3 top growth stocks to buy that I will double down on in 2023
The search for the best growth stocks to buy in 2023 is on. In my case, this list is relatively short and includes three names in which I have already invested.
When valuations fall like in 2022, investors need to ask relevant questions. Does this drop suggest that the poor performance is likely to continue? Can a company in question rebound regardless of the market price? And how long is the pain likely to last?
Unfortunately, we don’t have many answers to these questions, even with the three actions listed below. There are many external forces weighing on the market right now.
That said, I’ve gone for quality over hype with this list of growth stocks to buy, coming up with three names that I think most investors would agree are worth considering. account in any type of market downturn.
Restaurant brands (QSR)
Restaurant brands (NYSE:RSQ) is one of the growth stocks I’m most optimistic about right now. This is mainly due to the company’s core business model, which remains very defensive.
Restaurant Brands is the parent company of a number of popular quick service (i.e. fast food) restaurant chains. From Burger King to Tim Hortons, Popeyes Louisiana Kitchen and Firehouse Subs, Restaurant Brands has done a good job covering a wide range in this space.
From the company impressive fourth quarter and full year 2022 results highlight its status as one of the overlooked growth stocks to buy. Specifically, I am encouraged by the 9.3% year-over-year increase in fourth quarter revenue to $1.69 billion, with comparative sales up 8.4% at Burger King and 9.4% at Tim Hortons. Additionally, the company’s 2022 adjusted earnings per share rose 11.4% to $3.14 from $2.82.
It should be mentioned that Restaurant Brands has appointed formerDominos Pizza (NYSE:DPZ) CEO Patrick Doyle as Executive Chairman in November. Under Doyle’s leadership, Domino’s made tremendous progress. This included 28 consecutive quarters of comparable store sales growth and the company’s digital transformation. As for DPZ shares, they went from $12 per share to over $270 per share during Doyle’s tenure.
I think QSR stock is worth holding, especially for those worried that a period of economic uncertainty may continue. We all need to eat, and this company’s lower-cost dining options stand out.
Meta platforms (META)
Metaplatforms (NADSAQ:META) was a highly controversial title in 2022. The company’s metaverse spending, through its Reality Labs division, has led to a rift among investors. Many have called on CEO Mark Zuckerberg to drastically cut spending. He seems to be listening, at least in terms of the company’s otherwise bloated downsizing.
OWhile some believe most of Meta’s problems are self-inflicted, others attribute its struggles to the difficult macroeconomic environment. The company’s recent earnings call brought positive news that likely prompted some investors to once again adopt a more favorable view of the company.
After experiencing a significant decline last year, Meta Platforms stock has made a remarkable return in 2023, with shares up 68% year-to-date. While the stock is still down around 7% over the past 12 months, it has been a long-term winner, quintupling its price since going public just over a decade ago.
Undoubtedly, the economic challenges emerging in late 2021 have hampered Meta Platforms’ progress, as the company derives almost all of its revenue from digital advertising on its platform. This led to major rounds of cost reductions across the business. Zuckerberg called 2023 a “The year of efficiency” with the aim of making Meta a more agile organization. While it’s unclear exactly how many jobs will be lost and how much the Metaverse’s spending cut will be, it’s certainly attractive to investors.
I’m of the opinion that if Meta can get back to basics, it’s a cash flow machine that’s seriously undervalued at these levels. Currently, the stock is trading at around 23x earnings, which is very cheap from a historical perspective given Meta’s growth trajectory.
With a market valuation of $2.5 trillion, Apple (NASDAQ:AAPL) ranks as the most profitable technology company in the world. Its products and services are seamlessly integrated into a sticky ecosystem, delivering an unparalleled experience to its large user base.
Apple’s operational success has been exceptional, with the company’s growing market share in the smartphone market offering long-term investors heavy rewards. Of course, Macroeconomic challenges and constraints continue to impact Apple’s core business. That said, the company generated roughly $34 billion operating cash and distributed more than $25 billion to investors in its most recent quarter. And its services business posted record revenue of $20.8 billion.
The Oracle of Omaha itself is Apple’s largest shareholder. That’s about all investors need to know about why this growth stock is worth owning. If Warren Buffett gives the company so much credit, it’s worth a look.
I don’t know if the macro headwinds will subside in the coming quarters. But Apple’s business remains rock solid, and I think long-term investors would do well to consider buying at these levels.
As of the date of publication, Chris MacDonald holds a position with the AAPL, META and QSR. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publication guidelines.