Investors might not be thinking of certain stocks and could miss some interesting names that look to be on the upswing after underperforming during the current bull run that began in spring 2023. These sleeper stocks appear to have finally turned a corner, bounced off their bottom and are trending higher thanks to positive catalysts, including strong financial results, positive forward guidance, stock buybacks and dividend payments.
These are the stocks that analysts are furiously rerating as we move through earnings season. Catching wind of these turnaround stories and taking a position before the share price really takes off can mean the difference between success and failure as an investor. Not to worry, though. We’ve got you covered with three sleeper stocks that could make your February unforgettable.
Restaurant Brands International (QSR)
Restaurant Brands International (NYSE:QSR) delivered sturdy fourth quarter financial results due to strong sales at its Burger King and Tim Hortons restaurant chains. The company, which owns Popeyes Chicken and Firehouse Subs, reported earnings per share (EPS) of $0.75 versus the $0.73 expected on Wall Street. Sales in the October through December period came in at $1.82 billion compared to $1.81 billion that was forecast. Total sales were up 8% from a year earlier.
Tim Hortons, a popular coffee chain in Canada, saw its same-store sales rise 8.4% year-over-year, topping estimates of 4.7%. Burger King reported same-store sales growth of 6.3%, and Popeyes’ same-store sales rose 5.5%. Burger King is a year into a turnaround strategy that includes remodeling restaurants and spending more money on advertising. Restaurant Brands acquired Burger King’s largest U.S. franchisee, Carrols Restaurant Group, in a $1 billion deal to speed up restaurant renovations.
QSR stock has gained 15% over the last 12 months; further increases could be forthcoming.
Caterpillar (CAT)
Caterpillar (NYSE:CAT) is another stock starting to return to investors’ radars. CAT stock rose 5% after the construction equipment maker reported strong Q4 2023 results. Caterpillar announced Q4 EPS of $5.23 compared to the $4.76 expected among analysts. Sales totaled $17.10 billion, which aligned with Wall Street forecasts. The company, known for its distinctive yellow and black dump trucks, reported an operating profit margin of 18.9% from 17% a year ago.
As for guidance, Caterpillar said that it expects full-year 2024 sales to be the same as last year and also forecast a profit margin of 19% this year. With the economy remaining strong and federal and state governments continuing to spend on infrastructure projects, Caterpillar’s earnings could surprise to the upside this year and into 2025. After years of neglect, CAT stock is on the rise again, having gained 10% in 2024 and increased 31% over the last 12 months.
Ford (F)
Not only did Ford (NYSE:F) issue better-than-expected Q4 2023 earnings, but the Detroit automaker also announced that it is issuing a special dividend to stockholders. Ford said it will pay a one-time dividend of $0.18 per share in addition to its first-quarter regular dividend payment of $0.15 a share. Both dividends are payable on March 1. The dividend yield on Ford’s stock is currently at 4.79%, not including the special payout to stockholders.
Ford felt confident issuing the special dividend alongside solid Q4 2023 financial results. Despite a six-week strike last autumn by the United Auto Workers (UAW) union, Ford announced an EPS of $0.29 versus $0.14 that had been forecasted across Wall Street. Revenue in the quarter came in at $43.20 billion compared to the estimated $40.12 billion. Sales were up 4% from the previous year. Investors responded strongly to the results and special dividend, bidding F stock up 3% year to date.
On the date of publication, Joel Baglole 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.
