2 Growth Stocks on My Buy List
Growth stocks have been hit the hardest in the ongoing bear market. That's because they typically rise the fastest when markets are charging higher, resulting in lofty valuations. While the steep drop can be painful for shareholders, it also presents the best opportunity to juice long-term returns when markets recover.
The Nasdaq Composite index is a good gauge of the growth sector since it is heavy with technology companies. That index is now down nearly 30% in 2022, while the S&P 500 has only declined by about 21%. That makes now a prime time to identify strong growth companies whose stocks could outperform when investors are ready to take on more risk once again.
There is more risk with owning Tesla (NASDAQ: TSLA) than many other growth stocks because of how expensive the stock became relative to its business metrics. While the stock has declined by about 40% so far in 2022, its trailing-12-month price-to-earnings (P/E) ratio remains near 60. But growth investors are counting on overpriced stocks adjusting their valuations as the businesses grow.
Source Fool.com
