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10 Good, Cheap Growth Stocks for Long-Term Investors: Morningstar

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Related: 10 Best Value Stocks for Long-Term Investors: Morningstar

Growth stocks are on an upswing this year after a rough time in 2022. The Morningstar US Growth Index outperformed the Morningstar US Value Index by more than 18 percentage points through mid-May, Susan Dziubinski, an investment specialist at the firm, reported in a blog post this week.

As to whether the growth stock rally will last, Dziubinski cited her colleague, U.S. market strategist David Sekera, who said investors should expect volatility ahead. “Looking forward, we suspect that the market will be entering a stage where economic and monetary headwinds will slow additional gains over the first half of the year,” he said.

Dziubinski wrote that investors would be wise to adopt a long-term investing mindset when buying growth stocks today. She noted that the best growth stocks in Morningstar analysts’ playbook to buy for the long term have several qualities in common. 

For one, the stocks are in the growth portion of the Morningstar style box.

For another, they are from companies that are included on Morningstar’s list of the Best Companies to Own for 2023. These companies have wide Morningstar economic moat ratings that are stable or growing and predictable cash flows, and they are run by management teams that make smart capital-allocation decisions.

Finally, the stocks look undervalued, as they are trading below their fair value estimates.

See the gallery for the best growth stocks to buy for the long term. Year-to-date performance is of midday May 25.