In stock investments, seasoned investors often seek high diamonds in rough — undervalued stocks with the potential for astronomical returns. A millionaire’s calculated bet can be reflected in these seven stocks, each representing a unique sector and promising significant growth.
Leading the pack is the first stock, flaunting remarkable top-line growth and an impressive track record of closing high-value deals. Meanwhile, navigating the digital advertising realm, the second one outpaces industry expectations with an 81% revenue surge. The third one’s prowess in the tech industry sees it surpassing revenue projections and strategically monetizing its expanding user base.
Similarly, the fourth stock on the list takes center stage in growth capital, boasting a resilient portfolio and positioning itself for the next wave of expansion. Notably, the fifth one’s robust liquidity and balanced leverage approach make waves in the shipping industry, ensuring stability and sustainable growth. Interestingly, the sixth has diversified revenue streams, and operational excellence showcases its resilience. Finally, the seventh’s focus on AI and GPU solutions propels it to the forefront of technological advancements.
The article explores the potential of these millionaire-approved stocks and their pathways to a possible 10-fold return.
Palantir (PLTR)
Palantir’s (NYSE:PLTR) growth in the U.S. commercial space is critical to its overall progress, as evidenced by its 33% year-over-year growth in Q3 2023. Palantir’s capability to attain growth suggests robust demand for its solutions within the U.S. market. This growth outpaces general industry trends and positions Palantir as a leader in providing analytics solutions to commercial entities.
Besides strategic commercial contracts, the U.S. commercial business grew by 52% year-over-year and 19% sequentially. The growth is organic growth caused by customer demand within the commercial segment. Also, the U.S. commercial business is marking a 55% year-over-year increase on a dollar-weighted duration basis. This substantial revenue growth aligns with the number and scale of deals closed by Palantir in the U.S. commercial segment. The company closed 80 deals of $1 million or more, 29 deals of $5 million or more, and 12 deals of $10 million or more in Q3.
Finally, Palantir’s achievement of a ten-fold increase in U.S. commercial customer count over the last three years is a fundamental milestone. In this direction, a 12% quarter-over-quarter increase in customer count highlights the sustained growth trajectory.
Perion (PERI)
Perion’s (NASDAQ:PERI) retail media solutions have experienced tremendous progress. For instance, in Q3 2023, revenue increased 81% year-over-year. This success is attributed to new customer acquisition and deepening relationships with existing customers, leveraging technologies such as WAVE. Hence, the increased revenue surpasses the expected US retail media growth of less than 20% in 2023.
Fundamentally, Perion is not merely riding the wave of market growth but actively steering it. The ability to exceed industry growth expectations suggests that the company’s retail media solutions are competitive and highly sought after by advertisers. Also, the lead in retail media is not solely attributed to financial gains. This signifies Perion’s proficiency in understanding the nuances of consumer behavior and preferences. Therefore, this allows the company to create tailored solutions that resonate with advertisers and drive meaningful results.
Lastly, Perion’s retail media success is based on its customer-centric approach, edgy solutions and ability to outperform market expectations. This is positioning the company as a leader in this lucrative segment of digital advertising.
Opera (OPRA)
In the tech industry, Opera (NASDAQ:OPRA) has demonstrated a fundamental capability to generate substantial revenue, outperforming guidance. For instance, the reported revenue of $102.6 million in Q3 2023 surpassed the projected $98-$100 million range. Also, it marked a vital step by exceeding $100 million in quarterly revenue.
In the same context, Opera’s 20% top-line growth in Q3 further solidifies a progressive trajectory for future revenue streams. Also, Opera’s leads are not solely measured by financial metrics. The growth of its user base and the average revenue per user (ARPU) are indicators of the company’s market reach and monetization strategies. In Q3 2023, Opera reported a considerable boost in its Western user base. Hence, this contributed to an 11% sequential growth in ARPU and a 24% year-over-year increase, reaching $1.31.
Overall, the increase in ARPU demonstrates Opera’s ability to monetize its user base effectively. Also, it implies that Opera is growing its user base by extracting more value from each user. Therefore through targeted advertising, premium services, and other monetization channels.
