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Top 10 Growth Stocks To Own Right Now

Penny stocks are a great way for investors to chase triple-digit gains without a huge initial investment. That’s why we’re bringing you the three penny stocks to buy in July 2018.

You see, penny stocks can generate significant returns for retail investors. Just last month, we identified a little-known education company that jumped 267% in just one week.

Stocksmoneymorning.com/wp-content/blogs.dir/1/files/2018/05/coins_showing_growth-75×50.jpg 75w, moneymorning.com/wp-content/blogs.dir/1/files/2018/05/coins_showing_growth.jpg 550w” sizes=”(max-width: 300px) 100vw, 300px” title=”Stocks” style=”font-size: 18.0018px; box-sizing: border-box; margin: 0px 0px 24px 24px; padding: 0px; border: 0px; vertical-align: middle; max-width: 100%; height: auto; float: right; text-align: right;” />In order to identify penny stocks with this kind of potential, we use the Money Morning Stock VQScore™ system to find the best stocks under $5 – the SEC’s official definition of a penny stock.

Our favorite penny stocks for July have the potential to generate considerable return. In fact, our top penny stock to buy could jump over 60%.

Here are our top penny stocks for July…

Top 10 Growth Stocks To Own Right Now: Digital Realty Trust Inc.(DLR)

It can be difficult for dividend investors to find an income payer that offers a high yield, the opportunity for growth, and a level of security. One way to narrow the field is by looking among a group of companies that have qualified for special tax treatment known as real estate investment trusts (REITs). These tax-advantaged businesses are required by the IRS to pay out at least 90% of their profits to investors as dividends.

One such REIT with a long runway is Digital Realty Trust, a company focused on the growing field of data centers, which are large, specialized buildings that house the servers and other network equipment used in cloud computing. These locations require highly reliable and secure environments that contain redundant backup systems for mechanical, cooling, electrical, and network connections — all necessary to protect the data stored on the servers. 

Several bar charts showing high growth rates in artificial intelligence, the internet of things, self-driving cars, and virtual and augmented reality over the next several years.

IMAGE SOURCE: DIGITAL REALTY TRUST.

The market is large and growing, with worldwide public cloud revenue expected to grow to $411 billion by 2020, up from just $260 billion last year. Ongoing developments in the areas of artificial intelligence, the Internet of Things, self-driving cars, and virtual and augmented reality are expected to accelerate the need for additional data centers in the coming years. 

Digital Realty provides over 200 data centers in 12 countries and 32 metropolitan areas, totaling 32 million rentable square feet. The company has built in annual rent increases of between 2% and 4%, and its average remaining lease is 4.9 years. 

Even more impressive is the company’s growth. It has increased its FFO (funds from operations — the REIT measure for earnings) by 12.3% annually over the past 12 years. Digital Realty Trust has grown its dividend at about the same rate, and its payout currently yields 3.6%. 

The company’s customer list reads like a Who’s Who of the tech and telecom industries, boasting IBM, Facebook, Verizon, AT&T, and Comcast among its top clients.

With a high yield, a significant runway for growth, and a stable and growing payout, Digital Realty Trust is a top stock to buy now.

Top 10 Growth Stocks To Own Right Now: Match Group, Inc.(MTCH)

Match Group’s stock also easily crushed the market with a 125% gain over the past 12 months. Match owns several well-known dating apps, including Match, Tinder, OKCupid, and Plenty of Fish, and generates revenues from display ads and paid subscriptions. Its total paid subscribers grew 26% annually to 7.4 million last quarter, with Tinder’s premium members accounting for 3.5 million of that total.

Match, which was spun off by internet media company IAC in 2015, is the 800-pound gorilla of online dating. However, Facebook’s recent introduction of a dating feature caused many investors to question the width of Match’s moat. Match subsequently struck back by launching a new "gamified" dating app called Crown, acquiring a stake in NYC-based dating app Hinge, and introducing new interest-based features for Tinder.

Match’s revenue rose 19% last year, but its adjusted earnings dipped 19% due to tax reform-related charges. Wall Street expects its revenue to rise 27% this year as its earnings rebound 106% from that temporary dip. That’s a solid growth rate for a stock that trades at just 29 times this year’s earnings, but analysts expect its earnings growth to decelerate to 19% next year.

