Without doubt, it’s easier to buy and hold blue-chip stocks for the long-term. The revenue and cash flow outlook are stable and dividends boost total returns. However, it’s unlikely that blue-chip stocks will deliver 10x or 20x returns in five to seven years. This is entirely possible with long-term growth stocks to buy.
Of course, investors need to be very selective as the risk is high. It’s also unnecessary that all suitable business models survive.
Factors such as intense competition or extended industry headwinds can play spoilsport. However, if the stock selection is right, there is scope for massive value creation.
My focus is on three long-term growth stocks to buy with the business likely to be supported by positive industry tailwinds.
Through 2030, these stocks can deliver a minimum of 10x returns. I must add here that I had discussed three growth stocks to buy and hold through 2030 in May. I would add these growth stocks to that list of multibagger stocks.
Let’s discuss the company specific reasons to be bullish.
Lithium Americas (LAC)
Considering the expected lithium supply gap in the coming years, the metal is an attractive investment theme. Lithium Americas (NYSE:LAC) stock is attractive among long-term growth stocks to buy for multi-bagger returns.
High quality assets providing long-term cash flow visibility is the key reason to like Lithium Americas. To put things into perspective, the company’s Thacker Pass project is likely to be a cash flow machine.
The asset has an after-tax net present value of $5.7 billion and is likely to deliver an average annual EBITDA of $1.1 billion.
Further, the company has 44.8% stake in the Cauchari-Olaroz asset in Argentina. Phase one of the project has delivered first lithium in June 2023.
Capacity at this stage should be 40,000tpa of battery-quality lithium carbonate. Stage two should to add another 20,000tpa of lithium carbonate.
The company has received shareholder approval for split of U.S. and Argentia assets into two entities. This is likely to unlock value.
Pinterest (PINS)
Pinterest (NYSE:PINS) stock has gradually trended higher by 17% for year-to-date. Positive business developments have backed the uptrend, and I believe that PINS stock will be a value creator.
For Q2 2023, Pinterest reported revenue growth of 6% year-on-year basis. For the same period, EBITDA growth was 16%. I believe that the company’s EBITDA growth and margin expansion is likely to remain strong.
There are two reasons for this view. First, monthly active user growth for Q2 was encouraging at 8% with MAU growth in emerging markets at 10%.
The company’s average revenue per user in emerging markets increased from 10 cents to 12 cents. This is significantly lower as compared to the global ARPU of $1.53. Even with stable MAU, an increase in ARPU is likely to boost key margins.
It’s important to point out that Pinterest has focused on making the platform shipping friendly. With growth in MAU, I expect advertising revenue to support ARPU growth. I also like the fact that Pinterest is investing heavily in research and development. Platform innovation is likely to boost user growth.
Tilray Brands (TLRY)
Tilray Brands (NASDAQ:TLRY) stock has surged by 86% in the last one month. Two major news items have backed the rally from deeply oversold levels.
I believe that Tilray is among the names in the cannabis industry that’s positioned to survive and grow.
In a recent news, Tilray announced an agreement to acquire eight beer and beverage brands from Anheuser-Busch (NYSE: BUD). This acquisition will position Tilray as the fifth largest craft beer brewer in the U.S.
Further, with multiple acquisitions in the alcohol and beverage industry, the company has built a strong strategic infrastructure in the U.S. This is likely to help in boost cannabis on potential federal level legalization.
Tilray has also been delivering positive news from a financial perspective. The company expects to report positive adjusted free cash flow in financial year 2024. Of course, with acquisitions, revenue growth is likely to accelerate.
On the date of publication, Faisal Humayun did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.