Stay Ahead of the Game: 7 Stocks to Buy Before Everyone Else Does

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  • CrowdStrike (CRWD): Businesses rely on cybersecurity to stay safe from hackers.
  • American Express (AXP): The credit and debit card issuer continues to expand its profit margins.
  • Duolingo (DUOL): Users are flocking to the educational app to learn new languages.
  • Continue reading to discover the remaining stocks to buy before they pop!
stocks to buy before they pop - Stay Ahead of the Game: 7 Stocks to Buy Before Everyone Else Does

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Buying promising stocks before everyone else notices can set you up for a big payday. Some hidden gems can deliver outsized returns, but great opportunities are also hidden in plain sight.

Investors can find many large market-cap stocks trading at significant discounts. Those deals shouldn’t last forever, and accumulating shares while prices are low can lead to more gains.

Finding long-term stocks can make investing simpler. You won’t have to monitor daily price fluctuations or study much technical analysis. These are some of the best stocks to buy before they pop.

CrowdStrike (CRWD)

Person holding smartphone with logo of US software company CrowdStrike Holdings Inc. (CRWD) on screen in front of website. Focus on phone display. Unmodified photo.
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CrowdStrike (NASDAQ:CRWD) has outperformed the stock market for several years. The cybersecurity firm has almost quintupled over the past five years and has gained 24% year-to-date.

More businesses are turning to CrowdStrike to protect themselves from cyberattacks. The financial costs and reputation damage from cyberattacks are too great for most companies to risk. CrowdStrike provides a solution that has turned into $3.44 billion in annual recurring revenue.

The company closed out the fourth quarter of fiscal 2024 on a high note with 33% year-over-year (YoY) revenue growth and $53.7 million in GAAP net income. Profits made a big turnaround as the company reported a $47.5 million GAAP net loss in Q4 FY23.

CrowdStrike continues to grow as other cybersecurity companies report much slower revenue growth than just a year ago. The stock has approval from many analysts with its Strong Buy rating. The average price target implies a 27% upside.

American Express (AXP)

an American Express (AXP) credit card sticking out of someone's pocket
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American Express (NYSE:AXP) has been winning more attention. The credit and debit card issuer has been a household name for decades, but strong financial results and a low valuation are raising demand for the stock.

Let’s start with the valuation. While most credit card companies have P/E ratios above 30, American Express only has a 19 P/E ratio. American Express would have to gain more than 50% from current levels just to be valued at the same level as its peers. That offers a good margin of safety.

Financials are another area of strength. American Express grew its revenue by 11% YoY in Q1 2024. Net income soared by an astonishing 34% YoY. The fintech firm attracted many younger consumers. More than 60% of its new cardholders from the quarter were Millennials and Gen Z consumers. To top it all off, investors receive a 1.19% yield just for holding onto their shares. American Express does a good job hiking its dividend, raising its payouts by 17% this year.

Duolingo (DUOL)

DUOL stock: A phone displaying the duolingo logo in front of a computer screen displaying the duolingo site
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Duolingo (NASDAQ:DUOL) makes it easier for people to learn new languages. The educational app trades at a $11 billion market cap and a lofty 700 P/E ratio. The valuation will scare away many value investors, but the stock is delivering impressive financial growth that can reward patient investors. As profit margins continue to improve, the valuation should become more reasonable.

Duolingo is reporting high growth numbers in the areas that matter: revenue, profits and user growth. Revenue increased by 45% YoY in Q4 2023, while net income reached $12.1 million. Meanwhile, the company posted a $13.9 million net loss in Q4 2022. The switch to profitability has significantly strengthened the bullish thesis.

Daily active users grew by 65% YoY to reach 26.9 million people. The educational app also had 88.4 million monthly active users, 46% higher than in the same period last year. Those growth rates should help the company rally. If net income continues to expand, the valuation will look more enticing for people who accumulate shares at current levels.

Alphabet (GOOG, GOOGL)

Alphabet Inc. (GOOG, GOOGL) and Google logos seen displayed on smartphones. The Google stock split is happening today.
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The mega-cap tech giant is an undervalued opportunity hidden in plain sight. You may have used Google to find this article and saw some ads along the way. Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) is the leader in online advertising, and its profit margins are getting more attractive.

