The big three U.S. indices are all trading at record levels on Tuesday despite the looming risks of the delta variant and inflationary pressure, leaving investors scrambling to find opportunities to make the best use of their money.
Growth stocks still have more room to run
According to ERShares’ Eva Ados, now is the time to invest in growth stocks, which is an unusual recommendation for times of inflationary fears and rising interest rates.
Ados pointed to examples like Snapchat and Square that are up 25% and 10%, respectively, after reporting quarterly results – an indication that the seemingly “priced to perfection growth stocks still have more room to run”.
Elaborating further on her reasons for the unorthodox outlook, she said on CNBC’s “Trading Nation”:
“Roughly 80% of the growth stocks have beaten estimates this earnings season. The same holds true for value stocks as well. What’s different, however, is that the value stocks tend to be flat after the earnings report, whereas growth stocks go up 2.0% on average. Growth stocks have high expectations but are still able to exceed them and surprise investors.”
Why Ados likes cybersecurity stocks
The chief investment strategist also highlighted that ransomware costs have more than doubled since last year as cybercriminals continue to target not one but multiple companies from around the world every minute. Such developments are fuelling a sharp increase in demand for cybersecurity companies.
“COVID-19 crisis and the associated work-from-home arrangements have accelerated cybersecurity problems because they made the individual endpoints, sitting at home, more vulnerable to cyber-attacks. Consequently, they turned a growth industry into a hypergrowth industry overnight. It’s a growth area that is not going to disappear anytime soon.”
Here’s two of the billionaire investor Cathie Wood’s top favourite growth stocks for 2021.
The post Here’s why ERShares’ Eva Ados recommends growth stocks appeared first on Invezz.
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Wajeeh Khan
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