Back in 1960, there was a movie called “The Magnificent Seven.”
Inspired by famed Japanese director Akira Kurosawa’s classic Seven Samurai, the movie follows seven hired gunfighters trying to liberate a village from oppressive bandits.
Starring a host of current and future Hollywood superstars (Yul Brynner, Steve McQueen, and Charles Bronson among them), the movie is one of the greatest westerns ever made.
The movie was remade in 2016 with big names such as Denzel Washington and Chris Pratt.
Flash forward to 2023… and the “Magnificent Seven” took on a whole new meaning.
Bank of America analyst Michael Harnett began using the phrase to describe a group of mega-cap tech growth stocks: Alphabet, Inc. (GOOG), Amazon.com, Inc. (AMZN), Apple, Inc. (AAPL), Meta Platforms, Inc. (META), Microsoft Corporation (MSFT), NVIDIA Corporation (NVDA) and Tesla, Inc. (TSLA).
These elite Big Tech companies were dominating the broader market at the time… and continue to do so… with their strong returns. That’s because they’ve been at the forefront of disruptive innovation in areas like electric vehicles, cloud computing and artificial intelligence.
In 2023, the S&P 500 finished with a 24% gain, and technology stocks led the overall market higher. You can see how the Magnificent Seven performed in the chart below…
I should point out that the Magnificent Seven are all mega-cap heavyweights. And since the S&P 500 is weighted by market capitalization, these stocks accounted for about 28% of the S&P 500’s weighting. So, they have a powerful effect on the broader market. Although the rally did broaden out in the second half of the year, there’s no denying the influence these stocks have in the market.
However, change is in the air this year, and money is on the move.
Specifically, money is starting to pour into small- and mid-cap stocks.
Now, I’m not suggesting that you should dump the Magnificent Seven out of your portfolio. And I’m certainly not saying you shouldn’t own any large-cap stocks, either. But it’s clear to me that money is flowing into other stocks that are prospering from explosive sales and earnings growth.
The reality is that there are great opportunities in stocks that can outperform these heavyweights this year. I’m talking about quality stocks with superior fundamentals that will continue to boast strong earnings and sales growth.
So, in this report, I’m going to show you seven companies that are poised to beat the Magnificent Seven this year. With strong sales growth and profits ahead, these stocks are must-haves for your portfolio as we navigate through the year…
Stock #1: CrowdStrike Holdings, Inc.
CrowdStrike Holdings, Inc. (CRWD) is in the lucrative cloud security business. It offers real-time endpoint security, threat intelligence and cloud workload protection. The company aims to prevent cyberattacks on and off an enterprise’s network.
The company’s platform, The CrowdStrike Falcon, utilizes its proprietary CrowdStrike Threat Graph to identify security threats and prevent data breaches. CrowdStrike boasts that its platform combines AI and machine learning with behavioral analytics and 24/7 threat hunting, all in one solution to protect all workloads on the network – cloud-based, on-premise and virtual environments.
Currently, CrowdStrike offers 27 modules on its Falcon platform, which includes next-generation antivirus protection, identity protection, cloud security, threat intelligence, threat hunting and real-time visibility into an organization’s network. The company notes organizations that utilize the CrowdStrike Falcon XDR platform identify 96% more threats in half the time.
For its fiscal year 2024, CrowdStrike achieved earnings of $751.8 million, or $3.09 per share, and total revenue of $3.06 billion, beating expectations of $2.95 per share and revenue of $3.05 billion for full-year 2024. For full-year 2025, analysts expect revenue between $3.925 billion and $3.989 billion and earnings per share between $3.77 and $3.97.
Stock #2: Dorian LPG Ltd. (LPG)
Dorian LPG Ltd. (LPG) operates a fleet of “very large gas carriers,” or VLGCs, that primarily haul liquified petroleum gas around the world. The company’s fleet consists of 22 VLGCs, each with the capacity to carry 1.8 million cubic meters (cbm). Dorian LPG has offices in the United States, the United Kingdom, Greece and Denmark. Plus, it partners with several big-name oil companies, including BP, Petrobras and Shell.
