Investor’s Business Daily’s IBD 50 is “a weekly, rules-based, computer-generated stock index.” It “seeks to identify the current top 50 growth stocks.” Since the companies on the IBD Top 50 do tend to have strong fundamentals and excellent growth characteristics, it’s a good screening tool that enables investors to find good stocks to buy. Moreover, not all of the names on the list are well-known firms. It’s possible to find “hidden gems” well-positioned to outperform the stock market on the IBD 50. For example, in the last year, I found two huge winners—Super Micro (NASDAQ:SMCI) and ServiceNow (NYSE:NOW)—on the list. The following three stocks which are currently on the list are each extremely attractive for specific groups of investors.
MakeMyTrip (MMYT)
MakeMyTrip (NASDAQ:MMYT) is an attractive stock for investors looking for exposure to India, one of Earth’s fastest-growing, best-positioned countries.
Indeed, the country’s economy is expected to grow an impressive 6% more than inflation last year. Economists anticipate it will repeat that feat in 2024. India is benefiting from positive demographic trends and the migration of many factories from China to India.
And MakeMyTrip, in turn, is clearly getting a lift from the rapid growth of the Indian economy. Last quarter, the online travel agency’s revenue jumped 25.6% compared to $170.5 million a year earlier. In contrast, its operating profit, excluding some items, jumped to $33.4 million from $19.7 million during the same period a year earlier.
“During this seasonally strong quarter, we witnessed robust demand for leisure travel across all domestic and international destinations leading to the highest-ever quarterly gross bookings, revenue, and profit for the company,” CEO Rajesh Magow reported.
e.l.f. Beauty (ELF)
e.l.f. Beauty (NYSE:ELF), which markets cosmetics, is a great stock to buy for investors looking to benefit from American consumers’ strength and the love millennials and Generation Z have for experiences. Many consumers use cosmetics when they enjoy experiences.
E.L.F.’s brand certainly resonates with a large portion of the market. Indeed, last quarter, its revenue soared 85% versus the same period a year earlier to $271 million, while its EBITDA, excluding certain items, jumped 61% year-over-year to $59.1 million.
On Feb. 5, investment bank Oppenheimer identified ELF as its favorite name in the Consumer Staples space.
Investor’s Business Daily gives ELF a very high Composite Rating of 98 out of 99, indicating that it’s one of the more well-rounded names on the IBD Top 50.
Arista Networks (ANET)
Arista Networks (NYSE:ANET) is a great pick for investors who want to benefit from the emerging Edge AI trend. As I noted in a previous column, “Edge AI devices are connected to the internet and have their own AI rather than relying on distant data centers and the cloud.” These devices provide users with major advantages over cloud-based AI. Specifically, they run more quickly, are more secure, and enable the use of many more applications.
ANET markets “hardware for localized data centers” and “infrastructure software for managing local networks enabled by edge computing.“ As a result, it’s well-positioned to benefit from the proliferation of Edge AI.
Moreover, the firm’s top and bottom lines are already expanding rapidly. Last quarter, its revenue advanced 20% versus the same period a year earlier to $1.5 billion. Its earnings per share, excluding certain items, rose to $6.94 from $4.58 in Q4 of 2022.
On the date of publication, Larry Ramer held a long position in SMCI. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
