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If we look at some data points on investing trends, it seems that long term investing is dead, but there are millionaire-making growth stocks to be had out there.
Equity holding periods have decreased in recent decades. Investors seek instant gratification. Long-term investing with patience creates wealth.
I must emphasize here that in a long-term uptrend for any stock, there’s likely to be intermediate corrections of 20% to 30%.
However, it’s important to focus on the business fundamentals and the long-term outlook than any knee-jerk reaction from the markets. Massive wealth can be created if investors hold good stories through the thick and thin.
Let’s therefore discuss seven millionaire-making growth stocks to buy at current levels. In my view, these stocks are worth holding at least until the end of the decade.
Li Auto (LI)
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Among the electric vehicle companies positioned to survive and grow, Li Auto (NASDAQ:LI) is among potential millionaire-making growth stocks.
Amid volatility, LI stock has trended higher by 11% in the last 12 months. Returns can be considered as good because the EV sector has faced growth challenges. At a forward price-earnings ratio of 13.5, LI stock looks deeply undervalued.
I must add here that Li Auto currently commands a market valuation of $25 billion. The company ended Q4 2023 with a cash buffer of $14.6 billion.
Further, for the quarter, free cash flow was $2 billion. This implies an annualized FCF potential of $8 billion. Clearly, the stock is trading at a massive valuation gap.
With a strong cash buffer, Li has been aggressively expanding its retail network in China. At the same time, the company continues to invest in technological advancement in vehicles and launch of new models.
Recently, Li L6, a five-seat premium family SUV was launched with a good initial response in terms of order booking.
Overall, with strong fundamentals and positive industry tail winds for the long term, LI stock is a potential multibagger.
Miniso Group (MNSO)
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Miniso Group (NYSE:MNSO) is another of the millionaire-making growth stocks to buy. MNSO stock trades at a forward price-earnings ratio of 19 even after an upside of 45% in the last 12 months.
Considering the revenue and earnings growth trajectory, the stock is trading at a valuation gap.
As an overview, Miniso is a lifestyle retailer with strong presence in China and expanding presence globally. The company differentiates itself through attractive pricing coupled with a portfolio of dynamic SKUs.
For Q2 2024, Miniso reported healthy revenue growth of 54% on a year-on-year basis to $541 million. For the same period, the adjusted EBITDA margin expanded by 200 basis points to 25.9%. Margin expansion was driven by favorable product mix and global supply chain optimization.
Miniso is targeting to open 900 to 1,100 stores annually between 2024 and 2028. Further, the company expects revenue growth at a CAGR of at least 20% during this period. Therefore, the outlook is positive and as cash flows swell, Miniso will be positioned to increase dividends at a robust pace.
Aker BP ASA (AKRBF)
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Aker BP ASA (OTCMKTS:AKRBF) is a hidden-gem that’s likely to be a massive value creator by the end of the decade. As an overview, Aker BP is an oil and gas exploration company with a focus on the Norwegian continental shelf.
AKRBF stock has been sideways in the last 12 months as oil remains subdued because of macroeconomic headwinds. This seems like an excellent opportunity to accumulate the 9% dividend yield stock trading at a valuation gap.
The first reason to like Aker is strong fundamentals. The company ended 2023 with a liquidity buffer of $6.8 billion. Further, a leverage ratio of 0.2 points to high financial flexibility for organic and acquisition driven growth.
The second reason to like Aker is quality assets. As of 2023, Aker reported 2P reserves of 1,716mmboe. The company had 2C resources of 809mmboe. With the portfolio having an attractive break-even of $35 to $40 per barrel, the assets are a cash flow machine.
Even with oil between $80 and $100 per barrel, Aker is positioned to deliver robust free cash flows. This will ensure sustained dividend growth and flexibility to aggressively invest in exploration.
