Investing for the long term ensures that you can effectively compound your money over time.
To do so successfully, you need to select strong growth stocks that can continue to increase their revenue and profits.
These businesses should ideally possess a strong competitive advantage and possess catalysts that can ensure their continued prosperity.
We highlight four compelling US growth stocks with the above attributes that are perfect for owning over years or decades.
Netflix (NASDAQ: NFLX)
Netflix is a market leader in streaming television and was the most nominated brand for the recent 76th annual Primetime Emmy awards, which demonstrates the breadth and quality of its programming.
The company reported a sparkling set of earnings for the first half of 2024 (1H 2024).
Revenue rose 15.8% year on year to US$18.9 billion.
Operating profit jumped 47.8% year on year to US$5.2 billion while net profit surged 60.4% year on year to US$4.5 billion.
The streaming TV giant also generated healthy positive free cash flow of US$3.3 billion for 1H 2024, dipping slightly below the US$3.5 billion churned out a year ago.
Global streaming paid membership numbers continue to increase.
The second quarter of 2024 (2Q 2024) saw memberships rise to 277.65 million, up 16.5% year on year as eight million members were added during the quarter.
Netflix anticipates that revenue can grow by close to 14% year on year to US$9.7 billion for 3Q 2024 while net income will come in around US$2.2 billion, up more than 50% year on year.
Management has reiterated its commitment to increase investment in its programming to generate content that appeals to an audience with different tastes and moods.
On the games front, Netflix plans to debut a multiplayer game based on the Squid Game universe later this year, to time it with the launch of the second season of this popular Korean TV series.
Tractor Supply Company (NASDAQ: TSCO)
Tractor Supply is the largest rural lifestyle retailer in America with 2,254 stores located in 49 states as of 29 June 2024.
The company also owns and operates 205 Petsense by Tractor Supply stores that sell products and services for pet owners.
Tractor Supply reported a resilient set of earnings for 1H 2024.
Sales inched up 2.1% year on year to US$7.6 billion, driven by new store openings but offset by a decline in comparable store sales.
Operating and net profit increased by 2.6% and 3.2% year on year, respectively, to US$824.9 million and US$623.4 million.
The retailer paid out a total dividend per share of US$2.20, higher than the prior year’s US$2.06.
Last year, Tractor Supply updated its new long-term store target from 2,800 to 3,000 and plans to open 90 new stores per year beginning 2025.
Hal Lawton, CEO of the company, believes that the business still has a long growth runway with a total addressable market of more than US$180 billion.
Crowdstrike (NASDAQ: CRWD)
Crowdstrike is a cybersecurity firm that offers a platform called Crowdstrike Platform that identifies threats and cyberattacks and provides identity, data, and end-point protection.
The company reported a stellar set of earnings for the six months ending 31 July 2024 (1H FY2025).
Revenue jumped 32.3% year on year to US$1.9 billion and the business generated an operating profit of US$20.6 million, reversing the prior year’s operating loss of US$34.8 million.
Net profit stood at US$89.8 million, registering a tenfold year on year increase from the US$8.9 million reported a year ago.
Crowdstrike generated a positive free cash flow of US$596 million for 1H FY2025, up nearly 43% from a year ago.
Management sees a total addressable market of US$100 billion for the company’s artificial-intelligence native security platform, providing ample opportunities for further growth.
This market is set to grow significantly to US$225 billion by 2028 as more organisations realise the importance of cybersecurity and in protecting their systems from hackers and malware.
Sea Limited (NYSE: SE)
Sea Limited is a technology company made up of three divisions – gaming (Garena), e-commerce (Shopee), and digital financial services (SeaMoney).
The business reported a mixed set of results for 1H 2024.
Revenue rose 22.9% year on year to US$7.5 billion, aided by a year-on-year increase in e-commerce revenue and offset by a year-on-year decline in gaming revenue.
However, operating profit plunged by 62.4% year on year to US$154 million due to higher sales and marketing expenses.
Net profit stood at US$58.2 million, down nearly 86% year on year.
Despite the sharp fall in net profit, Sea Limited continued to maintain a sizable lead over its competition for Shopee and is revising its guidance upwards for its e-commerce business.
Gross merchandise value stood at US$23.3 billion for 2Q 2024, up 29.4% year on year while gross orders stood at 2.5 billion, nearly 39% higher year on year.
Its Garena unit also saw continued growth in quarterly active users which rose from 544.5 million in 2Q 2023 to 648 million in 2Q 2024.
Quarterly paying users climbed 22% year on year to 52.5 million.
The company’s star title, Free Fire, continues to be an evergreen franchise with a highly-engaged user base.
This game was the most downloaded mobile game globally in 2Q 2024, according to Sensor Tower.
More than 100 million daily average users played Free Fire throughout the quarter.
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Disclosure: Royston Yang owns shares of Tractor Supply Company.
