Bitcoin has its mojo back. After trading sideways for the first nine months of the year, the cryptocurrency has shot up since the start of October. In the space of less than two months, Bitcoin’s price has jumped from around $10,800 to $16,200 – a rise of 50%.
Personally, I’m not tempted to invest in Bitcoin. For me, it’s too speculative. It could go higher. However, with regulators set to crack down on crypto in a big way in the near future, I think it could just as easily crash, like it did in 2018.
To my mind, growth stocks remain a better investment than Bitcoin. This area of the stock market can be highly profitable, if the right stocks are chosen. A £2,000 investment in Fevertree Drinks six years ago, for example, would now be worth over £26,000. With that in mind, here’s a look at two growth stocks I like right now.
A monster growth stock
One growth stock that I believe has a lot of potential is online fashion retailer ASOS (LSE: ASC). The reason I like ASOS is that the company is benefitting from one of the most powerful trends on the planet today – the growth of online shopping.
Across the world, e-commerce is growing at a prolific rate on the back of increased smartphone penetration and technologies that make the online shopping experience smoother. As a leader in the online clothing space, ASOS is well-positioned for growth.
While ASOS started out only serving the UK market, it’s now a truly global operation with sales in around 240 countries. However, I think there’s plenty more to come from the group’s international operations. In countries such as the US, there’s plenty of market share to capture.
Investors have dumped ASOS shares recently on the back of Pfizer vaccine news. I see this share price weakness as a fantastic buying opportunity. Currently, the stock can be picked up on a forward-looking P/E ratio of just over 30. I think that’s a steal.
I expect the ASOS share price to keep rising in the years ahead as revenue and profits continue to grow.
Video game stock
Another growth stock I’d buy today is Keywords Studios (LSE: KWS). It’s an under-the-radar company that provides specialised services to video game development companies. Its customers include some of the most prominent names in gaming, including Electronic Arts (FIFA), Epic Games (Fortnite) and Activision Blizzard (Call of Duty).
Video gaming is absolutely booming today. Believe it or not, it’s now the largest form of entertainment in the UK. Looking ahead, the gaming industry is only likely to get bigger. Experts believe that by 2027, the industry could be worth about $300bn. I see Keywords Studios as a great way to profit from this industry growth. As major game developers continue to churn out exciting new games, it should benefit.
KWS issued a great set of full-year results in September in which revenue and earnings were up 17% and 13% respectively. However, since then, the share price hasn’t gone anywhere. I think buying now, while the share price is consolidating, could be a good move.
This growth stock isn’t cheap. The forward-looking P/E is about 38. But I think it has the potential to keep climbing as video gaming grows.
Edward Sheldon owns shares in ASOS and Keywords Studios. The Motley Fool UK owns shares of and has recommended Activision Blizzard. The Motley Fool UK has recommended ASOS, Fevertree Drinks, and Keywords Studios and recommends the following options: long January 2022 $75 calls on Activision Blizzard and short January 2022 $75 puts on Activision Blizzard. 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.