Top 10 Growth Stocks To Own Right Now: Sage Therapeutics, Inc.(SAGE)

Sage Therapeutics isn’t profitable and has no products on the market. But with the biotech’s market cap standing at more than $7.3 billion, investors are obviously expecting the situation for Sage to change dramatically in the not-too-distant future. I think those expectations will be met.

The U.S. Food and Drug Administration (FDA) is set to make an approval decision for Sage’s lead candidate, an intravenous (IV) version of brexanolone, by Dec. 19, 2018. If all goes well, the drug will become the first therapy approved by the FDA for treating postpartum depression.

I think the chances for FDA approval are quite good based on the phase 3 clinical results for brexanolone. And if the IV formulation of the drug is successful, that bodes well for Sage’s followup — SAGE-217, an oral drug that’s similar to brexanolone. The biotech is moving forward with a pivotal phase 3 study of SAGE-217 as a major depressive disorder treatment and expects to announce results in the fourth quarter of this year.

Sage could be looking at peak annual sales of $775 million for brexanolone and $2.5 billion for SAGE-217. I think the potential for these two drugs makes this biotech an attractive acquisition target.  

Top 10 Growth Stocks To Own Right Now: Tencent Holdings Limited(TCEHY)

Tencent Holdings Ltd (OTCMKTS:TCEHY) is a true stock legend. The tech giant is the first Chinese company to be valued at over $500 billion. This puts it in the same league as major U.S. stocks like Facebook. And according to the Wall Street Journal, TCEHY “isn’t yet a household name in the U.S., but it should be.”

The company has its fingers in many pies from a hugely successful gaming business to music and videos. But Tencent wouldn’t be Tencent without WeChat. This is an extremely popular Chinese messaging app with almost 1 billion users. Think of a juiced-up version of WhatsApp that includes payment systems, smart city offerings such as the ability to schedule appointments, pay traffic fines or make visa applications.

“Tencent dominates consumer engagement and has a variety of tools for businesses to reach consumers,” writes KeyBanc’s Hans Chung. “It has been cautious about monetization, but we believe the opportunity is huge and achievable given the largest scale and engagement in China.” Indeed, Wells Fargo’s Ken Sena is particularly enthusiastic about the potential in video revenue and predicts a surge of video subscribers in the next five years.

From our data we can see that this ‘Strong Buy’ stock scores three recent Buy ratings from the Street. This is with an average price target of $65 (29% upside potential).

Best Low Price Stocks To Buy For 2019

U.S. stocks seem to have shrugged off all uncertainties regarding nagging trade tensions between the United States and China. The one-and-a-half-month-long tech tantrums also have eased and rising rate worries have probably taken a backseat after weaker-than-expected U.S. jobs data.

Best Low Price Stocks To Buy For 2019: Royal Gold Inc.(RGLD)

Pure gold mining operations tend to be all-or-nothing affairs: either the project produces gold and other precious metals, or it does not. I understand that this scenario appeals to many gold stocks investors; however, other people want a reasonable exposure level to the mining industry. For the latter, Royal Gold, Inc (USA) (NASDAQ:RGLD) fits the bill perfectly.

Royal Gold utilizes a streaming and royalty-based business model. Among several advantages, streaming allows RGLD to gain exposure to multiple asset-producing projects without incurring onerous risk. Furthermore, the company’s budgeting and planning are much more predictable and accurate since they’re only dealing with actual producers. Investors love it, which is why RGLD stock has weathered the storm better the most.

On a YTD basis, shares are up 6.4%, which by itself is nothing to write home about. However, with benchmark indices struggling to return to black ink, RGLD has contributed a comparatively impressive performance. Moreover, we can likely anticipate increased bullishness in the near future.

In recent weeks, the underlying gold market turned positive for the year. Given the domestic and geopolitical uncertainties facing the Trump administration, gold could rise simply due to risk-adverse sentiment.

If that’s the case, I’d keep a close eye on RGLD.

Best Low Price Stocks To Buy For 2019: Google Inc.(GOOG)

Thanks to the lift to big-tech stocks, Alphabet Inc (NASDAQ:GOOG, NASDAQ:GOOGL) was up 3.5% in mid-day trading Wednesday to take the fight back to its 50-day moving average. This caps a multi-week rally off of its early March low. While the stock was caught up in the sympathy selling surrounding the Facebook, Inc. (NASDAQ:FB) data privacy scandal, recent positive coverage in Barron’s has helped flip the script.

