3 Overlooked Stocks to Triple Your Investment by 2025
Discovering stocks below the surface is similar to uncovering treasures in uncharted territory. Delving into the lesser-popular fraction of the stock market, this article explores three often overlooked companies. Each entity carries unique growth narratives, often obscured by the more prominent market players.
The first one’s strategic market diversification across industries like healthcare, defense and communication networks provides a solid foundation for sustained growth. The second’s pioneering foray into AI-driven dynamic audio ads and adaptive advertising strategies underscores its potential in digital advertising. Meanwhile, the third one’s subscription model and aggressive retail expansion initiatives hint at an upward trajectory.
Read the article to learn about these stocks and their untapped potential, offering substantial investment growth by 2025.
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Sanmina (SANM)
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Sanmina (NASDAQ:SANM) has solid topline growth that is fundamental for market value expansion. The company has delivered revenue growth of 13% year-over-year in fiscal 2023. This growth trajectory suggests the company’s diversification across multiple markets contributes significantly to its stability against fluctuations in any segment.
For instance, the industrial segment constitutes approximately 22% of the revenue for fiscal 2023, focusing on areas like renewable energy, factory automation, power controls and semiconductor processing equipment. This segment’s demand for semiconductor lithography equipment and factory automation implies a healthy market outlook and potential growth avenues.
In the medical sector, which accounts for around 20% of revenue, Sanmina concentrates on disposable, wearable and consumable medical products and laboratory diagnostic and research equipment. Despite short-term demand adjustments post-COVID, the company remains well-diversified across various medical sub-segments, positioning the company to capture the growth prevailing in the burgeoning digital health market.
On the other hand, defense and aerospace contribute approximately 18% to Sanmina’s revenue, focusing on defense equipment, safety and security systems, and commercial aerospace products. With steady demand in these areas and a robust pipeline, the company may continue to materialize its long-term growth potential.
In the Communication Networks and Cloud Infrastructure segment, which constitutes approximately 40% of revenue, Sanmina specializes in high-performance networks, optical systems, routers, and edge-based GPU platforms. Despite short-term softness due to inventory adjustments, the company anticipates solid demand growth based on AI technologies, broadband expansion initiatives in the U.S., and opportunities in India’s communication and cloud infrastructure markets.
Finally, Sanmina’s strategic market diversification provides a solid foundation for sustained market value growth through capitalizing on expansion across various sectors.
Perion (PERI)
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Perion (NASDAQ:PERI) launched WAVE, an AI-driven dynamic audio ads solution. This innovative product caters to the expanding US digital audio ad market, projected to reach $6.8 billion in 2023. WAVE’s ability to generate tailored audio messages based on various factors, such as context, behavior, and demographics, suggests Perion’s focus on leveraging cutting-edge technology for personalized advertising.
Towards the bottom line, Perion’s operational efficiency improvements, evidenced by reduced OpEx and cost of sale to 19% of revenue from 20% in 2023, indicate the company’s focus on streamlining operations and optimizing cost structures. The company reported an increase in adjusted EBITDA per full-time equivalent employee (FTE) from 66K to 84K over the previous year. This productivity improvement suggests Perion’s capability to enhance efficiency and extract greater value from its workforce.
Additionally, Perion’s agility in responding to market trends and consumer behavior drives its growth. There is a strategic decision to shift inventory from video to display advertising, resulting in higher profitability and reflecting Perion’s adeptness in adapting to the potential of different advertising streams. Examples of high-impact live-connected TV advertising, such as integrating ads during peak moments in live sports, exemplify Perion’s ability to capture viewer attention effectively. Hence, the company capitalizes on changing consumer viewing habits and preferences.
Specifically, the company also witnessed a substantial 20% increase in search advertising revenue year-over-year. This growth surpasses the expected U.S. search-advertising spending growth, demonstrating Perion’s ability to outperform market trends in this segment. Finally, Perion’s capability to swiftly adapt its advertising strategies to align with emerging market trends solidifies its progressive market valuation.
GoPro (GPRO)
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GoPro’s (NASDAQ:GPRO) subscriber base (and its growth) is a key factor impacting its market valuation—ending Q3 2023 with 2.5 million subscribers, reflecting a robust 20% year-over-year growth. High subscriber attachment and retention rates indicate customer satisfaction and a compelling value proposition. Thus, the subscription service drives revenue and fosters customer loyalty and recurring income streams.
Additionally, maintaining strong subscriber growth relies on continuously delivering value-added services. GoPro’s focus on enhancing the subscription offering aligns with customer needs and preferences. Subscriber growth also signifies market acceptance and a growing user base, solidifying GoPro’s position as a leader in the action camera industry. Retaining subscribers through consistent service improvements and value propositions ensures a steady revenue stream. Therefore, this contributes significantly to the company’s bottom line.
In detail, the retail expansion strategy to aggressively expand its retail presence can be observed in GoPro’s goal to add 3K additional global retail doors by 2024. There is a substantial 30% increase from their 2023 growth strategy. The successful addition of 2.5K retail doors as of Q3 2023 underscores the company’s focus on rapid expansion.
Fundamentally, efforts are to improve in-store brand presence, point-of-purchase displays, and enhanced account management within these new retail locations. Hence, expanding retail channels aligns with their growth strategy to capture a broader market share, especially in the post-pandemic era.
Finally, the increased retail presence amplifies product visibility and supports brand recognition and customer accessibility. Hence, an expanded retail network ensures geographic diversity, reducing reliance on specific markets and broadening GoPro’s value potential.
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.
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