3 Massively Undervalued 10-Bagger Stocks to Buy

Stocks to buy

If you’re on the lookout for the best undervalued stocks to buy now, look no further. Savvy investors are always looking for cheap businesses with substantial growth potential. Below are three companies that have the potential to expand in value tenfold. They are commonly called “10-bagger” stocks because of their unique capabilities and prospective trajectories, making them exceptional possibilities for big profits.

The first stock, a leader in school bus manufacturing, has a record of net sales and a substantial EBITDA margin, demonstrating outstanding financial success. This is further supported by a significant rise in backlog and a strategic shift towards higher-margin alternative-powered cars.

Meanwhile, the second one, in the healthcare industry, has successfully enrolled patients for its therapeutic trials and has a progressive clinical pipeline. These achievements highlight the company’s ability to provide ground-breaking cures, as does its solid financial situation, supported by recent investments. Finally, the third one has proven to be very resilient financially, with strong year-over-year (YOY) growth in net income. This increase results from the company’s skillful cost and operational management.

Undervalued Stocks to Buy: Blue Bird (BLBD)

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With a 15% YOY rise, Blue Bird (NASDAQ:BLBD) derived a record quarterly net sales revenue of $346 million (Q2 2024). For Q2, the firm generated adjusted EBITDA of $46 million, an all-time high representing a 13% margin. The fact that Blue Bird was able to achieve a notable rise in net sales revenue suggests that there is a robust market demand for its products, especially school buses. Moreover, the company has an ideal adjusted EBITDA margin due to effective pricing and cost-control techniques, enabling good profitability despite supply chain difficulties.

In Q2, Blue Bird had about 5,900 buses in its firm order backlog. This was almost 30% more than the backlog from the previous quarter and represented over $850 million in sales. Q2’s ratio of incoming orders to units sold, which topped 60%, reflects strong demand and a promising order pipeline.

Finally, Blue Bird has concentrated on higher-margin cars, with almost 55% of all unit sales in Q2 being alternatively powered by the company. Thus, electric vehicle sales had a robust growth trend, accounting for 9% of total unit sales.

CalciMedica (CALC)

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In Q1 2024, CalciMedica (NASDAQ:CALC) enrolled 216 individuals in the Phase 2b CARPO study of Auxora (a clinical trial to assess Auxora’s safety and effectiveness in a specific group). This shows that the clinical trial procedure was successful and advanced. The company should make the trial’s top-line results public in Q2 2024. The company will soon release the results after completing the registration process, indicating that its pipeline is progressing and effectively meeting clinical milestones.

Moreover, in February 2024, the U.S. Food and Drug Administration approved the Phase 2 KOURAGE study. The trial’s data may be out in 2025, providing a vital schedule for the next benchmarks. Through this trial, the company broadens its therapeutic uses beyond acute pancreatitis and diversifies its pipeline. Indeed, the start of this trial is a sign of continued research and development efforts to investigate additional indications and increase the potential market share of CalciMedica’s treatments.

Lastly, CalciMedica executed a private placement in January 2024, obtaining a maximum of $54 million in gross funds. As of March 2024, the company had over $25.7 million in cash. To sum up, CalciMedica anticipates that this cash will allow it to continue functioning throughout H2 2025.

Power Solutions (PSIX)

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In Q1 2024, Power Solutions (OTCMKTS:PSIX) had a gross margin of 27%, indicating a solid rise of 6.8 percentage points against Q1 2023. The company’s capacity to increase profitability is to make more money from every dollar of sales. Meanwhile, it skillfully controls overhead and manufacturing costs, which this increase in gross margin reflects.

Moreover, against Q1 2023, when net income was $3.7 million, Power Solutions’ Q1 net income of $7.1 million represented a considerable rise, indicating an astounding 91% YOY increase in net income. The net income boost indicates the company’s capacity to handle expenses proficiently, optimize operational efficacy, and seize market prospects despite obstacles like interruptions in the supply chain.

Finally, in 2024, Power Solutions effectively lowered its debt by $5 million in Q1. The debt decrease demonstrates Power Solutions’ dedication to improving capital structure and deleveraging, improving financial flexibility, and lowering interest rate risk. Hence, after experiencing periods of negative shareholder equity, Power Solutions made a big reversal, returning positive shareholder equity of $3.2 million. 

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.

Yiannis Zourmpanos is the founder of Yiazou Capital Research, a stock-market research platform designed to elevate the due diligence process through in-depth business analysis.

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