Investing in stocks near 52-week lows could offer unique growth opportunities.

The top stock market indices this year have been on fire, and all signs suggest there’s more to come. However, the market focuses mostly on the standout performance of leading AI stocks. In the process, investors have ignored multiple undervalued gems that could offer significant returns as they rebound from their lows.

Moreover, with the first interest rate cut coming up, it’s now an opportune time to invest in these attractive stocks near 52-week lows. Identifying bargain stocks in the current climate could help secure investments poised for incredible long-term growth.
Therefore, three attractive stocks near 52-week lows offer attractive upside potential. These stocks are lingering just 5% above their 52-week lows yet continue to showcase remarkable fundamentals, along with an encouraging outlook ahead.

Five Below (FIVE)

Discount retailer Five Below (NASDAQ:FIVE) is a compelling investment opportunity, having tanked more than 50% year-to-date (YTD). It trades at just 1.48 times forward sales estimates, 55% behind its 5-year average.

Despite facing downward pressure from inflation over the past year, the stock’s fundamentals have remained resilient. In Q1, the firm reported top-line growth of 11.8% year-over-year (YOY), totaling $811.9 million. This superb growth has been fueled by a healthy increase in store count from 1,367 to 1,605, underscoring its potent expansion strategy. As we advance, the firm expects to increase its footprint, with plans to expand to 3,500 stores by the end of the current decade.

Furthermore, despite the drop in its EPS, the company posted an encouraging jump in its adjusted EBITDA from $75.4 million to $78.4 million. Also, its adjusted operating cash flow rose by 3.95% to $73.7 million. Moreover, its cash reserves are mighty encouraging at $369.6 million, and with no debt, enjoying exceptional financial flexibility.

Bumble (BMBL)

Bumble (NASDAQ:BMBL) is one of the top players in the online dating landscape. It stands out for its robust user experience, technological advancements and savvy acquisitions. Recently, Bumble unveiled a flashy rebrand featuring a fresh logo and vibrant new colors that struck a chord with its powerful user base.

Also, the firm’s commitment to leveraging AI is set to revolutionize the matchmaking process. It promises more effective outcomes while saving users time and potential heartache. Additionally, it recently acquired Geneva, a community app connecting people based on shared interests, fostering stronger and more meaningful interactions.

Financially, Bumble continues to impress. During Q1, the firm reported a GAAP EPS of 19 cents, surpassing analyst estimates by 12 cents. Moreover, revenues reached $268 million, marking a 10.3% YOY jump while beating analyst expectations by $2.51 million. Notably, revenue from the Bumble app surged by 11% to $216 million, while paying users surged by 18% to 2.7 million. Moreover, it expects sales to increase by 8% to 11% YOY for the upcoming year, aligning with a $1.15 billion consensus.

Sturm Ruger & Company (RGR)

Sturm Ruger & Company (NYSE:RGR) is a top player in the firearms industry that’s tapping into the fast-growing personal protection market. This positions RGR in an enviable spot, with Americans continuing to purchase firearms at a rapid pace. Hence, the firm is in pole position to continue capitalizing on this growing market.

Lately, the company has been undergoing a comprehensive restructuring, which is likely to significantly impact its bottom line. Furthermore, an election year usually boosts firearm sales, which is expected to increase sales volumes and operational leverage.

Moreover, with new product launches such as the Generation II firearm line, RGR is well-prepared to navigate these headwinds and outperform. This positions the company as a compelling choice for investors seeking long-term growth in its niche. On top of that, the stock is trading at remarkably attractive levels, at just 1.30 times forward sales estimates. Also, it yields an excellent 2.22%, having paid a dividend in the past 13 consecutive years.

On the date of publication, Muslim Farooque did not have (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.