3 Sleeper Stocks Poised to Outperform the Market by 2026


  • Three stocks drive top-line growth and enhance their market lead by adapting to and capitalizing on specific market segments or strategies.
  • Conagra (CAG): Exhibits resilience with a diversified portfolio that leverages varied consumer preferences.
  • Heidrick & Struggles (HSII): Achieves growth through strategic acquisitions, expanding service offerings and a growing client base.
  • Despegar (DESP): Capitalizes on B2B and white-label segments, driving revenue stability and profitability.
Sleeper Stocks - 3 Sleeper Stocks Poised to Outperform the Market by 2026

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Let’s three stocks that could surpass the market returns by 2026. These businesses are involved in different industries, leading in consumer staples, industrials and consumer discretionary. However, they are all connected by the potency of solid growth, even in harsh market conditions.

The first skillfully navigates through shifting consumer tastes with a diverse portfolio demonstrating resilience. Its strong brand and strategic positioning have allowed steady growth despite demand swings.

Conversely, the second one has purposefully increased its capacity through acquisitions, strengthening its customer base and range of services. Notwithstanding challenges in the executive search industry, the company’s diverse offerings have helped it achieve sales of over $1 billion.

In the meantime, the third one improves income stability and profitability by taking advantage of profitable B2B and white-label prospects. Its remarkable expansion in these areas demonstrates its capacity to enter new markets and clientele successfully.

These businesses are notable for their tenacity, strategic vision, and capacity to seize new possibilities in a turbulent market.

Conagra (CAG)

Conagra logo on a sign outside of a corporate campus
Source: Jonathan Weiss / Shutterstock.com

Because of its varied portfolio, Conagra (NYSE:CAG) may have an edge in shifting demand and maneuvering through various market scenarios. For instance, organic net sales in the Grocery & Snacks category rose 3.4% year-over-year (YoY) in Q3 2024. The 0.8% volume decline somewhat offset the 4.2% price mix rise that drove this growth. 

Despite the minor volume reduction, the overall positive net sales increase demonstrates the efficacy of Conagra’s initiatives in this area. There are also leads in particular brands in Conagra’s portfolio — like the frozen vegetable brand Birds Eye. This highlights the company’s capacity to seize market share and sustain growth momentum. Conagra gained market share in areas such as frozen sides, frozen single-serve meals, frozen breakfast and frozen seafood despite difficulties in the Refrigerated & Frozen segment. Here, the reported organic net sales dropped by 8.1%

Lastly, Conagra’s market share in the frozen single-serve meal industry reached over 51% in Q3 2024. This indicates a notable gain of 1.7 points over the prior year. To conclude, Conagra has demonstrated its ability to innovate new products and appeal to consumers, mostly through its brand positioning and strategic investments. This is what is driving its success.

Heidrick & Struggles (HSII)

Man holding sign that reads "Looking for a job"
Source: Shutterstock

Heidrick & Struggles (NASDAQ:HSII) has deliberately pursued acquisitions to increase its capabilities and speed up expansion in important sectors. Businessfourzero and Atreus Group GmbH acquisitions have greatly aided the company’s revenue development, especially in the On-Demand Talent and Heidrick Consulting categories. The purchase of Atreus Group GmbH increased on-demand talent net revenue in Q4 2023 by 83.7% over Q4 2022.

Similarly, Heidrick & Struggles Consulting’s net revenue increased 36% during Q4 2023, based on the acquisition of Businessfourzero. Indeed, the strategic acquisitions made by Heidrick & Struggles led to growth in the company’s clientele, offerings and geographic reach. Hence, the company has a solid market lead and derives top-line growth by using synergies resulting from the sharp integration of these acquisitions.

As a result, Heidrick & Struggles generated over $1 billion in revenue for 2023 by staying focused on providing value to customers through varied solutions despite challenges in the executive search industry. To sum up, the company’s strong client engagement and attendance at industry events such as Davos highlight the market opportunity and demand for leadership advice services.

Despegar (DESP)

A photo of an excited woman riding on the back of a bike a man is driving.
Source: OPOLJA / Shutterstock.com

Despegar’s (NYSE:DESP) revenue stability and profitability are improved by its capacity to take advantage of business-to-business (B2B) and white-label prospects. The organization can access novel markets and consumer demographics by utilizing these segments.  

Additionally, B2B and white-label gross bookings accounted for 14% of all gross bookings, reporting YoY increases of 63% and 69%. Despegar’s success in broadening its customer base and diversifying its revenue streams is demonstrated by the notable growth observed in the B2B and White-Label categories. These market sectors present chances for long-term alliances and higher-margin deals.

Moreover, gross bookings increased 31% to a record $5.3 billion in 2023, indicating that Despegar’s services are in high demand. The rise in gross bookings demonstrates Despegar’s capacity to draw clients and efficiently handle travel reservations. Hence, this illustrates the company’s strong brand awareness and client loyalty within its target markets.

Overall, gross bookings are a major source of revenue for Despegar, and the company’s ongoing expansion demonstrates its growth potential. Increased gross bookings provide a solid platform for top-line boosts, supporting Despegar’s trajectory toward being a major force in the travel industry.

As of this writing, Yiannis Zourmpanos held long positions in CAG, HSII and DESP. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Yiannis Zourmpanos is the founder of Yiazou Capital Research, a stock-market research platform designed to elevate the due diligence process through in-depth business analysis.

Article printed from InvestorPlace Media, https://investorplace.com/2024/04/3-sleeper-stocks-poised-to-outperform-the-market-by-2026/.

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