Due to record natural gas production and steadily rising crude oil production, America is reasserting its energy clout and helping the world break away from Russian crude oil. In fact, the U.S. recently reported record energy exports.
In January 2023, the U.S. exported 1.53 million barrels of crude oil per day – and there weren’t any releases from the Strategic Petroleum Reserve during this time. As the U.S. continues to ship more crude oil and natural gas overseas, there’s one industry that should reap the rewards: tanker and liquified natural gas, LNG, shipping companies.
I should add that Bloomberg reports there is a lack of LNG to satisfy world demand in a transition to a green economy. This means Dorian LPG should be able to charge high day rates for its ships. What’s more, global coal consumption continues to steadily rise, because emerging markets like China, India, Indonesia, Malaysia and Vietnam rely on coal for cheap electricity. There is no doubt that burning natural gas is cleaner.
Given this, Dorian LPG should benefit immensely. For full-year 2024, analysts expect earnings of $7.88 per share and revenue of $573.41 million, up from earnings of $4.22 per share and revenue of $389.75 million a year ago.
Stock #3: M-tron Industries, Inc. (MPTI)
Back in 1965, M-tron Industries, Inc. (MPTI) got its start by developing and producing monolithic crystal filters. Simply put, the company develops frequency and spectrum control solutions. In addition to its monolithic crystal filters, M-tron Industries also produces radio frequency (RF), microwave and millimeter wave filters; amplifier products; crystal resonators; oscillators and clocks; cavity, ceramic and switched filters – and more!
Since its founding more than 58 years ago, M-tron has developed more than 9,500 unique products, and its solutions are sold to more than 800 customers around the world. The Orlando-based company’s customers primarily operate in the aerospace, commercial, defense, military and space markets. I should add that it has shipped more than 29 million products in the last five years alone.
For full-year 2024, analysts expect earnings of $1.95 per share on revenue of $46.8 million, up from earnings of $1.72 per share and revenue of $41.6 million a year ago.
Stock #4: Novo Nordisk A/S (NVO)
Novo Nordisk A/S (NVO) develops treatments to combat diabetes, obesity and other chronic illnesses, as well as rare blood and rare endocrine diseases.
With headquarters in Copenhagen, Denmark, Novo Nordisk operates 80 offices around the world, and its products are available in 170 countries. Breaking it down further, the biotech company has 16 production sites in nine countries, as well as 10 research and development facilities in five countries.
Novo Nordisk dominates the diabetes treatment market, and its main goal is still to develop a cure for type 1 diabetes and help prevent type 2 diabetes and obesity. To do this, Novo Nordisk provides care to more than 30,000 children with type 1 diabetes through its Changing Diabetes in Children program, and it aims to help more than 100,000 children by 2030. It also slashed the cost of insulin in low- and middle-income countries.
In regard to treatment options, Novo Nordisk offers a variety of insulin pens for folks to administer their diabetes medication, as well as provides injection needles and growth hormone pens. The company has also developed several medications for the treatment of obesity, diabetes, hemophilia and growth disorders, as well as hormone replacement therapies.
You’ve likely seen commercials for one of Novo Nordisk’s diabetes treatments, Ozempic. And unless you have just rejoined society after living alone in the mountains for a few years, you have definitely heard about celebrities and social media influencers using it as a weight-loss treatment. Novo does not yet recommend Ozempic for that use, but we are sure shareholders are happy with the increased demand for the treatment, which should boost the company’s top- and bottom-line growth this year.
For full-year 2024, analysts expect earnings of $3.90 per share on revenue of $40.8 billion, up from earnings of $2.22 per share and revenue of $31.83 billion in full-year 2023.
Stock #5: Powell Industries, Inc. (POWL)
Powell Industries, Inc. (POWL) focuses on the development and manufacturing of equipment and systems for electrical infrastructure. These systems are used by petrochemical plants, and also pulp and paper mills, oil and gas producers, utilities and transportation facilities. The company’s operations are spread around the world, with facilities in the United States, as well as the United Kingdom, Canada, Singapore, United Arab Emirates and Bahrain.
