Much as in the recent Major League Baseball draft, I’m on the lookout for potential. You should be, too, when it comes to filling out your roster of top stocks. I’m focused on getting A-rated stocks, but I also want those that have the potential to provide big returns in the coming weeks and months.
The second half 2024 looks to be a challenging time for investors. It’s election season and according to the pundits and the polls, there’s a good chance that we’ll see a changing of the guard in Washington. Already, we’re seeing the impact on the stock market, with tech stocks taking a significant backward step this week.
In volatile times like this, I want the security of A-rated stocks. Stocks get that top ranking from the Portfolio Grader, a free tool that rates stocks based on earnings performance, growth, momentum and analyst sentiment. That last factor is particularly important as we consider which A-rated stocks have the most upside potential.
A-rated stocks are the perfect holding for investors as we head for Election Day and the volatility that is inevitably coming our way.
Here, we’ll look at seven A-rated stocks from the Portfolio Grader rankings, discuss how they got here and look at how analysts see the stocks moving forward. Any of these would be a smart choice for investors in today – and tomorrow’s – market.
Chipotle Mexican Grill (CMG)
No matter what happens with the political scene in the next six months, you can bet on one thing – people are going to be hungry, and they’ll be lining up for burritos and burrito bowls from Chipotle Mexican Grill (NYSE:CMG).
Chipotle is arguably one of the best restaurant stocks you can buy. Not only does its menu stand out from the chicken and burger places competing for market share, but Chipotle stands out for its culture.
The company owns every single one of its 3,400 locations – no franchises – so it can maintain consistency through all of its restaurants. It also famously forsakes freezers, microwaves and other restaurant shortcuts.
Revenue in the first quarter was $2.7 billion, up 14.1% from a year ago. Comparable restaurant sales were up 7% and operating margins rose from 15.5% to 16.3%. Look for those margins to continue as the company reports second-quarter earnings on July 24.
Chipotle also recently completed a 50-for-1 stock split to make shares more accessible to retail investors. Shares are currently $55, but analysts have a consensus price target of $66 for CMG stock, which is up 21% in 2024.
It gets an “A” rating in the Portfolio Grader.
Super Micro Computer (SMCI)
Super Micro Computer (NASDAQ:SMCI) was one of those tech stocks that hit a bump this week on two pieces of troubling news.
First, there are reports that the U.S. is considering additional restrictions on chip companies sending their products to China. And second, former President Donald Trump suggested that Taiwan should pay the U.S. for military protection.
While those pieces of news pushed Supermicro stock down 7% in a day, it’s more important to keep our eyes on the big picture. That’s the fact that Supermicro plays an essential role in building the server infrastructure needed to bundle graphics processing units to run the most advanced artificial intelligence programs.
Supermicro provides custom server architecture solutions to bundle GPUs and allow them to work together.
Supermicro is reportedly providing and assembling half the racks AI-supercomputer racks that xAI, the artificial intelligence startup operated by Elon Musk, is creating to develop an AI chatbot to rival ChatGPT.
The company is seeing massive growth, with sales of $3.85 billion in the third quarter of fiscal 2024, up from $1.28 billion a year ago. Net income of $402 million was up from $86 million a year ago.
Supermicro stock currently trades at $816, but has a consensus price target of $1,026, suggesting potential upside of 25%. It gets an “A” rating in the Portfolio Grader.
CrowdStrike (CRWD)
CrowdStrike (NASDAQ:CRWD) is a top player in the cybersecurity space. As more of our personal and professional lives, as well as things like our medical histories and our financial records, are stored on cloud servers, cybersecurity will continue to become more essential.
CrowdStrike uses AI and machine learning to stop threats in real time. Its cloud-native Falcon platform provides endpoint protection, cloud workloads, identity and data.
CrowdStrike also offers modules that companies can use to customize their products. The modules, which include things like endpoint security, data security, IT operations, threat intelligence and more, serves as a successful business plan because customers can always start small and add on as they go.
Roughly 65% of CrowdStrike’s customers purchase and use at least five modules. Revenue for the company’s first quarter of fiscal 2025 was $921 million, up 33% from a year ago. Subscription revenue was $872.2 million, up 34% from the first quarter of fiscal 2024.
