Like most investors, I tend to give the majority of my attention to mature, well established stocks. It is easy to feel comfortable investing in companies like Procter & Gamble (PG) or Microsoft (MSFT) because they have been around long enough to have a good understanding of their underlying business, and how well management is able to adapt and pivot to changing market conditions.
It is harder to get behind young stocks since there is no long-term history to demonstrate the company’s ability to navigate various economic landscapes. Recent years have been strong for the overall market, so many new stocks have also been strong, but it is hard to really know if these stocks have shown strength in sympathy to the overall market, or if they have what it takes to thrive when economic conditions start to deteriorate.
Young stocks definitely have additional risk factors, but the added risk also creates additional upside potential. Risk and reward go hand in hand, so if you are able to find young stocks to put your money to work in, the upside down the road can be huge. As such, you should always be on the lookout for less-mature companies with the prospects of a long and bright future.
You want to make sure you find stocks that offer something people want, and will reasonably remain in demand moving forward. Earnings need to be on the rise, and recent sentiment needs to be bullish.
Here are five stocks that are relatively young in relation to the overall market that have bright futures.