Here are some growth stocks that have recent positive catalysts. All three companies are managed well, which drives their stocks to outperform over the long-term. They all have a tendency to grow earnings at above average rates, which drives the stock’s outperformance.
The Lower-Priced iPhone SE
Apple (AAPL) will expand its user base with the 4 inch SE model iPhone. It’s not that fans of the 6S and the 6S Plus will want to convert to the new SE model. However, owners of the iPhone 5S who prefer a 4 inch phone may be interested in the SE model for its improved 12MP camera and more powerful features (A9 chip, Apple Pay, stronger battery life, etc). My take is that the lower cost of the SE ($399 as compared to $650 for an iPhone 6S with 16GB) will also broaden Apple’s customer base. The lower cost of the SE is likely to attract new customers to Apple who wouldn’t have bought an iPhone at the higher price points.
The lower cost SE is a good product for the India and China markets. China has a number of low-cost smartphone producers such as Xiaomi, Huawei, and Meizu. The lower-priced SE model will compete with the lower-priced competitors in China. More people in China are likely to consider the SE with its lower price as compared to Apple’s previous models. Apple is an aspirational brand in China. Therefore, more China consumers are likely to aspire to own an SE model since it is more affordable.
The SE model is likely to sell well in India because of its powerful features and reasonable price. India is an emerging market where its citizens earn less on average than in more developed countries, so a lower cost iPhone makes sense. Apple is an aspirational brand in India as well. Therefore, if Apple can capture the top 2% of earners out of India’s population of over 1.2 billion, then that will represent sales of 24 million iPhones. That won’t happen all at once, but it illustrates the sales potential with a small percentage of the population in India.
