To achieve substantial returns from the market, it's crucial to maintain an equal or overweight position in growth stocks.
While blue-chip stocks can offer consistent returns that beat the index, the extraordinary returns of 5x or 10x in a short period usually come from growth stories.
For investors starting early, exposure to growth stocks could be 60% to 70% of their portfolio, focusing on high-quality stocks expected to generate significant cash flows in the next five years.
In this article, I discuss seven growth stocks that could deliver sevenfold returns by 2028.
Holding these stocks for the long term is crucial, as abrupt selling can cause investors to miss out on potential multibagger growth stories.
DraftKings (NASDAQ: DKNG) has seen its stock surge by 132% in the last 12 months due to positive business developments.
With a large addressable market and a shift towards profitability, the long-term prospects of DKNG stock look promising.
DraftKings expects the total addressable market from existing states to reach $30 billion by 2028, with further growth expected as more states legalize online sports betting and iGaming.
Li Auto (NASDAQ: LI) is another high-conviction pick for multibagger returns among growth stocks. With a forward price-earnings ratio of 17.2 and revenue growth exceeding 100%, LI stock appears significantly undervalued.
Li Auto has a strong financial position, with substantial cash reserves and positive free cash flow.
The recent launch of the LI MEGA EV is expected to drive delivery growth in the coming quarters, supported by the company's financial resources and potential international expansion.
EHang Holdings (NASDAQ: EH) stock has surged by 50% in the last month after a correction, indicating the potential for multibagger returns.
The flying car industry is still in its early stages, and early movers like EHang have the potential to create significant value.
EHang has achieved several milestones, including receiving certification from aviation authorities and conducting successful commercial flight demonstrations.
The company's new eVTOL aircraft for global markets and healthy backlog point towards future growth.
Lithium Americas (NYSE: LAC) has also seen a surge in its stock price following an extended period of correction, driven by fundamental developments.
The U.S. Department of Energy approved a $2.26 billion loan for the Thacker Pass project, supporting the construction of the first phase of production and commercialization by 2027.
Thacker Pass has a long mine life and significant asset potential, making it a potential cash flow generator.
With the expected increase in lithium prices, LAC stock could see substantial growth.
Riot Blockchain (NASDAQ: RIOT) is a fundamentally sound Bitcoin miner positioned to deliver multibagger returns. With a zero-debt balance sheet and significant cash reserves, Riot has high financial flexibility for expansion.
The company is targeting aggressive hash rate capacity expansion, aiming to increase self-mining capacity to 100EH/s.
With Bitcoin trending higher, Riot's business could become a significant free cash flow generator.
Miniso Group (NYSE: MNSO) stock looks undervalued with a forward price-earnings ratio of 16.7 and offers a healthy dividend yield of 1.99%.
The global lifestyle retailer has been aggressively expanding its retail presence and reported strong revenue growth and margin expansion.
With a dynamic product portfolio and continued retail expansion, Miniso is well-positioned for growth and could be a significant value creator.
Curaleaf Holdings (OTCMKTS: CURLF) is an interesting cannabis growth stock with a strong presence in the United States and expanding operations in Europe.
Despite muted revenue growth in 2023, the company reported healthy adjusted EBITDA margin and operating cash flow.
Curaleaf expects 2024 to be a "catalyst year," with accelerated revenue and EBITDA growth.
With a focus on medicinal cannabis in European markets and a strong emphasis on research and development, Curaleaf is poised for growth.
In conclusion, these seven growth stocks have the potential to deliver significant returns over the next few years.
However, it's important for investors to exercise patience and hold these stocks for the long term to fully realize their potential.