Through these sites, Powell Industries provides systems and products for the distribution and control of electrical energy and other processes. Here is a sampling of the products that Powell Industries offers: switchgears, circuit breakers and power rectifiers, as well as distribution systems, high resistance grounding, EV charging solutions, heat tracing and motor controls. Powell Industries also provides a variety of engineering, procurement, integration and construction services.
For fiscal 2024, analysts expect earnings of $7.69 per share and revenue of $841.82 million, up from earnings of $4.50 per share and revenue of $699.0 million.
Stock #6: Super Micro Computer, Inc. (SMCI)
Founded back in 1993, Super Micro Computer, Inc. (SMCI) has been at the forefront of technological change, developing a lot of firsts in the industry: the very first x86 server boards based on Orion semiconductors, the first server boards to support Intel Pentium processors, the first redundant cooling power supply, the first dual Intel Xeon server – just to name a few!
Today, Supermicro is well known as a global leader in high-performance server technology solutions. The company continues to provide a wide range of servers, storage, motherboards, workstations and networking solutions, as well as server management software. Supermicro’s solutions are utilized in several markets, including artificial intelligence, 5G, Internet of Things (IoT), data centers, cloud computing, big data, enterprise, embedded and edge computing.
While the company’s main headquarters are in Silicon Valley, Supermicro has operations in more than 100 countries around the world. And the company has a 3-million-square-foot global manufacturing footprint.
Supermicro is also a well-known, global leader in high-performance server technology solutions. The company primarily provides a wide range of servers, storage, motherboards, workstations and networking solutions, as well as server management software. And like NVIDIA, Supermicro is well positioned to profit from the rising demand for AI technologies.
For full-year 2024, analysts expect earnings of $21.83 per share on revenue of $14.49 billion, up from earnings of $11.81 per share and revenue of $7.12 billion in full-year 2023.
Stock #7: UFP Technologies, Inc. (UFPT)
Back in 1963, the team behind UFP Technologies, Inc. (UFPT) developed specialty packaging (foams, films and plastics), devices and components for use in the medical field. Primarily, its products were utilized in disposable wound care, infection prevention, medical devices, minimally invasive surgery, orthopedic soft goods and implants, and wearables.
Today, UFP Technologies still designs and manufactures specialty packaging and custom-engineered products for the medical industry, as well as for the aerospace, automotive, consumer, defense, electronics and industrial markets. As an example of the company’s products, UFP Technologies offers…
- Door panels, engine filtration, gaskets, interior trim, sound dampening, molded foam and sunshades for the automotive industry
- Safety components, seals, gaskets and insulations for the aerospace industry
- Cleaning erasers, foams for helmets, laminates and nail care abrasive products for the consumer market
- Uniforms and gear from the defense industry
- Microphones, windscreens and ink jet cartridges for the electronics industry
- Filtration, gaskets, safety belts, thermal insulation and sound management for the industrial industry.
UFP posted solid results for its third quarter, but the stock sold off sharply. Shares have rebounded strongly, so this dip appears to just be profit taking.
UFP has yet to report results for fiscal 2023. But analysts expect $5.38 in earnings on $393.15 million in revenue. For fiscal 2024, analysts expect earnings of $6.01 per share on $426.7 million in revenue.
There’s Always a Bull Market Somewhere
There’s always a bull market somewhere – and right now the bulls are piling into fundamentally superior stocks that will profit from runaway inflation.
The companies we discussed today… seven stocks that I believe will outperform the Magnificent Seven this year… fit this description to a “T” and are great bets for your money in 2024.
I hope you found this special report useful. Before we go, let me remind you that you’re now also a member of my free Market 360 newsletter.
In Market 360, we discuss a variety of topics, ranging from the latest happenings in the markets to updates on stocks, earnings, exciting new trends and much, much more. Keep an eye on your email inbox for my next Market 360 article soon. I typically send them every Tuesday, Thursday, Friday and Saturday. In the meantime, you can check out the Market 360 archive by clicking here.
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Sincerely,
Louis Navellier
Editor, Market 360
