In the world of investing, it’s often the hidden gems that yield the most extraordinary returns. While Wall Street keeps a watchful eye on the giants, lesser-known stocks are quietly charting a course for explosive growth. These under-the-radar companies are the stars of the future, and their stories are waiting to be told.
The article explores seven lesser-known stocks poised for explosive growth. It delves into the potential of these unassuming yet dynamic businesses. From the first’s rock-solid core deposit base to the third’s strategic approach to catering to niche industries, the insights may change investment perspectives.
Further, it dives into technology leadership, global expansion strategies, operational efficiency, and innovative technology in advertising. Finally, the seventh stock on the list shows that insurance can be the foundation of impressive growth. Read more to uncover the rising tech titans redefining the landscape of 2023’s investment opportunities.
Tech Stocks: Banner (BANR)
To begin with, Banner’s (NASDAQ:BANR) core deposit base has proven resilient and loyal. A significant portion of the company’s deposits are classified as core deposits, making up 89% of the total deposits (Q3 2023). Maintaining such a substantial core deposit base is an important strength, as these stable funds provide a reliable source of funding for lending activities, enabling the bank to continue serving its clients while ensuring its sustainability and growth.
Further, Banner has demonstrated a capacity for loan growth, a crucial driver of profitability for financial institutions. The company’s loans increased by 8% year-over-year, indicating its ability to attract borrowers and expand its lending portfolio. Overall, this not only boosts profitability but also signifies that Banner is effectively meeting the credit needs of its clients and facilitating economic growth in its communities.
Adapting to emerging technologies is a crucial strength for any company aiming for rapid growth. Photronics (NASDAQ:PLAB) has positioned itself well in this regard, particularly in producing AMOLED panels on G8.6-sized glass. This emerging product segment is expected to demand high-quality and superior photomasks, a domain where Photronics has demonstrated technological leadership.
Also, Photronics’ ability to maintain high utilization levels in its Flat Panel Display (FPD) fab operation indicates its operational efficiency. Even during Q3 2023, with moderately lower revenue, the company achieved this feat by controlling costs and optimizing its product mix. Finally, Photronics’ long-term customer agreements play a pivotal role in maintaining stable revenues and profit margins. These agreements have helped the company preserve its average selling price (ASP) and fab utilization rate.
Concentrix’s (NASDAQ:CNXC) growth strategy also focuses on specific strategic verticals. The company continues to grow within these verticals, including healthcare, banking, financial services, insurance, e-commerce, and travel. This strategic approach allows Concentrix to cater to the unique needs and demands of each industry. Concentrix’s revenue from healthcare clients posted impressive growth, up approximately 17% year-over-year (Q3 2023).
Additionally, Concentrix’s services to retail, travel, and e-commerce clients grew by 8% year-over-year, including double-digit growth with travel clients. This is an essential aspect of Concentrix’s growth as these sectors continue to expand. Revenue from clients in this sector grew by 5% on a reported basis and 6% on an organic constant currency basis.
Finally, even in a competitive sector, Concentrix managed to achieve growth. Revenue from technology and consumer electronics clients grew by 6% year-over-year. This showcases the company’s ability to navigate challenges and secure growth opportunities. Although revenue from communications clients decreased, the ability to adapt and focus on growth in other verticals offsets potential challenges in one sector.
Tech Stocks: Argenx (ARGX)
Argenx’s (NASDAQ:ARGX) strategic approach to global expansion is a significant driver of its growth potential. The company has achieved product approval in multiple regions, including the US, Japan, Europe (with a specific focus on Germany), and China. These approvals provide access to a broader patient population and support revenue growth.
Strategically, partnering with Zai Lab in China is a notable move, enabling Argenx to apply to the National Reimbursement Drug List (NRDL) in 2024. This is essential for expanding access to patients who may not have private insurance. Accepting Zai Lab’s BLA submission further strengthens Argenx’s presence in China, a market with significant growth potential.
In Europe, the completion of reimbursement negotiations in Italy was executed in just 11 months after European approval. It is a testament to Argenx’s ability to expand access for patients in new markets rapidly. The company’s continued expansion into other European countries following its launch in Italy indicates its commitment to serving patients globally.
Finally, finalizing the commercial and distribution agreement in South Korea with Handok is another strategic move. Thus, Handok’s track record as a commercial partner further supports Argenx’s efforts to navigate regulatory and commercial activities effectively in this region. This is why this is among the top tech stocks, in my opinion.
CSW Industrials (CSWI)
CSW Industrials (NASDAQ:CSWI) places a strong emphasis on operational efficiency and margin expansion. The company reports improved gross profit and EBITDA margins (Q1 fiscal 2024). This reflects the company’s ability to manage expenses effectively as it increases revenues. Operational efficiency and margin expansion are essential for profitability and sustainable growth.
On the other hand, CSW Industrials benefits from the diversification of its product portfolio and the end markets it serves. The products it sells, especially in HVAC/R and plumbing, are often considered non-discretionary fundamental necessities for homeowners and businesses. This ensures a consistent demand for its products, even in challenging market conditions.
Overall, the ability to outperform the categories it serves highlights CSW Industrials’ resilience in various market segments. Lastly, the company’s diversified portfolio protects against economic volatility and underscores its fundamental strength in serving essential markets.
Tech Stocks: Perion (PERI)
Perion’s (NASDAQ:PERI) focus on innovation and technology is a core strength that directly contributes to its rapid growth potential. The company’s retail media business is a prime example of this commitment. Perion leverages advanced technology, including generative AI, to provide innovative solutions that drive growth.
Notably, Perion’s Retail Media business employs three layers of data: anonymized retail data, third-party enrichment data, and its proprietary iHUB data. An AI decision-making engine harnesses these data layers to produce thousands of dynamic, creative advertisements. The result is a highly personalized and localized ad experience that caters to the specific needs and preferences of individual consumers. For example, Perion can customize retail ad creatives based on local weather conditions, offering comforting suits on rainy days and ice cream promotions on sunny days.
Finally, incorporating SORT, an AI-based cookieless targeting technology, further enhances Perion’s ability to target the right products to the right individuals at the right moment. Therefore, this advanced use of technology not only improves the effectiveness of advertising campaigns but also sets Perion Network apart in terms of innovation and customer engagement.
NMI Holdings (NMIH)
NMI Holdings’ (NASDAQ:NMIH) growth in its insurance portfolio is a pivotal factor that supports its rapid expansion, generating $11.5 billion of New Insurance Written (NIW) volume in Q2 2023. Considering the magnitude, this figure underscores the company’s success in attracting new business and expanding its insurance portfolio. NMI Holdings reached a record high of $191.3 billion in insurance in force. Thus, this substantial presence in the mortgage insurance market is a key element for future growth prospects.
Additionally, NMI Holdings reported a low default rate of 71 basis points at the end of Q2. This low rate suggests that the company’s underwriting standards and risk management strategies effectively maintain a portfolio with minimal delinquencies and defaults. The continued cure activity within the previous default population demonstrates NMI Holdings’ ability to manage delinquent loans effectively and reduce potential losses. Overall, this is a positive sign for the company’s risk mitigation efforts, and makes NMIH one of the best tech stocks, in my book.
On the date of publication, Yiannis Zourmpanos did not hold (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.