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Finance

4 Growth Stocks to Buy in March

President Joe Biden’s $1.9 trillion fiscal stimulus package and the Federal Reserve’s decision to keep interest rates near historic lows through 2023 might eventually lead to a strong comeback for the US economy. As a result, growth stocks are expected to witness further upside going forward.

While some analysts expect the economic recovery to cause a rotation away from growth stocks to undervalued investment options, the rally of some growth stocks may not reverse anytime soon.

Growth stocks have dominated the market’s skyrocketing rally over the past year. The SPDR Portfolio S&P 500 Growth ETF (SPYG), which can be seen as a benchmark for the performance of growth stocks, has gained 25.9% over the past year compared to the SPDR S&P 500 Trust ETF’s (SPY) 16.1% return. Even if the market rotation leads to lower returns for growth stocks this year, many are expected to outperform the market.

Amazon.com, Inc. (AMZN), NetEase, Inc. (NTES), BJ’s Wholesale Club Holdings, Inc. (BJ), and Nautilus, Inc. (NLS) have solid fundamentals and are poised for higher revenue and earnings growth.

Amazon.com, Inc. (AMZN)

AMZN needs no introduction. In addition to operating the world’s largest online marketplace, AMZN is also involved in providing cloud computing services through Amazon Web Services (AWS). AMZN’s stock has gained 51.8% over the past year and closed the last trading session at $3,180.74.

AMZN recently announced that Jeff Bezos will be stepping down as CEO of the company to be replaced by Andy Jassy. The fresh leadership could help the company explore new avenues and drive further growth. AMZN has recently expanded its transportation fleet by purchasing aircrafts to help with long-distance delivery operations.

AMZN’s trailing-twelve-month revenue grew at a CAGR of 29.3% over the past five years. The company’s trailing-twelve-month EBITDA grew at a CAGR of 45.7% over the past three years.

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AMZN is expected to see revenue growth of 38.5% for the quarter that ended March 31, 2021 and 22.8% in 2021. The company’s EPS is estimated to grow 14% in 2021 and at a rate of 38.4% per annum over the next five years.

AMZN’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, which equates to Buy in our proprietary ratings system. The POWR Ratings are calculated by taking into account 118 different factors with each factor weighted to an optimal degree.

It also has a Sentiment rating of A along with Growth and Quality ratings of B. In the 67-stock Internet industry, it is ranked #7.

In total, we rate AMZN on eight different levels. Beyond what we stated above, we also have given AMZN grades for Momentum, Stability and Value. Get all the AMZN ratings here.

NetEase, Inc. (NTES)

NTES runs an interactive online community in China. The company has operations in the gaming services, advertising services, and email services segments. NTES’s stock has returned 70.2% over the past year and its last closing price was $117.46.

NTES has recently launched its “Music Talent” initiative which supports new and upcoming artists to showcase their talent. The company has recently signed a multi-year licensing agreement with Universal Music Group to stream both domestic and international music.

The company’s trailing-twelve-month revenue grew at a CAGR of 29.3% over the past five years. NTES’s trailing-twelve-month EBITDA grew at a CAGR of 45.7% over the past three years.

NTES’s revenue is estimated to increase 42.3% for the quarter that ended March 31, 2021 and 19.2% in 2021. The company’s EPS is expected to rise 21.8% in 2021 and at the rate of 1.3% per annum over the next five years.

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It’s no surprise that NTES has an overall rating of B, which equates to Buy in our POWR Ratings system. NTES has a grade of B for Growth, Stability, Momentum, and Sentiment. In the 86-stock China industry, it is ranked #4.

Click here to see the additional POWR Ratings for NTES (Value and Quality).

BJ’s Wholesale Club Holdings, Inc. (BJ)

BJ runs gas stations and warehouse clubs primarily in eastern United States. The company also sells its products online. BJ closed yesterday’s trading session at $43.13, gaining 101.2% over the past year.

BJ recently opened a new club at Long Island City, NY. The company has also launched new features on their online shopping portal, including same-day delivery and curbside pick-up.

BJ’s revenue increased 13.9% year-over-year. The company’s EBITDA grew 41.8% year-over-year.

BJ’s revenue is estimated to increase 13.5% for the quarter that ended January 31, 2021 and 16.8% in 2021. The company’s EPS is expected to rise 108.2% in 2021 and at the rate of 18.5% per annum over the next five years.

BJ’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, which equates to Buy in our proprietary ratings system. BJ has a grade of A for Value along with a grade of B for Growth. In the 40-stock Grocery/Big-Box Retailers industry, it is ranked #20.

Beyond what we stated above, we also have given BJ a grade for Sentiment, Quality, Stability, and Momentum. Get all the BJ ratings here.

Nautilus, Inc. (NLS)

NLS delivers consumer fitness products. The company has operations in the United States, Canada, and internationally. NLS’ stock price has increased 669.7% over the past year to close yesterday’s trading session at $26.71.

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NLS has implemented major new updates to its JRNY fitness platform, which include better voice-coached workouts and trainer-led videos. The company has also launched new Bowflex treadmills that are integrated with its JRNY fitness platform.

The company’s trailing-twelve-month revenue grew at a CAGR of 7.8% over the past five years. NLS’ trailing-twelve-month EBITDA grew at a CAGR of 6.8% over the past three years.

NLS’ revenue is estimated to increase 57.2% for the quarter that ended March 31, 2021 and 76% for the quarter ended June 30, 2021. The company’s EPS is expected to rise 10% per annum over the next five years.

It’s no surprise that NLS has an overall rating of B, which equates to Buy in our POWR Ratings system. NLS has a grade of A for Growth and Quality. In the 33-stock Athletics & Recreation industry, it is ranked #12.

Click here to see the additional POWR Ratings for NLS (Value, Stability, Momentum, and Sentiment).

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AMZN shares were trading at $3,125.90 per share on Tuesday afternoon, down $54.84 (-1.72%). Year-to-date, AMZN has declined -4.02%, versus a 2.36% rise in the benchmark S&P 500 index during the same period.

About the Author: Aaryaman Aashind

Aaryaman is an accomplished journalist that’s passionate about providing in-depth insights about investing and personal finance. Recently he has been focused on the stock market and he specializes in evaluating high-growth stocks. More…

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