Our Pick Of The Best Growth Stocks & Shares

Apple is one of the world’s largest technology companies, headquartered in the US and traded on the large-cap Nasdaq 100 index.

The company manufactures personal computers, tablets, smartphones, and other consumer electronic devices, with brands including the iPhone, iPad and Mac. Apple also provides software-related services and digital content through subscription-based services.

Apple is viewed by many as the epitome of a growth stock, having tripled earnings per share since 2016. It’s also rewarded shareholders with a share price increase of more than 200% over the last five years.

However, the company has recently suffered something of a reverse. Laith Khalaf, head of investment analysis at AJ Bell, comments: “Apple shareholders probably aren’t best pleased after seeing the stock shed $1 trillion in market cap, or one-third of its value, over the past twelve months or so.

“A stronger dollar, a softer economy, sagging consumer confidence, supply chain disruption in China hurting iPhone 14 shipments, and competition are all possible reasons for the slump in Apple’s shares.”

Unlike Meta, Amazon, Alphabet and Microsoft, Apple stood alone in not issuing a profit warning or missing analysts’ expectations during 2022. As a result, the company still trades at a premium to the broader US market.

Looking ahead, however, uncertainty remains as to the direction of Apple’s share price. A boost in consumer confidence and spending could drive upwards momentum but Mr Khalaf warns: “Equally, there is a danger that lofty valuations have simply caught up with the tech sector.”

Apple Stock Price

Denali Therapeutics Inc is a Nasdaq-listed biopharmaceutical company focused on the discovery and development of therapies for patients with neurodegenerative diseases, including Alzheimer’s disease, Parkinson’s disease, and amyotrophic lateral sclerosis.

Tom Slater, investment manager at Scottish Mortgage Investment Trust, says: “Denali is close to solving one of the biggest medical challenges of our time, defeating brain diseases such as Alzheimer’s, Parkinson’s and motor neurone disease.

“Denali has seven medicines targeting the causes of brain degeneration in clinical trials, three of which are at the last stages before approval. Denali’s mission is to devise ways of getting this medicine through the brain’s natural defence system – a ‘blood brain barrier’ made up of 400 miles of blood vessels – which until now has thwarted advances in treatment.

“The company’s scientists have already developed a mechanism to get those drugs into the brain more effectively. Denali’s strategy has been to build a pipeline of multiple medicines and a platform which, if successful, will open up all of the nervous system, not just for neurodegenerative disease.”

Digital 9 Infrastructure is a UK-based investment company which invests in assets such as sub-sea fibre, data centres, terrestrial fibre and wireless networks.

Victoria Hasler, head of fund research at EQ Investors, says: “The company is currently trading at a 27% discount to its net asset value.

“Owning real assets gives the fund intrinsic value. The fund was sold off last year, partly due to the general sell-off in infrastructure funds, but also because the named managers left. While we held the managers in high esteem, we think the level of sell-off is unwarranted given that the fund is managed by Triple Point. which is one of the biggest infrastructure managers in the world.

“We believe that the team who remain in place at Triple Point are more than capable of managing this portfolio of assets. In addition, many of the underlying contracts, for example at the data centres, have an explicit or implicit link to inflation, which should help to protect the fund’s revenues if inflation remains high.”

Moderna Inc is a Nasdaq-listed biotechnology company focused on developing messenger ribonucleic acid (mRNA) therapeutics and vaccines.

Tom Slater at Scottish Mortgage Investment Trust, says: “Moderna is pioneering the production of vaccines using mRNA. We think of this as a set of instructions that teaches our bodies to protect us against a virus. The company hopes to use this innovation in medicine production to design cures for the so-called ‘big four’ killers – cardiovascular disease, cancer, infectious diseases and autoimmune diseases.

“With 48 programmes currently in development, the Covid vaccine was only Moderna’s opening act, which helped to validate the science behind mRNA.

“While small in comparison to the giant pharmaceutical companies, Moderna is unrestrained in its ambitious growth plans, hoping to provide ‘predictable, replicable drugs in abundance’, according to the company’s chief executive officer, Stéphane Bancel.”

Netflix is a leading entertainment provider, headquartered in the US and listed on the large-cap Nasdaq 100 index.

The company offers subscription-based streaming services, with over 230 million paid memberships in 190 countries. Netflix acquires and licenses television and film content, as well as producing original programmes.

James Dowey, co-manager on the Liontrust Global Innovation Team, comments: “Real innovation is all about the hard work of pushing down prices or raising quality for customers.

“Netflix is the real deal, having driven down the price of subscription television by 80-90% compared with traditional cable. The beauty of this is that dramatically lower prices expand the market and Netflix has so far accrued 230 million subscribers globally.”

The company’s share price had more than doubled over a two-year period to hit a high of almost $700 in late 2021. However, its fortunes reversed thereafter, with its share price in 2022 dipping by 70% from that high.

However, Netflix has taken positive action when faced with a challenging economic climate and a dip in consumer spending.

Mr Dowey adds: “Following slowing subscriber growth, Netflix has done what it does best: a 50% cheaper ad-supported tier at, and here’s the best part, no less profitability given the advertising revenues they will earn.

“At this value-for-money, we do not see why Netflix cannot eventually reach 500 million or even a billion global subscribers. This is the kind of long-term growth that moves the dial.”

