12 Best Stocks for Long-Term Growth

Published on October 10, 2022 at 9:29 am by Omer Farooq in Hedge Funds, News

In this article, we will look at the 12 best stocks for long-term growth. If you want to explore similar stocks, you can also take a look at 5 Best Stocks for Long-Term Growth.

Growth stocks are taking a beating in 2022 due to higher borrowing costs that are delaying expansion plans and negatively impacting margins. However, for long-term investors, this is a buying opportunity. Investors that have a long-term time horizon and are closely observing secular trends can still find stocks in a bear market that can experience strong growth. Secular growth industries include clean energy, electric vehicles, biotech, cloud computing, cybersecurity, and artificial intelligence among others. These are all industries that are reshaping the world and are therefore expected to experience long-term growth. For instance, the digital transformation of industries is expected to grow the cloud computing industry from an estimated $480 billion in 2022 to $1.7 trillion by 2029 at a compound annual growth rate of 19.9% over the forecasted period. The global biotech industry was worth $1 trillion in 2021 and is expected to grow at a compound annual growth rate of 13.9% from 2022 to 2030. As businesses go digital, cybersecurity is becoming a major concern for businesses. The global cybersecurity market is expected to be worth $155.8 billion in 2022 and then grow at a compound annual growth rate of 13.4% through 2029 to reach a value of $376.3 billion.

These are only a few industries that are expected to experience healthy growth over the next decade. In this article, we will uncover some of the best stocks for investors to own for long-term growth. Some of the best long-term stocks to own include Microsoft Corporation (NASDAQ:MSFT), Alphabet Inc. (NASDAQ:GOOG), and Apple Inc. (NASDAQ:AAPL).

Our Methodology

To determine the 12 best stocks to own for long-term growth, we looked for companies that belonged to secular growth industries. We narrowed down our selection to companies that have the potential to grow significantly, based on their relevant growth catalysts. Along with each stock, we have mentioned the hedge fund sentiment, analyst ratings, and growth catalysts.

Best Stocks for Long-Term Growth

12. BioNTech SE (NASDAQ:BNTX)

Number of Hedge Fund Holders: 26

BioNTech SE (NASDAQ:BNTX) is a leading German biotechnology company that is involved in the research and development of immunotherapies for cancer and other infectious diseases. The company has strategic collaborations with biotech giants such as Genentech, Inc. and Pfizer Inc. (NYSE:PFE). The stock is currently trading at bargain levels. As of October 6, BioNTech SE (NASDAQ:BNTX) has a trailing twelve-month PE ratio of 3.12 and has free cash flows of EUR 9 billion.

BioNTech SE (NASDAQ:BNTX) is expanding its operations and, on October 5, the company announced that it will be working with the State of Victoria in Australia to research and develop mRNA-based vaccines and therapies. BioNTech SE (NASDAQ:BNTX) will be building an R&D center and a clinical-scale end-to-end mRNA manufacturing facility in Melbourne. BioNTech SE (NASDAQ:BNTX) has long-term growth potential and is one of the best long-term stocks to buy now.

This August, H.C. Wainwright analyst Robert Burns revised his price target on BioNTech SE (NASDAQ:BNTX) to $272 from $283 and reiterated a Buy rating on the shares. On August 17, Cowen analyst Yaron Werber started coverage of BioNTech SE (NASDAQ:BNTX) with a Market Perform rating and a $177 price target.

At the end of Q2 2022, 26 hedge funds were long BioNTech SE (NASDAQ:BNTX) and held stakes worth $380.5 million in the company. As of June 30, Coatue Management is the top shareholder in BioNTech SE (NASDAQ:BNTX) and has stakes worth $62.8 million in the company.

11. Palantir Technologies Inc. (NYSE:PLTR)

Number of Hedge Fund Holders: 26

Palantir Technologies Inc. (NYSE:PLTR) is a leading big data firm that specializes in developing software for intelligence agencies in the U.S. and counterterrorism. In addition, the company also provides enterprise software solutions that help businesses integrate and analyze their data. On October 3, Palantir Technologies Inc. (NYSE:PLTR) announced a strategic collaboration with Concordance Healthcare Solutions to power the first, fully integrated medical supply chain ecosystem. Palantir Technologies Inc. (NYSE:PLTR) is one of the best long-term stocks to buy now.

This August, Jefferies analyst Brent Thill revised his price target on Palantir Technologies Inc. (NYSE:PLTR) to $12 from $13 and reiterated a Buy rating on the shares. The analyst noted that the company’s enterprise software business “continues to deliver” and that he sees improving profitability.

At the end of Q2 2022, 26 hedge funds disclosed ownership of stakes in Palantir Technologies Inc. (NYSE:PLTR). These funds held collective stakes of $591 million in the company. This is compared to 36 positions in the previous quarter with stakes worth $611 million.