The company will next report results on April 23, after the close. Analysts are looking for earnings of $9.21-per-share on revenues of $30.3 billion. When the company last reported on Feb. 1, earnings of $9.70 missed estimates by 37 cents on a 24% rise in revenues.

Best Low Price Stocks To Buy For 2019: Live Nation Entertainment, Inc.(LYV)

This is the company that was formed by a merger of Live Nation, the concert venue and rock-star-promoting business that it is. So many musicians, today, of course, make most of their money on tours, since the sale of CDs, you might have noticed, has dropped off a cliff in recent years. Live Nation, then, bought a merger with Ticketmaster, so this is the company that sells you the tickets to come into its venues to watch the entertainment that it’s promoting. It’s a tremendously powerful model.

I don’t see any real competition for this company and actually, thinking backwards through the five stocks for April The Giraffe, think about the companies and how little competition or how dominant they are within their industries. Whether you’re Axon Enterprise, I really can’t think of an alternative to Taser or police body cams. There are some small competitors out there, but there’s no Pepsi that I see to Axon’s Coca-Cola, and I would say the same thing for ResMed. I would say the same thing for Intuitive Surgical. Sure, for PAC, our Mexican airport operators and for Live Nation. So, you’re starting to look and see into the secrets of how I think about picking stocks and which businesses you and I want to own for years.

Live Nation is a market beater over the last year. At this time last year, it was at $31.50 as we did the show. Today it’s at $38.50. It’s up 22%. I will never sneeze at that. That’s good. I’ll take that annualized every year if I could get it against the market’s 15% because it’s been a good year for the market. That’s a +7%.

I’m warming up my five next stocks to pick on this week’s podcast, but before we do… You thought I was going to do an ad read. Nope, I’m going to do stats. I’m going to give you the numbers that we just covered.

Best Low Price Stocks To Buy For 2019: Match Group, Inc.(MTCH)

We’re down to the M’s. Match Group (NASDAQ:MTCH). Match.com. A lot of older people my age in our 50’s or so, we grew up with that over the last 10 or 20 years. To me that’s almost like the LinkedIn, but for dating. That’s kind of the more corporate, professional world site, but many other people know and use Tinder, which is maybe for a younger generation. I’m sure it’s used by people of all ages. Never by me, as a happily married man.

If you’ve ever heard of Tinder or you like Tinder, guess what? You could be a shareowner in the company that owns Tinder, and beyond just Match.com and Tinder, Match Group has 30 to 40 other sites appealing to many different types of people helping them find other people that they might fall in love with. Maybe get married one day. This is something that sounded bizarre 25 years ago and yet, meeting other people online and forming long-term relationships is increasingly in the top three of how we, as humans, interact with each other. Match Group is the out-and-out leader. Love the company. 

Best Low Price Stocks To Buy For 2019: Walt Disney Company (DIS)

When it comes to the entertainment industry, no company has a more impressive legacy than Disney. The business has been in operation for 95 years, and public since 1957. Its stock has delivered stellar returns across that latter stretch, though its share price is down roughly 5% over the last several years. Cord-cutting is casting a cloud over Disney’s media networks segment — a division that accounted for roughly 41% of sales and 30% of operating income last quarter.

These challenges have contributed to the recent stagnation and shares trading at just 14 times this year’s earnings — a valuation that looks attractive in the context of the company’s strengths and historical resilience. Disney’s parks and resorts segment has been helping to offset the networks issues, and the company is making adaptations to meet the shifting media climate — recently unveiling its ESPN Plus streaming platform and readying its own film and television streaming service.

Consider that Mickey Mouse’s animation debut in the classic Steamboat Willy cartoon occurred almost 90 years ago. Today, the character is still one of the world’s most valuable entertainment properties and generates billions in annual retail sales. Disney has an unparalleled collection of entertainment properties, and it’s set to make that advantage even more pronounced by acquiring Twenty-First Century Fox’s film and character licenses. That should help the company continue to win at the box office, drive traffic at its parks and resorts, and compete in the streaming space. 

Disney’s dividend adds to its value as a long-term investment. The stock comes with a 1.7% yield, and with a payout ratio of just 24%, there’s a good chance the House of Mouse will continue to deliver payout growth. For investors willing to weather some uncertainty as the company deals with some media networks turbulence, I think Disney is a stock that’s worth owning on a 50-year timeline.