E Thoughts On Growth Stocks: Apple, Sherwin-Williams, Disney

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.

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Disclaimer:This article represents the author's opinions.  Investors should do their own due diligence and consult with an investment advisor to determine which stocks are right for ...

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David P. Matthews 5 years ago Member's comment

Looking forward to more - added you to my follow list.

Joe Economy 5 years ago Member's comment

Although climbing in the past month or so, I do think that Apple's more or less stagnant stock will continue to edge up and down based on rumors of new and improved versions of the IPhone. But I will say it again that I think Apple needs to move beyond its dependency on a single product and branch out to other ideas. In car media might be the growth phenomenon that it needs to boost the company. There are a number of really good competitors out there including Android and Parrot so the in car media space remains to be played out in full as yet. I do believe Disney is a broader investment choice with more room to grow as it grows market strength in China and the developing world. It too is vulnerable to the successes of its latest movie productions which can be hot or miss but in the long run, its a better growth stock. Worryingly also is that Disney's stock is rather stagnant down around 5% year to date and seemingly stuck around the $100 level. Stock analysts are also cautious with 14 out of 34 recommending only a hold position, with 5 strong buys and 13 buys. Interesting to see if these 2 stocks can break beyond their comfort zones?

Susan Miller 5 years ago Member's comment

The $SHW and $VAL merger is certainly promising.

Kirk Sheffield 5 years ago Member's comment

Very good picks here. $DIS in particular has just been killing it lately with one major win after another. And they certainly know how to squeeze every last dollar from each box office hit.

Kurt Benson 5 years ago Member's comment

I agree @[Kirk Sheffield](user:24174) Elsa is outselling Barbie, Star Wars is king again and now everyone's crazy over Zootopia. I haven't seen it yet but did see the trailer at the Star Wars movie and it's on my list. I'm bullish $DIS & $AAPL.