As of June 30, Renaissance Technologies is the most prominent shareholder in Palantir Technologies Inc. (NYSE:PLTR) and owns roughly 28 million shares of the company. The fund’s stakes are valued at $255.8 million and the investment covers 0.3% of Jim Simons’ 13F portfolio.

Some of the best large-cap stocks to buy for the long term include Microsoft Corporation (NASDAQ:MSFT), Alphabet Inc. (NASDAQ:GOOG), and Apple Inc. (NASDAQ:AAPL).

10. Ginkgo Bioworks Holdings, Inc. (NYSE:DNA)

Number of Hedge Fund Holders: 29

Ginkgo Bioworks Holdings, Inc. (NYSE:DNA) is an innovative biotech company that is involved in cell programming and genetic engineering to develop products for various industries including food, agriculture, and chemicals among others. The company has been making strides and on October 4, Ginkgo Bioworks Holdings, Inc. (NYSE:DNA) announced that it has acquired French biotech company Altar. Ginkgo Bioworks Holdings, Inc. (NYSE:DNA) aims to use Altar’s technology to build solutions for a variety of industries including food & beverage, biofuels, biomaterials, cosmetics, and healthcare. Ginkgo Bioworks Holdings, Inc. (NYSE:DNA) is one of the best long-term stocks to buy now.

Wall Street sees upside to Ginkgo Bioworks Holdings, Inc. (NYSE:DNA). This August, Raymond James analyst Rahul Sarugaser raised his price target on Ginkgo Bioworks Holdings, Inc. (NYSE:DNA) to $14.50 from $11.50 and reiterated an Outperform rating on the shares. On October 4, Morgan Stanley analyst Tejas Savant started coverage of Ginkgo Bioworks Holdings, Inc. (NYSE:DNA) with an Equal Weight rating and a $5 price target. The analyst noted that Ginkgo Bioworks Holdings, Inc. (NYSE:DNA) has the “best-positioned game” in its industry.

At the close of the second quarter of 2022, 29 hedge funds disclosed ownership of stakes in Ginkgo Bioworks Holdings, Inc. (NYSE:DNA). The total value of these stakes amounted to $575.77 million. On October 6, Cathie Wood of ARK Investment Management bought roughly 0.95 million additional shares of Ginkgo Bioworks Holdings, Inc. (NYSE:DNA).

9. International Business Machines Corporation (NYSE:IBM)

Number of Hedge Fund Holders: 40

On October 6, International Business Machines Corporation (NYSE:IBM) announced that it plans to invest $20 billion across its facilities in New York over the next decade. The company plans on accelerating innovation and development in semiconductors, cloud-computing artificial intelligence, and quantum computing with this investment. International Business Machines Corporation (NYSE:IBM) is one of the best long-term stocks to buy now.

Wall Street is bullish on International Business Machines Corporation (NYSE:IBM). This October, Morgan Stanley analyst Erik Woodring revised his price target on International Business Machines Corporation (NYSE:IBM) to $152 from $155 and maintained a buy-side Overweight rating on the shares.

In addition to having significant long-term growth potential, International Business Machines Corporation (NYSE:IBM) is profitable and awards its shareholders with dividends. As of October 6, the stock is offering a forward dividend yield of 5.43% and has a trailing twelve-month operating margin of 11%.

At the end of the second quarter of 2022, 40 hedge funds held stakes in International Business Machines Corporation (NYSE:IBM). The total value of these stakes amounted to $948 million. Of these hedge funds, Arrowstreet Capital was the leading shareholder in the company and held stakes worth $372.6 million.

8. Cloudflare, Inc. (NYSE:NET)

Number of Hedge Fund Holders: 41

Cloudflare, Inc. (NYSE:NET) is a leading global cybersecurity company and is among the best long-term stocks to buy now. On August 4, Cloudflare, Inc. (NYSE:NET) announced strong earnings for the second quarter of fiscal 2022. The company reported a revenue of $234.5 million, up 53.85% year over year, and beat Wall Street estimates by $7 million.

Wall Street is bullish on Cloudflare, Inc. (NYSE:NET). On September 8, Cantor Fitzgerald analyst Jonathan Ruykhaver started coverage of Cloudflare, Inc. (NYSE:NET) with a Neutral rating and a $65 price target. The analyst noted that Cloudflare, Inc. (NYSE:NET) is a “cloud disruptor” and is dedicated to building an attractive security portfolio. On September 22, MoffettNathanson analyst Sterling Auty started coverage of Cloudflare, Inc. (NYSE:NET) with a Buy rating and a $114 price target.

At the end of Q2 2022, 41 hedge funds were long Cloudflare, Inc. (NYSE:NET) and held stakes worth $541 million. As of June 30, Two Sigma Advisors is the largest shareholder in Cloudflare, Inc. (NYSE:NET) and has stakes worth $103.7 million in the company.

