10 Growth Stocks to Buy for the Long Term: Morningstar

In 2023, the Morningstar US Growth Index outpaced the Morningstar US Value Index by some 26 percentage points, Margaret Giles, the firm’s content development editor, noted in a blog post this week. However, from the end of March through May 7, the growth index has declined by nearly 6%..

“Between this pullback and a few modest increases in our fair values, stocks within the growth category are now trading near fair value,” Giles’ colleague Dave Sekera observed. “However, within the growth category, stocks trading at much of a discount to fair value have become increasingly harder to find.”

Sekera said that with the rate of economic growth poised to slow over the next several quarters, Morningstar prefers to invest in higher-quality companies with wide economic moats that share these qualities:

They are in the growth portion of the Morningstar Style Box.
They are included in Morningstar’s best companies to own list for 2024, with predictable cash flow and management teams that make smart capital-allocation decisions.
They are trading near or below Morningstar’s fair value estimates.

See the accompanying gallery for the 10 most reasonably priced growth stocks from Morningstar’s best companies to own list. Year-to-date performance is as of May 9.