TPG (TPG)
TPG’s (NASDAQ:TPG) growth capital business has maintained a robust and healthy portfolio, evidenced by the nearly $9 billion of unrealized value across funds. This portfolio resilience is particularly vital in a backdrop of higher interest rates.
Moreover, the mid-teen revenue growth observed in the growth portfolio (Q3 2023) signifies the underlying companies’ capacity to generate substantial top-line expansion. This growth represents TPG’s strategic selection of companies with solid market positions, innovative products or services, and effective execution strategies.
Furthermore, the first close process for the sixth growth fund is accelerating, highlighting TPG’s confidence in the availability of compelling investment opportunities. As the existing supercycle of flagship funds nears its end, TPG is strategically positioning itself for the next wave of growth.
Thus, these moves suggest a positive perspective on deal flow and market conditions as well as the potential for value creation in the growth equity space.
Frontline (FRO)
Frontline’s (NYSE:FRO) liquidity, which stands at $715 million in cash as of Q3 2023, is a significant strength. This liquidity includes the undrawn senior unsecured revolving credit facility and the minimum cash requirements (for the bank) as of Q3 2023.
In industries with significant capital requirements, like shipping, having substantial cash on hand allows the company to counter economic adversities and capitalize on strategic opportunities. Additionally, the leverage ratio of 52% further supports the company’s growth stability. This ratio indicates the proportion of debt in the company’s capital structure.
Finally, the acquisition of 24 VLCCs may be financed through a bank facility, cash proceeds from the sale of Euronav shares, in-house cash, a senior unsecured revolving credit facility, and funds from shareholders of Hemen. Hence, this balanced leverage take is beneficial for Frontline to minimize financial risk and ensure sustainable value growth.
Celestica (CLS)
At the top line, the breakdown of revenue by segment reveals the diversity and strength of Celestica’s (NYSE:CLS) business portfolio. The Advanced Technology Solutions (ATS) segment contributed 42% of total revenues (Q3 2023). Meanwhile, the Connectivity & Cloud Solutions (CCS) segment contributed 58%. This revenue mix highlights balanced diversification in the top-line. Thus, this diversification positions Celestica to counter fluctuations in specific markets and capitalize on growth across different segments.
At the bottom line, Celestica’s attainment of a non-IFRS operating margin of 5.7% marks the 15th consecutive quarter of year-to-year expansion. This highlights the company’s focus on operational excellence. The CCS segment’s margin reaching 6.2%, a 1 percentage point increase year-over-year, is a significant milestone, representing the highest-ever segment margin.
Lastly, Celestica’s effective working capital management was reflected in the inventory reduction of $85 million sequentially and $65 million year-over-year. This demonstrates the company’s focus on efficient resource utilization. Therefore, there is positive free cash flow for the 19th consecutive quarter, with $34 million in Q3, demonstrating Celestica’s strong cash-generation capabilities.
Super Micro (SMCI)
The focus on AI-related platforms and GPU solutions as primary growth drivers suggests Super Micro’s (NASDAQ:SMCI) edge on industry trends. In Q1 fiscal 2024, over 50% of total revenues will come from AI, GPUs and rack-scale solutions. The company is positioned at the forefront of the AI and high-performance computing markets. This aligns with the broader industry trend of increasing reliance on AI and GPU technologies for various applications.
Fundamentally, Super Micro’s focus on technology leadership is evident in its continuous development and launch of innovative products. The numerical trend of launching new AI-optimized platforms, including NVIDIA’s (NASDAQ:NVDA) CG1, CG2, Grace Hopper Superchip, and NVIDIA Grace CPU Superchip, highlights the company’s commitment to staying ahead in a rapidly evolving industry.
Additionally, the diverse AI solution portfolio, encompassing Intel (NASDAQ:INTC) Gaudi 2, PCIe Flex, PVC, AMD (NASDAQ:AMD) MI250, MI300X, and MI300A, positions Super Micro for broad adoption in the accelerated compute market. A broad product portfolio caters to diverse customer needs and reduces dependence on specific technologies or suppliers. Overall, Super Micro’s strategic focus on being a first-mover in the market aligns with its strategy of staying at the forefront of tech advancements.
As of this writing, Yiannis Zourmpanos held long positions in PLTR and INTC. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
