3 High Growth Stocks that Look Attractive

These 3 stocks reflect high growth opportunities for investors but are not necessarily that expensive. That kind of stock appeals to the type of investor that believes momentum investing may come back in fashion. 

These are some of the most aggressive growth stocks to buy now. They reflect huge potential growth in sales and/or their earnings. Moreover, some of these stocks have interesting covered call opportunities. 

Glaukos Corp (GKOS) 

This company focuses on glaucoma surgeries, which are on the increase as Baby Boomers age. Its medical technology and pharmaceutical business is focused on micro-invasive glaucoma surgical (or MIGS) sales. 

Its products (along with surgery) help address mild to moderate glaucoma. Glaucoma is caused by high pressure on the optic nerve and typically occurs in older people. Since the end of Covid-19, elective surgeries have rebounded, and this has helped Glaukos Corp.’s sales. 

Sales are rebounding and next year analysts forecast sales to rise by 14% to $312.9 million, according to a survey of 10 analysts by Refinitiv (seen in Yahoo! Finance). As a result, the stock has a forward price-to-sales (P/S) multiple of over 8x.

Moreover, investors should look carefully at covered call opportunities with this stock. For example, look at the option chain below.

This shows that the $60 strike price for Oct. 21, 2022, calls can be sold for $2.50. Here is what that means. An investor who buys 100 shares now at $48.25 for $4,825, can immediately collect $250 by selling the out-of-the-money calls with the $60 strike price that expires on Oct. 21. Assuming the calls fall to zero by expiration, the investor will make a $250 profit, a gain of 5.18%. That works out to an annualized return of 18.907% (i.e., 3.65 x 5.18%) assuming the investor can repeat this 3.65x in a year.

But, even if GKOS stock rises to over $60 per share, the investor will also make $11.75 per contract, or $1,175 for the 100 shares he bought to cover the sale of the call, a gain of 24.35%. In addition, the investor keeps the $250 already received. So, the total potential return in 100 days could be as much as 29.53% (i.e., 24.35% + 5.18%).

Livent Corp (LTHM) 

This company makes lithium compounds that are used in lithium-ion batteries and solid-state lithium metal batteries. Lithium prices are elevated as a result of the tremendous growth in battery electric vehicles (BEV) as well as the growing application of solid-state lithium metal batteries.

Analysts project sales will reach $1 billion in 2023, up from $420.4 million in 2021. Its valuation reflects that growth scenario. The stock trades for 10x historical sales, and 4x forecast sales for 2023. 

However, Livent is profitable and its P/E multiple is not excessive at 17.6x 2022 and 14x earnings for 2023, given its growth outlook.

Livent also has very profitable covered call plays. Look at this option chain.

It shows that investors can sell the $25.00 call options for Oct. 21 expiration at a price of $1.78. That represents a yield of 8.66% over the LTHM stock price today of $20.55. On an annualized basis that works out to an annualized return of 31.6% (i.e., 3.65 x 8.66%).

SiTime Corp (SITM) 

This company makes timing circuits used in semiconductor chips, including resonators and clock integrated circuits (ICs), and various types of oscillators used in ICs.

This puts its products in high demand and means it has huge potential revenue growth. For example, analysts surveyed by Refinitiv (Yahoo! Finance) see sales rising on average by 22% to almost $400 million. This means that sales will have almost doubled in two years. The same could happen by the end of 2024.

However, the stock's valuation is high at 10x sales for this year and 8x for next year, as well as 34x earnings for 2022 and 29x for 2023. So you are definitely paying up for that growth.

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