As a young investor, you have time on your side. This means that you can invest in growth stocks without worrying too much about the volatility that comes with investing in this type of stock. One way to approach growth investing is to look at the sectors that interest you and determine if there is an opportunity for growth there.
For example, I’m very interested in the e-commerce industry. I believe that as today’s youth continue to grow and eventually make up a greater proportion of the global consumer base, e-commerce should also grow. This is why e-commerce is at the center of the stocks I think young investors should buy today.
A leader in the e-commerce industry When it comes to e-commerce, Shopify (:TSX:)(NYSE:SHOP) is an undisputed leader. This stock has been heavily criticized recently due to its massive decline in value since the beginning of the year. However, stock market performance aside, it’s very hard to argue that Shopify isn’t a major player in the global e-commerce industry. In the second quarter of 2021, it surpassed Amazon (NASDAQ:) in monthly unique visitors for the first time.
Shopify revenue is based on subscription activity. This provides the business with a very predictable and stable source of income. Moreover, the company is led by its founder. Its CEO, Tobi Lütke, has a very large stake in the company. These are all characteristics of a top growth stock. Shopify stock is certainly going through a tough time right now, given current market sentiments. However, I think it is still a top stock that young investors should keep in their portfolio.
Don’t Sleep On This Company Goodfood Market (TSX: FOOD) is a stock I think young investors should really pay attention to. The online grocery industry is really starting to pick up across the country, with many competitors vying for market share. Goodfood is in a unique position because it already owns such a large share of this industry. In 2019, Goodfood was estimated to have a 40-45% share of the Canadian meal kit industry.
Since 2016, Goodfood has experienced very rapid growth. It has expanded to all Canadian provinces and is now trying to optimize its execution processes. Goodfood aims to offer express deliveries in all of its major service areas. If it can succeed, consumers might be even more receptive to the idea of online grocery shopping. This is still a very new industry, but online grocery shopping could become very big in the years to come.
A brick-and-mortar company expanding its horizons Aritzia (TSX: ATZ) is an everyday luxury brand that has established a strong presence in the Canadian retail industry. It currently has 67 operating stores across the country, with another 41 locations in the United States. However, what interests me in this company is not its physical activity. Rather, it is the online business of Aritzia, which delivers goods to more than 200 countries around the world.
From 2016 to 2020, Aritzia’s e-commerce business grew at a CAGR of 36%. This side of its business also accounted for approximately 23% of Aritzia’s total revenue. In 2021, the company saw an 88% year-over-year increase in e-commerce revenue. Additionally, online sales accounted for 50% of its total sales. Things have simmered to a more sustainable growth rate of 33% in 2022. However, Aritzia’s decision to focus on online sales should continue to benefit the company in the long run.
The post 3 Growth Stocks Young Investors Should Buy Today appeared first on The Motley Fool Canada.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a board member of The Motley Fool. Dumb contributor Jed Lloren holds positions in Shopify. The Motley Fool holds posts and recommends Shopify. The Motley Fool recommends ARITZIA INC, Amazon and Goodfood Market Corp.
