Betting on the top hidden gem stocks could potentially take your investment portfolio to the next level.
In a year dominated by a handful of tech giants, broadening your portfolio to include high-potential stocks becomes imperative. These stocks have flown under-the-radar, but are positioned for substantial gains ahead of a broader market rally expected later in the year.
Moreover, as their underlying businesses gain popularity, their stock prices will likely surge in tandem, offering early investors healthy long-term gains. Moreover, with relatively low investment costs, hidden gem stocks can help substantially lower risks while offering superb upside potential.
Keeping that in mind, here are three undervalued hidden gem stocks that are positioned for a breakout. These stocks boast strong underlying businesses with healthy long-term growth trajectories that could potentially take your portfolio to the next level. Also, you can load up on these stocks for under $20, like picking up a movie ticket on a discount day.
Cemex (CX)
Despite the bearishness surrounding Mexico following the recent presidential election, Cemex (NYSE:CX) continues to shine with its superb operational performances. In Mexico, where the firm continues garnering a sizable portion of its sales, demand and margins have not only held up but have seen substantial growth. To put things in perspective, its trailing twelve-month (TTM) EBITDA, net income and levered free-cash-flow margins stand at 17.7%, 1.2% and 10.7%, respectively.
Moreover, Cemex’s effective management strategies have allowed it to capitalize on the reshoring and nearshoring wave that’s breathed new life into Mexico’s manufacturing sector. Also, despite the slowdown in growth from the U.S., Cemex remains committed to effectively leveraging large-scale infrastructure projects to maintain momentum.
Hence, with the firm’s management adjusting its strategies to the dynamic market conditions, expect CX stock to continue moving from strength to strength. Moreover, the stock is an excellent buy at current prices, having shed more than 18% year-to-date (YTD). Additionally, Wall-Street analysts assign a moderate buy rating to the stock, offering a 43% upside from current levels.
SoFi (SOFI)
SoFi (NASDAQ:SOFI) is one of the most promising contenders in the fintech space despite its recent shortcomings weighing down its stock. Setbacks from student loan forgiveness policies and rising delinquency rates led to a 21% drop in its price last year. However, its underlying business continues to shine, boasting superb user growth and a notable bump in profitability.
Encouragingly, SoFi has achieved profitability for the past few quarters, a major breakthrough that underscores its operational efficiency. Additionally, the technology platform side of its business continues complementing its loan division, reporting a whopping 54% jump in sales during Q1 of this year. These results indicate SoFi’s potential to capitalize on its diverse business model.
SOFI stock is trading hands for just $7.47, significantly below its all-time high of $25.78. However, given its innovative streak and long-term growth runway, I expect the stock to return to double-digit territory soon.
Grab (GRAB)
Singaporean tech giant Grab (NASDAQ:GRAB) has quickly evolved into a key player in Southeast Asia’s expanding internet economy. As a super app, it offers wide-ranging e-services covering everything from transportation to digital finance across key markets, including Indonesia, Malaysia and Vietnam. Distinguishing it from the pack is its pioneering presence in some of the fastest-growing areas in the world, offering superb long-term prospects.
Financially, Grab continues to impress, having surpassed top-line expectations in the past nine consecutive quarters, while making major strides in improving its bottom-line. In Q1, the firm reported an EPS of negative three cents, a marked improvement that compelled its management to boost EBITDA guidance by $70 million for the upcoming quarter. Additionally, it effectively reduced $134 million in losses during Q1 through efficient cost control and operational optimization.
As we look ahead, analysts project a narrowing of losses to three cents per share this year and anticipate it to break even with a four-cent profit in 2025. Add to that the upcoming interest rate cuts, and you have a recipe for monstrous long-term success for Grab.
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.