The Nasdaq and S&P 500 are steadily growing as tech companies lift the market. The past few months have been excellent for investors, with several stocks hitting new 52-week highs. As we end the second quarter, it is time to rebalance your portfolio and put your money into stocks that show strong upside potential for the second half. Cheap stocks do not always make a good bet, and expensive stocks do not always mean high risk. It could be worthwhile to consider expensive stocks worth buying right now.
Yes, there is always a risk when you invest in the stock market, but several stocks can be worth the risk. I’ve identified three companies that are making solid progress and are on a rally since the beginning of 2024. There’s no doubt these stocks are expensive, and you’ll be paying a premium for them, but they could keep roaring higher, and even better, there could be a stock split in the future. These stocks are worth the expensive price tag and will help your money grow. Let’s take a look at them.
MercadoLibre (MELI)
A leading fintech company, MercadoLibre (NASDAQ:MELI), capitalizes on the growing e-commerce market in Latin America. Up 7% year-to-date, MELI stock is on a tear and is exchanging hands for $1,642. It has soared 42% in the past 12 months and over 150% in the past five years.
This fintech company is a Wall Street favorite, and demand for its services will never run out. The company has been able to address the growing need for digital payments, and it generates revenue from the fees and commissions on the payments. This allows it to keep operating costs low while ensuring steady income.
A large population in Latin America does not have access to a bank account, and this is where MercadoLibre is set to benefit. It is making the most of this situation and has delivered impressive growth. Its e-commerce business is similar to Amazon (NASDAQ:AMZN) in Latin America; despite past challenges, it managed to report impressive revenue numbers.
In its first-quarter results, the company saw revenue double to $4.3 billion, and active buyers jumped 16% year over year to 53.5 million. The company has opened a new revenue stream through a loyalty program that will offer free shipping in addition to several other benefits. The stock might feel expensive right now, but it has a lot of momentum on its side.
Eli Lilly (LLY)
Trading at $904, Eli Lilly (NYSE:LLY) stock is up 52% YTD and almost 100% in the past 12 months. It has gone from $452 in June 2023 to close to $900 today. With the ongoing rally, it could hit $1,000 very soon. The biotech stock is at a 52-week high but will keep moving upwards.
Eli Lilly has enjoyed tremendous success from its weight loss and diabetic products, Zepbound and Mounjaro. It reported a 26% YOY jump in revenue to $8.8 billion in the first quarter, driven by these products. Additionally, its Alzheimer’s drug, Donanemab, recently got FDA approval, boosting the stock. These three drugs are blockbusters for the company and generate a significant part of the revenue. Eli Lilly has a massive market for weight loss and Alzheimer’s drugs.
Management has raised the revenue outlook 2024 from $42.4 billion to $43.6 billion. It currently has a portfolio that caters to diseases that impact a large part of the population globally. Promising products can generate strong growth for the business, and if you are a long-term investor, you could make bigger gains.
The company has announced a partnership with OpenAI to develop new treatments to combat drug-resistant diseases. The market is very optimistic about the biotech company’s future, and it could report another strong quarter of revenue growth.
Costco Wholesale (COST)
A top retail stock, Costco Wholesale (NASDAQ:COST) is a great long-term investment. The company sells a range of products at low prices and has a subscription model that has worked in favor of the business. Up 31% YTD, the stock is exchanging hands for $855 and has a long way to go. It is up 63% in the past 12 months and over 220% in the past five years.
The business has a membership-based model, where consumers pay $60 annually to shop at Costco locations. Management hasn’t raised its fees in a while and isn’t ready to. It generated $2 billion in operating income, with the most coming from membership fees.
If the company decides to hike the membership fees, it could benefit the business significantly, even if the hike is by $5. Its renewable rate is an impressive 90.5%, which means cancellations or any negative impact could be minimal. At the end of the first quarter, Costco had 73.4 million paid memberships, up 7.8% year over year. As a long-term investor, consider Costco a membership-driven business, not just merchandise sales.
There is so much more to Costco. It enjoys stellar financials, consumer loyalty, impressive free cash flow and massive expansion plans, which make COST stock a solid bet.
On the date of publication, Vandita Jadeja 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.
