North America. Skyworks offers solutions for a wide range of markets like automotive, broadband, connected home, industrial, medical, military, smartphone, and wearables, as is poised to benefit from the wireless networking revolution. Over the last three years, Skyworks Solutions has increased its revenue by more than 80%. A total of 26 hedge funds in our database held shares in Skyworks Solutions Inc. worth $450 million at the end of the first quarter, up from $402 million in shares at the end of 2016.

Copyright: lculig / 123RF Stock Photo

4. Netflix, Inc. (NASDAQ:NFLX)

– Number of Hedge Funds With Long Positions (as of March 31): 67

– Aggregate Value of Hedge Funds’ Holdings (as of March 31): $6.9 billion

Netflix, Inc. (NASDAQ:NFLX) is the world’s leading internet television network. The company has over 100 million streaming members in more than 190 countries. Its revenue is reported under three segments: Domestic streaming, International streaming, and Domestic DVD. Netflix is a pioneer in the delivery of shows and movies over the internet., having launched its streaming service in 2007. Netflix continues to benefit from a shift in TV viewing trends from linear TV to on-demand, personalized and available on any screen. An affordable, no-commitment monthly fee, unlimited viewing on any internet-connected screen, and a strong stable of original content are Netflix’s strongest selling points. The company’s revenue has increased by a whopping 102% over the last three years.

Copyright: lculig / 123RF Stock Photo

3. Gilead Sciences, Inc. (NASDAQ:GILD)

– Number of Hedge Funds With Long Positions (as of March 31): 71

– Aggregate Value of Hedge Funds’ Holdings (as of March 31): $3.78 billion

Gilead Sciences, Inc. (NASDAQ:GILD) is a research-based biopharmaceutical company engaged in the discovery, development and commercialization of innovative medicines in areas such as HIV, hematology/oncology, cardiovascular, respiratory, and liver diseases. The company has good geographical reach, with a presence in more than 30 countries. Over three decades of pharmaceutical experience and an extensive patent portfolio are Gilead Sciences’ key strengths. The company is also growing both organically and through acquisitions. Gilead Sciences has shown impressive 170% revenue growth over the last three years. As per our database, 71 funds were long Gilead on March 31, holding shares worth $3.78 billion, up from $3.30 billion in shares owned at the end of 2016.

kurhan / shutterstock.com

2. Biogen Inc (NASDAQ:BIIB)

– Number of Hedge Funds With Long Positions (as of March 31): 79

– Aggregate Value of Hedge Funds’ Holdings (as of March 31): $3.12 billion

Biogen Inc (NASDAQ:BIIB) is a global biopharmaceutical company that develops products and therapies for people suffering from serious neurological, rare and autoimmune diseases. As one of the pioneers in biotechnology, Biogen is focused on developing solutions for challenging diseases like Alzheimer’s and Parkinson’s disease. The U.S is Biogen’s primary market, with more than 70% of its total product revenue coming from the country. A leading portfolio of treatments and innovative R&D and technology has enabled the company to retain an industry leading position in the biopharma industry. Biogen has also grown its revenue by 65% in the last three years. As per our records, 79 hedge funds held shares in Biogen at the end of the first quarter, an increase of three quarter-over-quarter.

anyaivanova/Shutterstock.com

1. Facebook Inc. (NASDAQ:FB)

– Number of Hedge Funds With Long Positions (as of March 31): 155

– Aggregate Value of Hedge Funds’ Holdings (as of March 31): $18.5 billion

Facebook Inc (NASDAQ:FB) ranks #1 on our list of the 11 best growth company stocks to buy now, with 155 hedge funds having long positions in the stock at the end of the first quarter, up from 146 at the end of December. Facebook has grown to become the world’s most visited website, and has shown explosive revenue growth, from just $7 billion at the end of 2013 to $27 billion reported for the twelve month period ended December 2016. Facebook has also been growing inorganically through acquisitions to cull talent and brands, and improve the company’s mobile offerings, successfully transitioning from being PC-focused to a mobile-focused company.

d8nn / Shutterstock.com

Disclosure: None