Revenue increased by 15% YoY in Q1 2024, while net income soared by 57% YoY. Cost cutting has been working wonders for the company’s profits, just as it did for Meta Platforms (NASDAQ:META). Alphabet is getting lean and more efficient while delivering top-line growth.

Alphabet only trades at a 26.3 P/E ratio despite its lead in the advertising industry. Gemini offers enticing opportunities in artificial intelligence that aren’t fully reflected in the company’s stock price. Furthermore, Google Cloud is gaining more market share in the cloud computing industry. Cloud revenue growth outpaced advertising revenue growth, now making up more than 10% of the company’s business model. The stock looks reasonable at current levels.

D.R. Horton (DHI)

In this photo illustration the D.R. Horton (DRI) logo seen displayed on a smartphone.
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D.R. Horton (NYSE:DHI) is a home construction company with a $50 billion market cap and a 10 P/E ratio. It also trades at a reasonable 0.60 PEG ratio. The stock has outperformed the market with a 252% gain over the past five years.

Shares have only inched up by 1% year-to-date, but the company has been posting good financial results. Revenue increased by 14% YoY in Q2 FY24, while net income surged 24% YoY.

D.R. Horton offered fiscal 2024 revenue guidance that ranges from $36.7 billion to $37.7 billion. That represents mid-single-digit YoY growth from fiscal 2023 results. The firm also has an excellent reputation with its dividend. D.R. Horton hiked its quarterly dividend from $0.25 per share to $0.30 per share in 2023, a 20% YoY increase. The company also delivered an annualized dividend growth rate of 22.05% over the past decade.

Sterling Infrastructure (STRL)

Image of the foundation and frame of a house

Sterling Infrastructure (NASDAQ:STRL) is a smaller construction company receiving a lot of love from investors in the know. The $3.8 billion corporation has a 26.2 P/E ratio and has gained 40% year-to-date. It’s also up by almost 1,000% over the past five years.

The construction company reported another strong quarter. Revenue increased by 9% YoY in Q1 2024, while net income jumped by 58% YoY. Rapidly expanding profit margins will further reduce the P/E ratio and make it a compelling pick for long-term investors.

The company’s E-Infrastructure Solutions continue to attract plenty of clients. Sterling expects high single to low double-digit revenue growth in this segment for 2024. The infrastructure firm also anticipates a strong 2024 due to its backlog.

Sterling also raised its 2024 guidance. The company came into the year with net income guidance of $155 million to $165 million. The new guidance now suggests Sterling Infrastructure can generate $160 million to $170 million in net income.

Celsius Holdings (CELH)

CELH stock: A view of several cases of Celsius energy drinks, on display at a local big box grocery store.
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Celsius Holdings (NASDAQ:CELH) is a high-growth sports beverage company expanding internationally. While revenue growth took a back seat in the first quarter, profit margins expanded considerably.

Celsius reported 37% YoY revenue growth in Q1 2024. Most of the company’s revenue came from domestic sales, but international sales exhibited 43% YoY growth. The company has plenty of opportunities to reaccelerate revenue growth as it taps into global markets.

The 89% YoY jump in net income still makes the stock attractive despite the growth deceleration. Celsius Holdings generated $77.8 million in GAAP net income. The stock is still up 42% year-to-date and has gained almost 5,000% over the past five years. Investors shouldn’t expect the 5-year gains to repeat, but Celsius Holdings still has the makings of a stock that can outperform the market in the long run. The pullback after earnings has created a long-term buying opportunity.

On this date of publication, Marc Guberti held a long position in GOOG and CELH. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Marc Guberti is a finance freelance writer at InvestorPlace.com who hosts the Breakthrough Success Podcast. He has contributed to several publications, including the U.S. News & World Report, Benzinga, and Joy Wallet.


Article printed from InvestorPlace Media, https://investorplace.com/2024/05/stay-ahead-of-the-game-7-stocks-to-buy-before-everyone-else-does/.

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