Investors are clearly concerned about the current macroeconomic and geopolitical backdrop. Recent inflation-driven events have led us to a precarious place in the markets. Accordingly, with a potential recession on the horizon, few investors may be on the search for high-growth stocks. That makes sense. But, generally speaking, the time to buy beaten-down names is when they’re cheap.
Of course, high-growth stocks in areas such as technology may continue to see declines in the year to come. As valuation compression takes hold and investors diversify into other areas of the economy, singularly-focused growth investors may continue to be hit.
That said, I think there are pockets of the stock market worth exploring, such as energy and real estate, which most investors would not equate to growth areas, that provide some hefty bargains. Not only that, these companies tend to deliver significant bottom-line growth. And in this economy, profits matter more than anything else.
Here are three high-growth stocks I think are worth buying right now.
Occidental Petroleum (OXY)
Occidental Petroleum (NYSE:OXY) may not be included in a list of high-growth stocks for many investors, but it nevertheless deserves a look.
Shares of this leading oil and gas player have performed pretty well so far this year, up more than 4%. This follows a 119% advance in 2022.
A prominent Warren Buffett holding, Occidental has seen continued interest, even as energy prices have come down from their highs. It’s easy to see why Buffett is on the Occidental train. The company’s earnings growth has been impressive.
Occidental is expected to report fourth-quarter and full-year results on Feb. 23. Analysts are predicting Q4 EPS of $1.97 and 2022 EPS of $9.83. If Occidental meets those targets, it will deliver year-over-year growth of 33% and 285%, respectively.
Accordingly, this is a stock I think deserves to be put in the high-growth bucket by long-term investors.
Target Hospitality (TH)
The previously announced exchange offer for all of Target Hospitality’s (NASDAQ:TH) outstanding warrants has closed. For this leader in providing vertically integrated modular lodging and hospitality services, that’s a big positive investors are starting to price into the stock. Shares are up 19% since the start of the year.
A total of 8,097,893 exercisable warrants (which includes 369,471 warrants tendered through assured delivery), representing approximately 50.1% of the warrants, were correctly tendered and not withdrawn in the offer. Target exchanged these warrants for 2,996,201 shares of common stock in accordance with the terms of the offer. That leaves 8,068,656 warrants still outstanding after the offer has closed.
For the third quarter, Target Hospitality posted record quarterly revenue of $159.6 million, an increase of 79% from the corresponding period in 2021. For the same period, net income of $19 million surged 184% from a year ago.
Currently, Target Hospitality stock is trading around the $18 level with the potential to go much higher this year.
Marathon Oil (MRO)
Marathon Oil (NYSE:MRO) is another top energy name making this list of high-growth stocks to buy. Like Occidental, the company’s bottom-line growth prospects are what makes it worth buying. So far this year, shares are up around 2% after gaining 67% in 2022.
I think the company’s upcoming earnings report, scheduled for Feb. 15, may exceed investor expectations. Marathon is expected to earn 96 cents per share for the fourth quarter of 2022, up 25% year over year. However, if it is able to produce similar bottom-line results to Occidental, this is a name that could get more love. Meanwhile, while Q4 revenue is expected to increase less than 2% compared with a year ago, full-year revenue is projected to surge nearly 46%.
In addition, Marathon Oil recently disclosed that, after accounting for closing adjustments, it had successfully completed the acquisition of Ensign Natural Resources’ Eagle Ford assets for a total cash consideration of $3 billion. This is a key driver of bottom-line growth I think the market has yet to price in.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.