Just released: the 3 best growth-focused stocks to buy in January [PREMIUM PICKS]

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Our monthly Fire Best Buys Now are designed to highlight our team’s three favourite, most timely Buys from our growing list of growth-focused Fire recommendations, to help Fools build out their portfolios.

“Best Buys Now” Pick #1:

PayPal (NASDAQ:PYPL)

  • Its Q3 earnings showed revenues increasing by 6% at constant currency.
  • While the growth rate decelerated from the previous quarter, the company is focusing on profitable, “durable” growth, rather than a higher proportion of low margin processing volumes.
  • Its enterprise payments platform Braintree saw volume decline to 11% to 19%, but is “meaningfully contributing” to transaction margin dollar growth (an important profit measure) which grew 8% to $3.7bn.
  • The company has cut costs in recent years as part of an efficiency drive, helping operating margins move higher (which were 18.8% in the quarter). But as the business scales, further drastic cost cutting shouldn’t be necessary to support margin growth.
  • While the share has risen by 39% in the past 12 months, it’s currently trading at 17x trailing earnings, which still seems like a reasonable valuation for a growing, highly profitable business returning cash to its investors.

“Best Buys Now” Pick #2:

Redacted

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The post Just released: the 3 best growth-focused stocks to buy in January [PREMIUM PICKS] appeared first on The Motley Fool UK.

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Mark Stones and Ian Pierce own shares of PayPal. The Motley Fool UK has recommended PayPal.Â