Growth stock investors have had a difficult year. The Federal Reserve’s decision to become more aggressive with interest rate increases, combined with the fact that all of the major US indexes entered correction territory in the first quarter, has weighed heavily on stocks that were previously flying high.
There’s also some good news. Because every significant market downturn or correction in the United States has been reversed by a bull market rally in the past, the present downturn is an excellent time to invest your money. If you put $300,000 into the following hammered down growth companies, there is a solid chance they will turn you into a millionaire by the year 2030, or sooner.
For patient investors, I’m almost certain that a beaten-down growth stock that will rebound 233% or more over the next eight years is social media platform Pinterest ( PINS 0.81%). The company’s shares have dropped 71% from their all-time high.
With COVID-19 on its way out, and most of the United States returning to some form of normality, the company’s monthly active users (MAUs) have been declining in each of the last three quarters. Pinterest’s previously sky-high share price has taken a beating without MAU growth.
However, for long-term investors, shellacking has been a boon in a variety of ways. To begin with, Pinterest’s historic MAU increase is still within typical ranges if you look over four or five years. It’s only natural that active user numbers would decline as a result of epidemic lockdowns, which produced an abnormally large and unsustainable increase in MAUs.
On a recurring basis, Pinterest is quite profitable and Wall Street expects it to more than double sales by mid-decade. A $300,000 investment that grows to $1 million by 2030 in my opinion would be a modest prediction.
Electric vehicle (EV) manufacturer Nio may turn investors into millionaires by the end of this decade with an initial investment of $300,000 (NIO 4.19%). Since mid-January 2021, shares of Nio have plummeted 67%.
Nio has been flogged in the past year or so for three reasons. The first is that the automotive sector is dealing with serious supply chain problems, which are limiting production and/or expansion possibilities. Second, in a rising-rate scenario, stock valuations have more importance, as evidenced by the fact that the (for now) money-losing Nio is being weighed down. Third, there have been fresh fears about Chinese stocks being kicked off of America’s major exchanges (Nio is based in Shanghai, China).
Nio’s ability to overcome supply chain difficulties has been remarkable, but what’s perhaps most amazing about the company is its manufacturing growth in the face of obstacles. It went from shipping less than 4,000 EVs per quarter to more than 25,000 in less than two years. Management thinks Nio may be able to deliver 50,000 electric vehicles each month before the year is out.
By 2024, Wall Street expects Nio to generate a per-share profit of $2.50. With a current share price of $22 and a remarkable development rate, it appears to be a screaming value