With the global economy recovering fast, this may be the ideal time to invest in quality growth stocks that are still trading at reasonable valuations. Daimler (OTC:DDAIF), Regeneron (NASDAQ:REGN), POSCO (NYSE:PKX), and Covestro (COVTY) are examples of names that possess solid growth attributes and are trading at valuations that are lower than their peers. So, we think it could be wise to scoop up their shares before their prices rise to justified levels. Read on.Even though investors rotated away from expensive growth stocks earlier this year, the solid economic recovery has been driving a renewed and increasing focus by investors on growth stocks given their ability to grow faster, capitalizing on supportive economic policies. The revival of investor interest in growth stocks is evident in the SPDR Portfolio S&P 500 Growth ETF (SPYG) and Vanguard Growth Index Fund ETF Shares’ (VUG) 3.4% and 4% gains, respectively, over the past month. This compares to the SPDR S&P 500 Trust ETF’s (SPY) 1.3% returns over the same period.
The United States’ gross domestic product (GDP) increased at a 6.4% annual rate in the first quarter of 2021. And according to The Conference Board, the U.S.’ real GDP is expected to rise 9% in the second quarter of 2021. Furthermore, even though the Federal Open Market Committee (FOMC) said on June 16 that at least two interest rate hikes are expected in 2023, interest rates have been left at near-zero for now.
So, we think it could be wise to bet on stocks that are still out of favor but possess solid growth attributes. We think Daimler AG (DE:DAIGn) (DDAIF), Regeneron Pharmaceuticals, Inc. (REGN), POSCO (PKX), and Covestro AG (COVTY) fit the bill. They are currently trading at discounts to their peers but hold immense growth potential.