The search for top growth stocks to buy in 2023 is on. In my case, this list is relatively short, and it includes three names I’m already invested in.
When valuations drop as they did in 2022, investors need to ask some pertinent questions. Does this decline suggest poor performance is likely to continue? Can a company in question rebound from whatever the market is pricing in? And just how long is the pain likely to last?
Unfortunately, we don’t have many answers to these questions, even with the three stocks listed below. There are a lot of external forces weighing on the market at the moment.
That said, I’ve gone for quality over hype with this list of growth stocks to buy, putting forward three names I think most investors would agree are worthy of consideration in any sort of market downturn.
Restaurant Brands (QSR)
Restaurant Brands (NYSE:QSR) is among the growth stocks I’m most bullish on right now. That’s mainly due to the company’s core business model, which remains highly defensive.
Restaurant Brands is the parent company of a number of popular quick-service (i.e., fast-food) restaurant chains. From Burger King to Tim Hortons, Popeyes Louisiana Kitchen and Firehouse Subs, Restaurant Brands has done a good job of covering a wide spectrum in this space.
The company’s impressive Q4 and full-year 2022 results highlight its status as one of the overlooked growth stocks to buy. Specifically, I’m encouraged by the 9.3% year-over-year increase in fourth-quarter revenue to $1.69 billion, with comparative sales up 8.4% at Burger King and 9.4% at Tim Hortons. Furthermore, the company’s 2022 adjusted earnings per share increased 11.4% to $3.14 from $2.82.
It’s worth mentioning that Restaurant Brands appointed ex-Domino’s Pizza (NYSE:DPZ) CEO Patrick Doyle as its executive chair in November. Under Doyle’s leadership, Domino’s made huge strides. This included 28 consecutive quarters of same-store sales growth and the company’s digital transformation. As for DPZ stock, it surged from $12 a share to more than $270 a share during Doyle’s tenure.
I think QSR stock is worth owning, particularly for those who are concerned that a period of economic uncertainty will continue. We all need to eat, and this company’s lower-cost dining options stand out.
Meta Platforms (META)
Meta Platforms (NADSAQ:META) was a hotly debated stock in 2022. The company’s metaverse spending, via its Reality Labs division, has led to a fissure among investors. Many have called for CEO Mark Zuckerberg to cut spending dramatically. He appears to be listening, at least in terms of reducing the company’s otherwise bloated headcount.
While some believe that most of Meta’s issues were self-inflicted, others attribute its struggles to the challenging macroeconomic environment. The company’s recent earnings call brought positive news that likely caused some investors to take a more favorable view of the company again.
After experiencing a significant decline last year, Meta Platforms’ stock has made a remarkable comeback in 2023, with shares up 68% year to date. While the stock is still down around 7% over the past 12 months, it has been a long-term winner, quintupling in price since it went public a little over a decade ago.
Undoubtedly, the economic challenges that emerged in late 2021 have hindered Meta Platforms’ progress, as the company derives almost all its revenue from digital advertising on its platform. This has led to significant rounds of cost-cutting at the company. Zuckerberg labeled 2023 the “Year of Efficiency,” with an aim of making Meta a more agile organization. While it’s unclear just how many jobs will be lost, and what the reduction in metaverse spending will be, this is certainly enticing to investors.
I’m of the view that if Meta can get back to basics, this is a cash flow machine that’s really undervalued at these levels. Currently, the stock trades at around 23 times earnings, which is very cheap from a historical perspective considering Meta’s growth path.
With a market valuation of $2.5 trillion, Apple (NASDAQ:AAPL) ranks as the most profitable technology corporation in the world. Its products and services are seamlessly integrated within a sticky ecosystem, delivering an unmatched experience to its large user base.
Apple’s operational success has been outstanding, with the company’s growing market share in the smartphone market providing long-term investors with hefty rewards. Of course, macroeconomic challenges and constraints continue to impact Apple’s core business. That said, the company generated roughly $34 billion in cash from operations and distributed more than $25 billion to investors in its most recent quarter. And its services business saw record revenue of $20.8 billion.
The Oracle of Omaha himself is Apple’s largest shareholder. That’s about all investors need to know with regard to why this growth stock is worth owning. If Warren Buffett puts this much credence behind the company, it’s worth taking a look at.
I’m not sure if macro headwinds will subside in the coming quarters. But Apple’s business remains rock-solid, and the stock is one I think long-term investors would do well to consider buying at these levels.
On the date of publication, Chris MacDonald has a position in AAPL, META and QSR. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.