Analysts Reckon These Are the Big Growth Stocks

When you learn to trade at the stock market, you'll come across the concept of growth investing which is favored by those looking for astronomically rising earnings from their stock.

Motley Fool investors believe that February has some growth stocks on offer. Growth investing requires identifying the companies that have their competitive advantages that are underappreciated but could bring about a big boost in sales and earnings in the long term. Now that may require a preparedness to accept more uncertainty and risk, but these expert analysts believe these stocks could potentially give your investment much greater prospects than you'd have hoped for.

Analysts have identified Tencent Holdings ($TCEHY), Antero Resources ($AR) and Align Technology ($ALGN) as some of the stocks that are most promising in the market now.

Analyst Keith Noonan recommends Tencent Holdings. He believes the Chinese tech segment, of which Tencent is a part, is a great place to start for those looking for stocks with massive growth potential. China has a rapidly expanding middle class with a penchant for Internet engagement. The country also boasts one of the fastest growing economies in the world. And while there are many companies basking in China's tech boom, Tencent still manages to stand out as an investment opportunity.

One of the company's segments that are really booming is video games. Sales have been on the ascendancy 48% year over year. The company boasts hit titles such as Honor of Kings and League of Legends that have managed to accumulate millions of active users each month. This puts the company in a highly beneficial position thanks to the ongoing growth in the video game industry. The company also combines gaming with social networking that also takes it to the top of the related e-sports industry.

Tencent's WeChat messaging app is among the most popular of China's messaging services with close to a billion active monthly users globally. WeChat synergizes pretty well with the gaming business. That also presents many advantages in areas such as e-commerce, ride sharing and online payment in markets with high growth. It has a significant presence in each of these segments. These are all growth catalysts that could help generate long term earnings and sales momentum for Tencent, Noonan believes.

Antero Resources is preferred by analyst Matt DiLallo. This is one of the country's fastest growing natural gas producers and, judging by its rate of growth, it could grow from 18% in 2017 to 20% annually in the next three years. All this growth in these coming years would translate to massive free cash flow. Based on the current prices for oil and gas, DiLallo believes there could be at least $1.6 billion of excess cash the company could generate in the next five years, or even more if their recovery continues.

Despite these efforts, Antero trades at a discount when compared to its competitors while it should be drawing a premium valuation. Antero therefore needs to come up with some solutions. DiLallo believes the solution could include growing its free cash flow so as to buy back its stock. That could cause its shares to soar, since that has happened to many of the company's peers in the past year. The company is on target to generate significant excess cash in the coming few years to be able to buy back close to 30% of its shares that are outstanding at the present price.

The buyback makes DiLallo consider Antero a growth stock worth serious consideration this month. Its envious production growth rate puts it on course for some market-beating returns in the years to come.

Align Technology was the S&P 500's top-performing stock in 2017, which gained more than 130% that year and was more than 170% year to date. And interestingly, Align isn't a chipmaker or a biotech stock. It is involved in the dental field and manufacturers the Invisalign clear aligner for correcting teeth misalignment. Being clear, Invisalign aligners are invisible to others unlike the wire-and-metal braces. That's why they are preferred by dental patients. This has caused the company's revenue to soar recently.

In all four quarters of 2017, Align reported revenue that was an all-time high. It's got momentum, and analyst Kevin Speights believes this momentum can continue unabated. All this success for Invisalign has only given Align Technology access to 10% of the orthodontic market, so there's a lot more to gain. The company is also looking for expanding its market through development of new aligners for treating even more complex cases of malocclusion. And Align can reach towards overseas markets too that provide great potential for the Invisalign product.

With expert analysts' opinions you can clearly figure out what stocks to watch for in the long term, and what to buy right away depending on your trading strategy. You can also learn to trade with free stock trading offered by TradeZero with its advanced trading software. Contact us at +1 954-944-3885 or email support@tradezero.co.

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