2 Monster Growth Stocks Smart Investors Should Buy Now

If you have some cash for the holidays this year and are looking to invest it, you might want to consider high growth stocks. Fast-growing companies typically operate in extremely large industries, and if their success continues over the next five years, they could be incredible investments.

I have two actions that match this description. Limited sea (NYSE: SE) and SEMrush (NYSE: SEMR) have both been impressive growth stocks in 2021, and this will likely continue into 2022 and beyond due to their strong competitive advantages. Savvy investors are looking for this type of high-quality stock at big discounts, and we have it today. Both stocks are over 30% of their all-time highs this year, providing a prime buying opportunity. Here’s why I think these companies are great buys right now.

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Sea Limited: A global e-commerce giant in the making

Sea Limited stands for strong growth. It has been able to increase its revenue by 2,620% since 2015, and despite being a $ 122 billion company, it still increased its revenue by 122% in the third quarter. This is because Sea has three successful revenue streams: games, e-commerce, and digital payments. While its digital games and payments segments have huge opportunities ahead of them, the company is particularly focused on its e-commerce arm, where it wants to become a global powerhouse.

Shopee from Sea Limited has become the most popular e-commerce platform not only in Southeast Asia but in Brazil. In Southeast Asia, Taiwan and Brazil, Shopee was the top-ranked shopping app on the Google Play Store in terms of time spent on the app in the third quarter. The company was also the second most popular shopping app in terms of downloads and monthly active users around the world, but it is striving to become even bigger.

Sea Limited announced that Shopee is expanding into France, Poland, Spain and India, clearly stating its intention to become a global e-commerce company. This now places Shopee on three continents across the world. The company will face competition mainly Amazon in Europe, so all its efforts may not be crowned with success. However, Shopee’s incredible success so far in Southeast Asia and Brazil could indicate that he will fight hard.

This rapid expansion opens up a massive global e-commerce market for Sea Limited. The estimated global e-commerce sales volume in 2021 is expected to reach $ 4.9 trillion. In addition, that figure is expected to reach $ 7.4 trillion in 2025, according to Oberlo.

With such a large market opportunity and a strong CV in South East Asia and Brazil, I have no doubts that Sea will find success in Europe. The company is trading at 14 times sales, which is a good deal given that Sea is consistently increasing revenue at triple-digit rates. I think Sea Limited could provide a huge reward to shareholders over the next decade if it can continue its winning streak around the world.

SEMrush: a toolkit for marketers

If you’re part of a marketing team, you might have had a hard time deciding where the right places to advertise are. Building, managing, and monitoring multiple advertising channels to make sure you’re effectively reaching your target audience can be difficult, and SEMrush helps you do that.

SEMrush enables more than 79,000 customers in 143 countries (including the world’s largest companies like You’re here and Apple) to track their marketing success. And with 50 tools to help them do that, he’s the leader by far in this space. Many of its competitors are smaller niche vendors that focus on a specific tool like search engine optimization marketing, but SEMrush allows clients to get the full reach of their marketing strategy.

This industry leading position and product optionality led to impressive third quarter revenue growth of 53% year-on-year to $ 49 million. Its net retention rate also improved, reaching 124% in the third quarter from 121% in the second quarter, indicating a decrease in the churn rate and an increase in spend per user. While 40% of its revenue is spent on sales and marketing expenses, its dominance in the space has allowed SEMrush to be roughly break even in terms of profitability.

The company expects annual revenue of $ 816 million, which is paltry compared to its future addressable markets of $ 20 billion. With its strong hold on the space due to its wide product line, I think SEMrush could capitalize on this massive growth track. The business is trading at 17 times sales, but with so much room to manage and a dominant platform, I’m willing to pay.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.

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