3 High-Growth Stocks That Are Just Getting Started

Stocks that get on a roll tend to stay on a roll — a fact that has sparked an entire stock picking strategy known as “momentum investing.” And while the exact mechanism underlying this phenomenon remains under debate, there’s no doubt that momentum investing can in fact produce stellar returns on capital.

We thus asked three of our Motley Fool contributors which momentum stocks they think are worth buying right now. They picked…

Horizon Pharma (NASDAQ:HZNP)Baidu (NASDAQ:BIDU), and Okta (NASDAQ:OKTA). Here’s why.

More growth to come

George Budwell (Horizon Pharma): A little over two years ago, I recommended Horizon Pharma’s stock as a risky but attractive buy for growth-oriented investors. And even though this mid-cap pharma stock has gained nearly 50% in the intervening period, I still think it has a lot more room to run.

What’s the reason for my optimism? First and foremost, Horizon recently reported stellar late-stage results for its thyroid eye disease treatment teprotumumab — potentially giving the drugmaker two major growth products (Krystexxa and teprotumumab) capable of hauling in a combined $1.5 billion in annual sales at peak.

Secondly, I think it’s fairly evident that the market has yet to reward Horizon for its successful pivot to the orphan drug space over the last three years. Most orphan drug stocks, after all, trade at no less than eight times annual sales. Horizon’s shares, on the other hand, currently trade at less than half this figure. Now, Horizon does have a troubling past as a specialty pharma, but that chapter in the company’s life cycle appears to be coming to a close with this latest clinical success.

Where could this top biopharma stock be headed in the next two years? Horizon’s shares should continue to rise in response to teprotumumab’s commercial launch (assuming approval) next year and the market’s subsequent recognition of the company’s metamorphosis into a top-notch orphan drugmaker. In fact, I wouldn’t be surprised if Horizon’s stock gains another 50% by 2022 based on just these two factors.

A strong bet in China’s tech and content trends

Keith Noonan (Baidu): In addition to its core search and digital ad business and its burgeoning ventures in artificial intelligence, Baidu is also a big player in…

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