Here is what Baron Funds had to say about Cloudflare, Inc. (NYSE:NET) in its second-quarter 2022 investor letter:

“Despite posting solid quarterly results with 54% revenue growth, and a record addition of 14,000 customers, shares of Cloudflare, Inc. (NYSE:NET), a software infrastructure provider, declined 63% in the quarter along with other fast-growing names in the software universe that penalize current profitability by reinvesting back in their businesses. We believe Cloudflare’s disruptive global platform and unmatched pace of innovation will enable the company to continue to take share across multiple large addressable markets for years to come.”

7. Veeva Systems Inc. (NYSE:VEEV)

Number of Hedge Fund Holders: 45

Veeva Systems Inc. (NYSE:VEEV) is a pioneer in data analytics and cloud solutions for the healthcare industry. The stock is ranked among the best long-term stocks to buy now because of its unique business model, profitability, and cash flows. The company has a trailing twelve-month operating margin of 24% and has free cash flows of $741.4 million. On October 4, Veeva Systems Inc. (NYSE:VEEV) announced that over 350 organizations are using its Veeva Vault RIM Suite.

On August 31, Veeva Systems Inc. (NYSE:VEEV) announced market-beating earnings for the fiscal second quarter of 2023. The company reported earnings per share of $1.03 and outperformed EPS estimates by $0.02. The company generated a revenue of $534.2 million, up 17.26% year over year, and beat Wall Street consensus by $3.52 million.

Analysts are bullish on Veeva Systems Inc. (NYSE:VEEV). On September 15, KeyBanc analyst Scott Schoenhaus started coverage of Veeva Systems Inc. (NYSE:VEEV) with a buy-side Overweight rating and a $220 price target.

At the end of the second quarter of 2022, 45 hedge funds were long Veeva Systems Inc. (NYSE:VEEV) and held stakes worth $1 billion in the company. This is compared to 41 positions in the previous quarter with stakes worth $922 million. The hedge fund sentiment for the stock is positive.

As of June 30, Echo Street Capital Management is the leading shareholder in Veeva Systems Inc. (NYSE:VEEV) and has stakes of roughly $150 million in the company.

Here is what Artisan Partners had to say about Veeva Systems Inc. (NYSE:VEEV) in its second-quarter 2022 investor letter:

“Veeva Systems Inc. (NYSE:VEEV) is one of the highest quality franchises in our portfolio. The company has the dominant CRM platform for pharmaceutical sales and marketing organizations, and it is replicating that success with the rollout of numerous other modules focused on pharmaceutical customers’ manufacturing, quality, safety and clinical operations. Growth has temporarily slowed over the past year as the company laps difficult YoY comparisons caused by the rapid adoption of their virtual sales call solution during the pandemic. Several large deals also encountered unexpected delays in late 2021. Despite these short-term headwinds, we remain confident in Veeva’s future growth prospects and high-quality business model (~40% free cash flow margins supported by largely recurring subscription revenues). Meanwhile, we believe the defensive nature of its end market (health care) and strategic importance of cloud IT driven transformations could help buffer the company against a weaker global economy. As shares declined in Q2 along with other software stocks, we added to our position.”

6. Broadcom Inc. (NASDAQ:AVGO)

Number of Hedge Fund Holders: 66

Broadcom Inc. (NASDAQ:AVGO) is a leading semiconductor and infrastructure software company that serves various industries including cybersecurity, data center, broadband, telecommunication, smartphone, and power generation among others. On September 6, Broadcom Inc. (NASDAQ:AVGO) announced that it has shipped the Trident 4C Ethernet switch, one of the highest-performance security switches that can analyze flow anomalies in real-time and offer rapid cyber-threat defense. The stock is one of the best long-term stocks to buy now.

On September 1, Broadcom Inc. (NASDAQ:AVGO) announced earnings for the third quarter of fiscal 2022. The company reported earnings per share of $9.73 and outperformed estimates by $0.18. The company generated a revenue of $8.46 billion, up 24.87% year over year, and beat Wall Street consensus by $57.49 million.

This September, Mizuho analyst Vijay Rakesh maintained his Buy rating and $725 price target on Broadcom Inc. (NASDAQ:AVGO). The analyst noted that Broadcom Inc. (NASDAQ:AVGO) continues to experience “robust” data center demand and backlog.

At the close of the second quarter of 2022, 66 hedge funds disclosed ownership of stakes in Broadcom Inc. (NASDAQ:AVGO). The total value of these stakes amounted to $4.03 billion. As of June 30, Fisher Asset Management owns 1.4 million shares of Broadcom Inc. (NASDAQ:AVGO) and is the largest shareholder in the company.

In addition to Broadcom Inc. (NASDAQ:AVGO), for long-term investors, some of the top stocks to own include names like Microsoft Corporation (NASDAQ:MSFT), Alphabet Inc. (NASDAQ:GOOG), and Apple Inc. (NASDAQ:AAPL).

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