Uncovering under-the-radar stocks with the potential for significant gains has always been an intriguing quest for investors. The allure of identifying those hidden gems before they surge in value is both enticing and financially rewarding. In the vast landscape of stocks and investments, those quietly making waves are waiting to burst into the limelight in 2024.
Each of the following companies boasts unique strengths, innovative strategies, and, most importantly, untapped potential that positions them for remarkable growth. The companies display strategic growth plans which poise them for substantial upside in 2024.
Hence, the financial world is teeming with opportunities that often remain under the radar. Let’s explore the fundamentals of seven such hidden champions.
PENN Entertainment (PENN)
The integrated entertainment operator PENN Entertainment (NASDAQ:PENN) is committing substantial financial resources to make its partnership with ESPN successful. The company plans to spend $150 million annually on marketing services for ESPN over the initial 10-year term.
Additionally, they anticipate similar off-channel marketing expenditures. The expectation of solid returns on investment supports these financial commitments. The long-term agreement with ESPN has potential to generate substantial EBITDA of approximately $500 million to $1 billion annually in the interactive segment. This translates to strong free cash flow and value creation for shareholders.
On the other hand, the online sports betting and online casino space in the U.S. is a sizable opportunity, and PENN Entertainment may leverage its advantages. The strategic partnership with ESPN may help realize this opportunity, providing a significant growth runway for PENN Entertainment.
HighPeak Energy (HPK)
HighPeak Energy (NASDAQ:HPK) has been consistently increasing its production levels, which is a vital indicator of its growth potential.
In Q3, the company reported an average daily production of over 50,000 barrels of oil equivalent (BOE) daily. This represents an impressive 18% increase over the previous quarter and a substantial 35% increase compared to the year’s first quarter. This steady and robust growth in production reflects HighPeak Energy’s operational efficiency and ability to tap into valuable energy resources.
Furthermore, HPK maintains strong profit margins, a significant factor contributing to this is its high oil cut. With 93% of its production comprising liquids, it differentiates itself from competitors. Those rivals tend to have a higher percentage of gas in their production mix. This strategy translates to more significant profits for HPK, as oil typically commands higher prices in the energy market.
Viper Energy (VNOM)
Viper Energy’s (NASDAQ:VNOM) Q2 2023 results demonstrate consistent growth in oil production, even in a challenging market.
Despite the Permian Basin’s relatively flat production, Viper Energy increased its oil production by 5% quarter over quarter. This noteworthy achievement reflects the high quality of VNOM’s royalty assets and operations efficiency. Also, it showcases the company’s adaptability to market conditions by optimizing assets and sustaining growth trajectory.
Another pivotal strength is its strategic relationship with Diamondback, the primary operator for Viper Energy, a key to their success.
Notably, the advantageous nature of this relationship is evident in Viper Energy’s ability to focus on the large-scale development of its high-concentration royalty acreage. The union provides VNOM with access to the expertise and resources of a major industry player, crucial for efficiency and sustainability of its assets.
Finally, the data corroborates the importance of this partnership. Viper Energy’s ability to initiate production guidance for the third quarter, projecting 4% oil growth relative to the second quarter, is a clear result of its collaboration with Diamondback.
Hertz Global (HTZ)
Hertz Global (NASDAQ:HTZ) has undertaken a brand revitalization effort that includes launching a new website.
The goal pursues profitable mid-market growth across leisure and business segments. By targeting a younger, value-driven consumer base through various distribution channels, Hertz Global expects to access untapped customer segments. Additionally, the potential for deploying a higher number of lower-depreciating vehicles is another aspect of this initiative that could increase margins.
In the first three weeks of July, its rebranded website saw a 14% increase in conversion and a 15% growth in revenue per visitor. Also, results include a 12% jump in value-added service revenue per booking, suggesting positive early results.
Further, the rideshare business reported substantial year over year (YOY) revenue growth of 84% and sequential growth of 14%. This uptick is primarily attributed to volume. Also, transaction days in the rideshare business grew significantly, with a 69% increase YOY and a 17% sequential increase.
Finally, Hertz Global’s strategy involves scaling its rideshare business to create a subscription business for drivers. This move aims to moderate the quarterly peak-trough pattern typically seen in the leisure business, flatten the vehicle depreciation curve, and produce accretive EBITDA margins.
Euronet (NASDAQ:EEFT) operates in the three key segments of electronic funds transfer (EFT), ePay, and money transfer. In Q2 2023, each arm displayed strengths and growth prospects, with the EFT exhibiting strong growth of a 13% YOY revenue increase.
Also, operating income and adjusted EBITDA grew by 21% YOY and 12% YOY, respectively. Key factors contributing to this growth were increased cash withdrawal transactions, travel recovery trends, and the performance of the POS-acquiring business.
Additionally, the ePay segment experienced a 15% YOY growth in revenue. Its operating income and adjusted EBITDA grew by 11% YOY and 10% YOY, respectively. The expansion of mobile and digital branded payments, digital distribution channels, and strong promotional activities drove the growth.
On the other hand, the money transfer division showed a 7% YOY increase in revenue, with operating income and adjusted EBITDA growing 15% YOY and 12% YOY, respectively. Specifically, this was driven by various factors, including U.S. outbound transactions, international transfers, and digital transactions.
Lastly, Euronet focuses on expanding its global network, a key driver of its growth potential. For instance, in Q2 2023, the company launched new independent ATM networks in Morocco and Latvia, increasing accessibility for customers. Euronet signed an ATM outsourcing agreement with Santander Bank in Poland, expanding its market position.
A key growth driver for San Jose-based Sanmina (NASDAQ:SANM) is its ability to secure new program wins and acquire new customers.
During Q3 2023, the company expanded its presence in the industrial, medical, defense, and automotive markets. The capacity to attract and retain new clients and programs indicates Sanmina’s market positioning. This represents the appeal of its services to a wide array of industries.
Despite some inventory adjustments in the communication networks segment, Sanmina achieved a YOY growth rate of 7.7%. Notably, this growth showcases SANM’s resilience and ability to maintain healthy relationships with key clients.
Also, its stability within cloud infrastructure indicates the capacity to support evolving technologies while serving clients in an industry marked by rapid change and innovation.
Finally, Sanmina’s book-to-bill ratio stood at approximately 1:1 for Q3. Therefore, this strongly indicates robust demand and the company’s ability to secure new orders. This is crucial for continued growth as it ensures a consistent flow of new business.
NMI Holdings (NMIH)
Also, the portfolio’s credit performance remains strong, with a low default rate of 0.71%. Fundamentally, these figures indicate a sound risk management strategy and the company’s ability to ensure the quality of its insured loans.
One of the most compelling strengths of NMI Holdings is its ability to drive consistent and significant business growth. For instance, in Q2, the company generated $11.5 billion of New Insurance Written (NIW) volume, signifying its strong market presence.
Finally, the company ended the quarter with $191.3 billion of high-quality, high-performing insurance in force. This number highlights the sustained growth of its insured portfolio and the trust it has earned in the market. Therefore, NMI Holding’s primary insurance in force increased by 13.4% YOY, demonstrating a consistent upward trajectory.
As of this writing, Yiannis Zourmpanos held a long position in NMIH. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.