CrowdStrike stock currently trades at $354, but analysts have a consensus price target of $402. The stock is up $18% this year and gets an “A” rating in the Portfolio Grader.
Novo Nordisk (NVO)
Novo Nordisk (NYSE:NVO) is a European pharmaceutical company that’s making a killing from weight-loss medications. Wegovy was approved in 2021 to treat obesity in the U.S., where an estimated 42% of the adult population is considered obese.
Last month, Novo Nordisk announced it would invest $4.1 billion to expand its North Carolina manufacturing facility to help fill the demand for Wegovy and other drugs.
The company is also getting a benefit from the U.K., where regulators approved Novo Nordisk’s weight-loss treatment, opening a new customer and revenue stream.
Novo Nordisk has another huge drug on the market, Ozempic, which is a treatment for type 2 diabetes. Earnings for the first quarter included days of 65.3 billion Danish kroner ($9.46 billion), up 22% from a year ago. Operating profit was up 27%, and net profits were up 29%.
Novo Nordisk reported earnings per share of 5.68 Danish kroner (85 cents per share), which was up 29% from a year ago.
The stock currently trades at $135, but analysts’ consensus estimate is $147. NVO stock gets an “A” rating in the Portfolio Grader.
Deckers Outdoor (DECK)
Deckers Outdoor (NYSE:DECK) is a shoe company that operates the brands Hoka, Teva, Ugg and Sanuk. Its most popular items include Hoka running shoes, Teva sandals and Ugg boots.
Earnings for the fourth quarter of fiscal 2024 (ending March 31, 2024) included revenue of $959.8 million, up 21.2% from a year ago. Of that, $533 million came from Hoka sales, which were up 34% from a year ago.
Ugg was the other big revenue source, with $361.3 million in sales, up 14.9% from a year ago.
Deckers is expecting 2025 sales to increase 10% to $4.7 billion for the year, and earnings per share to be between $29.50 and $30. Deckers currently trades at $889 with analysts’ consensus price target of $1,071, indicating a 20% growth runway.
DECK stock gets an “A” rating in the Portfolio Grader.
Chubb (CB)
Chubb (NYSE:CB) is a Swiss insurance and reinsurance company. Operating in 55 countries and territories, Chubb is the largest publicly traded property and casualty insurance company in the world.
In investing circles, Chubb got a lot of attention this year when it was revealed that Warren Buffett’s Berkshire Hathway (NYSE:BRK-A, NYSE:BRK-B), took a $6.7 billion stake in CB stock, holding 25.92 million shares as of the end of the first quarter.
As Buffett and Berkshire are heavily involved in the property and insurance fields, the Oracle of Omaha’s bet on Chubb is a sign of approval and is noteworthy of attention.
Chubb reported first-quarter net income of $2.14 billion, up 13% from a year ago, and operating income of $2.22 billion, up 20.3% from last year.
Chubb stock trades at $267, while analysts’ consensus price target is $273. It gets an “A” rating in the Portfolio Grader.
AppLovin (APP)
AppLovin (NASDAQ:APP) is a software and artificial intelligence company that works with mobile devices, connected TVs or within smartphone apps. It operates marketing software to allow app developers to find and connect with customers.
The company’s AI platform, AppDiscovery, provides AI-based advertising engine to help customers scare their growth. Another product, Max, helps app developers monetize their products.
The company reported first-quarter revenue of $1.06 billion, up 48% from a year ago. Much of that growth came from software platform revenue, which was up 91% to $678 million for the quarter.
The company posted net income of $236 million for the quarter, compared to a loss of $4.5 million in the first quarter of 2023.
APP stock trades at $80 per share with a consensus price target of $93. It gets an “A” rating in the Portfolio Grader.
On the date of publication, Louis Navellier had long positions in SMCI, CRWD, NVO and DECK. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.
The InvestorPlace Research Staff member primarily responsible for this article had a long position in SMCI. The InvestorPlace Research Staff member did not have (either directly or indirectly) any other 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) and positions in the securities mentioned in this article.
