Investing in undervalued stocks gives investors an edge in capitalizing on companies with high growth potential. Listing these stocks involves scanning the fundamentals, which helps mark potential the market might overlook. Indeed, fundamentals like top-line growth, profit margins, and strategic initiatives reflect a company’s true value.
Here, the focus is on three undervalued stocks. To begin with, the first company has demonstrated significant growth in its core business by expanding its global network and increasing system installations. Strategic partnerships and a robust content pipeline further bolster its market position, making it a strong candidate for investment.
Meanwhile, the second company operates a rapidly growing marketplace. This can be observed in a high increase in Gross Merchandise Value (GMV) and active third-party (3P) sellers. This growth is accompanied by a rising number of active buyers and a higher average spend per buyer, which indicates its expanding and engaged customer base. Finally, the third company is making significant strides in zero-emission technologies. It is securing contracts for large fuel cell applications and advancing its high-speed motor technologies.
In short, these innovations highlight its strategic focus on the green technology sector, positioning it for high growth.
Imax (IMAX)
Imax (NYSE:IMAX) focuses on immersive cinematic systems. The company experienced installation growth of 20% year-over-year (YoY) in Q2 2024. It installed 24 systems, up from 20 in Q2 2023, with total installations in H1 2024 reaching 39, a 34% increase from 2023. Further, Imax signed agreements for 87 new (or upgraded) systems in Q2 2024, representing an 89% increase from the 46 signings in Q2 2023. The company ended Q2 2024 with a backlog of over 500 systems. It raised its 2024 installation guidance to 130-150 systems. This is up from the previous range of 120-150 systems.
Moreover, a significant deal with Wanda Film includes up to 123 new IMAX systems in China. This deal is Imax’s largest exhibition agreement in five years, aiming to expand Imax’s presence in China’s lucrative market. Many upgraded systems will be in Tier 1 cities, enhancing revenue potential. Imax’s film slate through 2026 includes at least 14 films shot with IMAX cameras. Significant titles include Mission Impossible 8 and Avatar 3. Indeed, this pipeline is expected to drive box office success and system utilization.
Imax’s strategic moves and partnerships strengthen its position among undervalued stocks.
GigaCloud (GCT)
GigaCloud (NASDAQ:GCT) operates a growing marketplace with solid expansion. The GMV surged by 64% YoY, hitting $907.7 million for the 12 months ending March 2024. This was up from $553.5 million the previous year. The growth reflects the increased scale and transaction volume in GigaCloud’s marketplace. Moreover, 3P Seller GMV jumped by 71.8% to $489.9 million. It was $285.2 million a year ago. This segment now makes up 54% of total GMV, up from 51.5%. The rise in 3P seller GMV indicates more participation from third-party sellers.
Further, active 3P sellers grew by 43.7%, reaching 865 compared to 602 in the previous year. This increase highlights GigaCloud’s appeal to a broader range of suppliers. Active buyers also rose by 29.1% to 5,493 from 4,255. The average spend per active buyer increased by 27% to $165,239. The growth of active buyers and spending shows a more engaged customer base. This is essential for sustaining marketplace growth and profitability.
GigaCloud’s strong performance positions it as a notable presence among undervalued stocks.
Garrett Motion (GTX)
Garrett Motion (NASDAQ:GTX) develops zero-emission technologies with significant investments. The company has secured its first series production contract for a large fuel cell application. This contract is aimed at the Commercial Vehicle and Industrial segments and underscores Garrett’s growing presence in zero-emission technology. Garrett has a broad and mature portfolio of fuel cell compressors. Indeed, this positions the company to capture growth in this emerging market. Garrett has advanced high-speed motor technologies for commercial vehicles and has achieved several predevelopment awards for these technologies.
Additionally, the company’s progress in E-Powertrain technology shows its innovation capabilities. Garrett has also won two additional predevelopment contracts. These contracts are for high-power centrifugal compressors used in commercial vehicles. Moreover, Garrett’s investments and new contracts reflect its strategic focus on green technology. The company repaid $186 million of its Euro-denominated Term Loan B. This reduced its total debt from $1,683 million to $1,497 million.
Further, Garrett repaid $985 million in term loans early. As of June 30, 2024, the company had a stronger liquidity position of $698 million. This debt reduction highlights Garrett’s effective capital management. Therefore, Garrett Motion is a top undervalued stock due to its green tech advancements and debt reduction.
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.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
