Growth stocks have been rising for much of the year, although they have been more volatile of late. Investors last week swung from large-cap tech stocks into smaller tech stocks as expectations for a rate cut in September grew. But overall, growth stocks are still up this year, with the large-cap Vanguard Russell 1000 Growth ETF still up nearly 20% this year. The Vanguard Small-Cap Growth ETF rose about 6.7%. Which stocks remain attractively valued for investors to buy and hold over the next 10 years? CNBC Pro asked fund managers and other investors focused on growth stocks for some thoughts. Deere Greg Halter, director of research at Carnegie Investment Advisors, named three stocks that he says are worth buying right now. One of them is Deere & Company, a company that makes products such as agricultural and landscaping equipment. Holt said what’s exciting is its focus on the agricultural sector. “It is reported that the world’s population will grow from 8 billion to 10 billion in the next few decades. Everyone needs to eat, but the area of arable land is decreasing,” he said. He pointed to Deere’s automated agricultural services, which he said can apply chemical fertilizers and pesticides “more accurately and efficiently.” “Deere has historically been well managed and has a strong balance sheet,” Holt said. He added that because the company has been increasing dividends and engaging in share buybacks over the years, it is considered a “good allocator of capital.” “In the long run, ignoring the quarterly noise, Deere is well positioned for the long term and will not sell at its current overvalued price,” Holt said. Mastercard and Visa were the other two earmarked buys. Stocks are payment companies Mastercard and Visa. “Our view is that the use of credit cards and other non-cash transactions will continue to increase globally over the next few years,” he said, noting that both companies charge a small fee on each transaction. He added that they also continue to develop and invest in other fintech options to “remain relevant.” Holt said the two stocks’ current valuations “are not considered extreme.” “Both companies generate strong free cash flow, have solid balance sheets and have historically been good capital allocators,” he said. Nick Griffin, chief investment officer and founding partner of Munro Partners, pointed to two major technology companies: The names of the stocks, which he believes are not cheap in this market, are “cheap relative to their growth.” They are Amazon and Microsoft. He said any company currently trading with a price-to-earnings ratio below 1.5 is “pretty good.” “Amazon is growing faster than its P/E multiple, and Microsoft’s P/E multiple is about 1.5. Smaller stocks…are all trading…below 1.5,” he said. “When their net cash growth exceeds 30%, it’s not that expensive,” he added.
