It takes time and patience to construct a robust investment portfolio.
Most investors include a healthy mix of growth stocks and dividend stocks in their portfolios.
Dividends provide a source of passive income that flows directly into your bank account.
Growth stocks, on the other hand, help to increase the value of your investment portfolio and help it to beat inflation.
They also help to grow your retirement pot of gold to better prepare you for your golden years.
There is no shortage of growth stocks in the US market and we highlight four of these that you may wish to include in your buy watchlist.
American Eagle Outfitters (NYSE: AEO)
American Eagle Outfitters, or AEO, is a speciality retailer offering trendy apparel, accessories and personal care products under its American Eagle and Aerie brands.
The company operates stores in the US, Canada, Mexico, Hong Kong and Japan and ships its products to 80 countries worldwide.
For the first nine months of 2023 (9M 2023), AEO saw revenue inch up 2.6% year on year to US$3.6 billion.
Operating profit climbed 23.1% year on year to US$213.5 million, but would have increased by 35.3% year on year if an impairment charge was excluded.
Net profit more than doubled year on year from US$70.5 million to US$163.7 million.
AEO ended the quarter with 854 stores in the US, down from 931 back in 2019.
The company has a value creation plan to grow its Aerie brand to more than US$2 billion in revenue.
At the same time, management will also drive sustainable and profitable growth at American Eagle.
For Aerie, the medium-term plan is to expand its market and acquire new customers while introducing activewear product extensions.
Coupang (NYSE: CPNG)
Coupang is an e-commerce player headquartered in South Korea.
The company offers a variety of services including same-day and next-morning delivery of general merchandise, groceries, and prepared foods.
For 9M 2023, Coupang saw revenue climb 16.8% year on year to US$17.8 billion.
The e-commerce outfit generated an operating profit of US$341.9 million, a sharp reversal from the operating loss of US$195.4 million incurred in the prior year.
Net profit came in at US$327.3 million for 9M 2023.
Coupang also generated a positive free cash flow of US$1.4 billion for the same period, reversing the negative operating cash flow last year.
For the third quarter of 2023 (3Q 2023), Coupang saw its active customers increase by 14% year on year to 20.4 million.
Revenue per active customer also improved 7% year on year to US$303.
Deckers Outdoor Corp (NYSE: DECK)
Deckers markets and distributes footwear, apparel, and accessories for casual lifestyle use or high-performance activities.
The company’s portfolio of brands includes UGG, Hoka, Teva, and Sanuk and its products are sold in more than 50 countries worldwide.
For the first six months of fiscal 2024 (1H FY2024) ending 30 September 2023, Deckers’s revenue rose 18.6% year on year to US$1.8 billion.
Operating profit jumped 60.4% year on year to US$295.4 million while net profit soared 65.4% year on year to US$242.1 million.
For 1H FY2024, Deckers generated a positive free cash flow of US$64.1 million, a reversal from the negative free cash flow of US$261.1 million a year ago.
Revenue guidance for FY2024 was raised to US$4 billion by management while earnings per share guidance was upgraded to a range of between US$22.90 to US$23.25.
Decker’s long-term strategy is to grow HOKA into a multi-billion dollar brand in the performance athletics space.
Management also plans to tap into its direct-to-consumer channel to acquire and retain more customers while making strategic investments in international markets to grow its presence.
InterContinental Hotels Group PLC (NYSE: IHG)
Intercontinental Hotels Group, or IHG, is a global hospitality company with more than 6,200 hotels around the world.
Its portfolio of hotel brands includes Regent, Hotel Indigo, Crowne Plaza, Holiday Inn, Atwell Suites, and Iberostar.
Around 70% of its hotels are franchised where IHG will collect royalty fees with around 28% managed directly where the company earns base and incentive management fees.
For the first half of 2023 (1H 2023), revenue climbed 23% year on year to US$1 billion while operating profit jumped 27% year on year to US$479 million.
The company’s adjusted earnings per share surged by 50% year on year to US$1.827.
IHG also increased its interim dividend by 10% year on year to US$0.483.
For 3Q 2023, revenue per available room (RevPAR) grew 10.5% year on year and 12.8% against 2019.
Its new midscale brand, Garner, is now ready to be franchised.
Management sees structural growth drivers for the business including rising GDP, a growing middle-class population, and people’s desire to travel and interact with others.
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Disclosure: Royston Yang does not own shares in any of the companies mentioned.