Netflix Stock Price

Planet Fitness is an operator of fitness centres, headquartered in the US and listed on the New York Stock Exchange.

The company operates over 2,000 health club franchises across the US, Canada, Mexico and Australia, with over 16 million members. The low-cost subscription fee model is designed to appeal to a broad demographic, including younger and cost-sensitive customers.

James Dowey, co-manager on the Liontrust Global Innovation Team, says: “We refer to Planet Fitness as the ‘Aldi’ equivalent of US gyms. The average gym membership in the US is $50 per month and, by comparison, a fancy Equinox membership costs $250. By stripping out everything but the basics from the cost structure, Planet Fitness is just $10.”

Planet Fitness has delivered some impressive results, including 53 consecutive quarters of same-store sales growth (sales of stores open more than a year). This has led to a doubling in its share price over the last five years.

Mr Dowey adds: “Planet Fitness is expanding the market for gyms to the three-quarters of Americans who have never had a gym membership before, and at the heart of this is Planet’s ‘no judgment’ inclusive ethos.

“Indeed, nearly 90% of overall new gym members in the US over the past decade are Planet Fitness members.”

In terms of outlook, Planet Fitness has significant scale advantages, with 60% more gyms in the US than the next 10 largest competitors combined, which should drive profitability.

The company is also looking to expand into Europe, where it believes its low-cost, ‘get off the couch’ pricing model will attract new members.

Mr Dowey comments: “From here, we think it can double its US business and expand very significantly internationally.”

Rightmove is a FTSE 100-listed property portal whose main aim is to make home moving easier within the UK. Over the past 21 years its services have changed the way that Brits search and research the property market.

Alexandra Jackson, fund manager at the Rathbones UK Opportunities fund, says: “Rightmove holds a strong monopoly position. Pretenders have come and mainly gone over the last two decades, while Rightmove has retained its market share of property hunters – over 80%.”

“Estate agents have little choice but to pay to advertise their listings on Rightmove.com.

“As you would expect, Rightmove is at the forefront of innovation in the property sector space, for example, with video tours and digital tenant referencing. The company generates a lot of cash, with limited reinvestment needed, so is usually buying back its own shares, therefore enhancing its earnings per share.”

“Concerns over the UK housing market may impact the company’s share price. But, operationally, Rightmove may do even better when the market is a little tougher. This is when agents really need to maximise their leads.”

Schroder Big Society Capital Social Impact Trust is a UK-based investment trust which invests in assets which have a sustainable financial return, while providing a high level of social impact by solving some of the biggest social issues the UK faces. These include social housing, refugee integration and providing care for vulnerable children.

Victoria Hasler, head of fund research at EQ Investors, says: “This is a relatively small investment trust allowing investors to access specialist private market impact investments. The portfolio owns a diversified mix of assets with low volatility, and which do not tend to trade in line with conventional equity and bond markets.

“The company is currently trading at a 9.5% discount to its net asset value, with the share price having been hurt in the general equity market sell-off of 2022, while the investments – often backed by government contracts – were much more stable.”

“We believe that the discount is too high given the quality of the investments, and think this could be a good opportunity for investors who also wish to create a positive social impact with their investments.”

Team17 is a UK-based, AIM-listed, video game developer and publisher. The company supports both owned first-party intellectual property (IP) and third-party IP in the development and publishing of games.

Alexandra Jackson, fund manager at the Rathbones UK Opportunities fund, says: “Several highly-rated video games developers have issued profits warnings recently, blaming a congested release schedule at the back end of 2022.

“However, there have been no such issues for Team17. Its diverse back-catalogue of more than 100 family friendly, niche, independent games is modestly priced and continues to sell well. This helps to smooth out the lumps and bumps of a blockbuster release schedule.

“Watch out for Marauders, the company’s latest release, which is getting positive reviews and sales. We expect more titles to be brought in-house, utilising slack in Team17’s balance sheet. In Debbie Bestwick, the business has a strong founder/chief executive who’s both incentivised and passionate.”

Zytronic is a developer of touch technology products, headquartered in the UK and listed on the AIM All-Share index of the London Stock Exchange.

The company develops and manufactures touch sensor products and optical filters for electronic display products. Its customer base spans the leisure and retail, industrial and financial sectors.

However, Zytronic’s share price has more than halved over the last five years. Laith Khalaf at AJ Bell, says: “Zytronic has suffered a difficult couple of years, thanks to the crackdown on gaming terminals in betting shops, bank branch closures and falling numbers of ATMs, as well as COVID.”

Although micro-cap shares are riskier than their larger peers, they can also offer substantial growth potential. Mr Khalaf adds: “Zytronic has been through some big swings in sales and profits since its stock market debut in 2000 and emerged from them all, thanks to its healthy balance sheet.”

The company’s current net cash position of £6 million represents nearly half of its market capitalisation, offering some downside protection in the event of difficult trading conditions.

In terms of outlook, it remains to be seen whether Zytronic can continue to maintain sales growth in its gaming and vending divisions, as well as manage ongoing supply chain issues.

Mr Khalaf comments: “It may be asking a bit much to expect net profit to return to 2017’s prior peak but any movement in that direction could leave the shares looking attractive, given the modest market cap.”