While the market is having a great year, consumers were feeling lackluster going into the election. That trend is rapidly changing, as it’s likely that economic policies to focus on economic growth will take center stage.
That bodes well for growth stocks, especially smaller stocks that could benefit from lower taxes and deregulation. And for investors in the right growth spot, returns can be huge.
For instance, investors in Cava Group (CAVA), a fast-growing casual Mediterranean restaurant chain, have already seen revenues jump 39% and earnings soar 163% over the past year.
The company’s most recent earnings beat was also met with strong guidance, thanks to consumers starting to spend more at restaurants after cutting back following the bout of inflation.
For a smaller restaurant chain, strong customer interest can help fuel further expansions and increased market share.
Action to take: Growth investors may like shares here, given the company’s big growth numbers. Cava is still focused on growing, and isn’t massively profitable yet, but over time as their store count tops out, there will be opportunities to focus on building a bigger profit margin.
For traders, shares have been trending higher all year. The January 2025 $150 calls, last trading for about $3.30, could see mid-double-digit returns or better on a further uptrend into the new year.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.