The Motley Fool

Forget bitcoin, these killer growth stocks might actually live up to the hype

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Gold medal
Image source: Getty Images.

As humans, we’re psychologically wired to enjoy stories. When there’s an opportunity to profit from them, we like them even more. 

The only trouble with this is that the history of investing is littered with examples of rubbish that is hyped to the heavens before crashing down to earth in flames (and taking our hard-earned money with it).

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…

And if you click here we’ll show you something that could be key to unlocking 5G’s full potential...

While tipping my hat to anyone who’s managed to make a profit from it, I’d include Bitcoin within this offending group. Blockchain technology might have value in the future, but the idea of purchasing something that has no inherent value doesn’t sit well with the Foolish philosophy of buying quality companies for the long term. Hence why I was so bearish on the cryptocurrency last December.

To be sure, separating the stock market wheat from the chaff is never easy. That said, I think there are two companies that stick out as being examples of businesses where the hype might actually be justified. 

Overvalued and overachieving

I’ve made no secret of my love for robotic process automation firm Blue Prism (LSE: PRSM). Having soared from its 78p IPO price to over 2200p in just over a couple of years, it remains my best-performing holding. I doubt I’m alone.

But here’s the thing: To date, Blue Prism hasn’t made a pound in profit. As a result of its ‘landgrab’ strategy, it’s also unlikely to do so for some time yet. Seen from this angle, it’s easy to see why some continue to mock its £1.5bn valuation.

The trouble is, Blue Prism continues to throw eggs in the faces of its critics. Only last week, the company revealed that its digital workforces — used to complete boring, monotonous tasks that are usually performed by humans — are now employed in over 1,000 organisations across 42 industries in 52 countries. That’s astonishing growth for a company that only came to market in March 2016.  

Given the benefits of automation are not hard to grasp (no mistakes, no holidays or sick leave, relatively low-cost, freeing up staff for more creative work), I suspect any attempt to pinpoint Blue Prism’s true valuation is proving more difficult by the day. That’s why the shares might continue their astounding rise for some time yet.

Despite many, including my Foolish colleague Roland Head, questioning its £225m valuation based on conventional metrics, advanced materials engineering group and graphene play Versarien (LSE: VRS) continues to be another hugely rewarding investment for those early to the party.

Contrary to most AIM stocks, the newsflow here rarely stops. Over the last couple of months, the firm has inked agreements with audio equipment firm Media Devil and an unnamed global sports and fashion goods manufacturer. More recently, it was announced that the company had begun collaborating with South Korean-based AXIA Materials, with the view to developing “graphene-enhanced composite materials and smart graphene devices“, specifically related to smart buildings and electric vehicles. 

While it’s frighteningly easy to become complacent with high-performing shares — and the old adage of ‘never going broke from taking a profit’ has growing relevance here — these deals certainly give substance to CEO Neill Ricketts’s view that there now exists a “global demand” for Versarien’s products.

With the prospect of up to 24 new China-related deals being announced in the near future, however, I’m staying put.

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic…

And with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be daunting prospect during such unprecedented times.

Fortunately, The Motley Fool is here to help: our UK Chief Investment Officer and his analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global lock-down…

You see, here at The Motley Fool we don’t believe “over-trading” is the right path to financial freedom in retirement; instead, we advocate buying and holding (for AT LEAST three to five years) 15 or more quality companies, with shareholder-focused management teams at the helm.

That’s why we’re sharing the names of all five of these companies in a special investing report that you can download today for FREE. If you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio, and that you can consider building a position in all five right away.

Click here to claim your free copy of this special investing report now!

Paul Summers owns shares in Blue Prism and Versarien. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.