Coupang (CPNG)
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Coupang (NYSE:CPNG) stock has rallied by 43% for year-to-date. The big upside has been backed by positive business developments. With move toward profitability and an expanding addressable market, I am bullish on CPNG stock being a massive value creator.
In a recent development, Coupang raised Wow subscription price by 58%. Citigroup believes this move is “highly profitable” for the South Korean retailer. The price increase is likely to have a positive impact of $160 million and $410 million on the adjusted EBITDA in 2024 and 2025, respectively.
From a long-term perspective, there are two points to note. First, within Korea, the e-commerce market is expected to swell to $563 billion in 2027 from $483 billion in 2023. Therefore, there is ample headroom for growth within the country.
Further, Coupang has already made inroads in other Asian markets. Emerging Asia and Southeast Asia are likely to be the key growth drivers for the company in the next five to 10 years.
With the acquisition of Farfetch, the company has entered the European luxury e-commerce market. Therefore, there are ample growth catalysts and CPNG stock is poised to surge higher.
DraftKings (DKNG)
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DraftKings (NASDAQ:DKNG) stock has surged by 111% in the last 12 months. DKNG stock is however worth accumulating on corrections for multibagger returns.
The company with focus on iGaming and online sports betting (OSB) has a big addressable market.
To put things into perspective, DraftKings believes that the total addressable market for OBS and iGaming was $20 billion (existing states) in 2023.
The market size is expected to swell to $30 billion by 2028. As OSB and iGaming is legalized in other states, the addressable market will get bigger. This provides ample headroom for growth in the coming years.
Another point to note is that DraftKings has moved toward profitability. For the year, the company expects adjusted EBITDA of $460 million.
Further, DraftKings has guided for adjusted EBITDA of $1.4 billion in 2026 and $2.1 billion by 2028. Of course, these estimates are for existing states. I therefore believe that EBITDA will be significantly higher than $2.1 billion by 2028.
Lithium Americas (LAC)
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Lithium Americas (NYSE:LAC) is another millionaire-making growth stock to buy and hold with patience. With the plunge in lithium price, LAC stock has been depressed.
This provides a golden entry opportunity. With an impending lithium shortage, it’s likely that the metal will trend higher in the coming years.
The first point to note is that Lithium Americas will commercialize its key asset only in 2027. Therefore, robust growth and cash flow upside is still few years away.
However, that should not discourage investors from considering exposure to the stock. The Thacker Pass project is a cash flow machine and as commercialization nears, I expect LAC stock to skyrocket.
To put things into perspective, Thacker Pass has an after-tax net present value of $5.7 billion. Further, the asset has a mine life of 40 years with annual EBITDA visibility of $2 billion once both phases are commercialized.
In the recent past, Lithium Americas has also received financing for the construction of the project. This is another catalyst for a rally relatively soon.
Leonardo DRS (DRS)
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Global defense spending increased at a robust pace of 6.8% on a year-on-year basis to $2.44 trillion in 2023. It’s likely that defense spending growth will remain strong considering geopolitical tensions.
It’s therefore a good time to remain invested in defense stocks. Leonardo DRS (NASDAQ:DRS) is among the emerging defense names to consider for multibagger returns.
It’s worth noting that DRS stock has been in an uptrend with returns of 43% in the last 12 months. However, considering the backlog growth and focus on innovation, I remain bullish on the stock for a sustained rally.
As of 2023, Leonardo reported an order backlog of $7.8 billion. The order intake in the last few quarters has been robust and points to accelerated revenue growth.
Coming to innovation, the company received the “prestigious 2024 Herschel Award for the development of a groundbreaking cooled infrared sensor.” This “unlocks the ability for advanced military and scientific capabilities.” With a strong balance sheet, healthy order backlog, and focus on innovation, DRS stock is easily among the most exciting millionaire-making growth stocks.
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.
E-Commerce, Consumer Discretionary, Automotive, Electric Vehicles, Energy, Renewable Energy, Battery, Lithium, Oil, Industrial, Precious Metals, Retail
