Growth stocks are companies that one expects will outperform the market. When I started investing, I was far too preoccupied with growth stocks, and with trying to pick future winners in biotech and other fields. But nowadays, growth stocks represent a small part of my portfolio. Instead, I generally prefer investing in more stable value and dividend stocks.
But today I am looking a growth stocks. Specifically, ones that I think that will benefit from a range of global trends.
Hargreaves Lansdown
Perhaps it’s not as exciting as biotechs and EVs, but I see Hargreaves Lansdown (LSE:HL) being a big winner as investors increasingly take control of their own investments. According to Lloyds, around one in 10 Britons started investing during the pandemic.
This meant that 2020/21 was a bumper year for the Bristol-based financial services firm, which is essentially a supermarket platform for stocks and funds. In its most recent report, Hargreaves highlighted that it was continuing to grow its client base, which now numbers more than 1.7m.
There might be a short-term slowdown as the cost-of-living crisis bites, but I see the long-term trends as being very positive for Hargreaves. It also pays a healthy 4% dividend right now, which is not what I’d expect from a conventional growth stock.
Sociedad QuÃmica y Minera de Chile
Sociedad QuÃmica y Minera de Chile (NYSE:SQM) is one of the world’s biggest lithium mining stocks. It has been going from strength to strength over the past 18 months, but particularly this year as lithium prices spiked.
The Chile-based company has a 25% share of the global lithium market with 20+ years of reserves. It’s also fairly low cost in comparison to peers. SQM is looking to increase lithium carbonate equivalent capacity by 30% annually until 2025. This should cement its place as a global leader.
Lithium is widely used in the production of batteries used in EVs and other technologies. It’s clearly much in demand as we move away from fossil fuels.
But I’m not buying just yet. This year, lithium prices have gone from $10,000 per tonne to nearly $68,000 today, but it’s predicted to fall to $16,000 next year amid recession fears. So, while I’m bullish on the long-term prospects, I think there’ll be better opportunities to buy in the coming months.
Ceres Power
Ceres Power (LSE:CWR) is a world leader in fuel cells and hydrogen power. And 2022 could be a big year for Ceres. It has lucrative partnerships with Bosch and Doosan Fuel Cell, with the latter looking to soft-launch its first product this year.
Ceres is debt-free, and has £245m in cash. It’s got a cash runway of about 7.6 years, having only burned £32m over the past 12 months. It also doesn’t manufacture its own products, which removes some of the need for huge sums of capital expense.
There’s clearly no guarantee that Ceres’s tech will be the next big winner, but I’m confident it will be part of the future of energy generation and transport. With the share price down 32% over the past 12 months, I’d buy now.