Now is an opportune time for long-term investors to put money to work in high-quality companies. History has shown that bear markets and corrections can provide excellent buying opportunities that pay off handsomely down the road.
Further, the latest GDP and unemployment figures remain robust. True, the Federal Reserve is keeping rates elevated for now to cool inflation. Monetary policy would likely become much more accommodative at the first signs of an economic slowdown.
Of course, predicting short-term market moves is notoriously difficult. But holding strong, profitable companies trading at reasonable valuations leaves little room for regret over the long run. Naturally, some caution is warranted in the current environment. Market corrections tend to be short-lived, while long-term returns generated by quality stocks compound year after year.
With an eye toward the long-term, investors with a 5-10-year time horizon will be rewarded by putting money to work today.
Itron (ITRI)
Washington-based Itron (NASDAQ:ITRI) is a technology company creating products and services for energy and water resource management. Its strong Q3 reported results showed EPS of $0.98 beat estimates by $0.47, and revenue of $560.77 million beat by $20.45 million. ITRI has been rapidly regaining lost margins and is on track to deliver meaningful profitability improvements in the future.
As more investors realize ITRI’s potential, the stock is poised for a powerful recovery back toward its previous highs. The massive Q3 earnings beat — with EPS almost doubling analyst estimates — is just the latest sign of the company’s fundamental turnaround.
For 2023, Itron is expected to deliver 20% year-over-year (YOY) revenue growth. Meanwhile, EPS is forecast to explode 151% higher compared to last year. Looking ahead, analysts see EPS reaching $3.80 by the end of 2026. With momentum accelerating, the growth runway is long for ITRI.
Finally, ITRI offers excellent value. Long-term investors would do well to hold this stock for the coming years as margins and earnings power improve dramatically.
High Tide (HITI)
High Tide (NASDAQ:HITI) stands out as a lower-risk play on the cannabis vertical.
Unlike unprofitable peers hemorrhaging cash, High Tide has achieved tremendous growth. It’s on a clear track to turn profitable in 2025. This is largely owed to the company’s innovative discount club model and membership programs, which provide significant high-margin recurring revenue.
After declining for most of the past year, HITI now trades around $1.5, not far above its $1 floor established over the past year. Meanwhile, shares trade at just 0.3 times forward sales, a massive discount to peers.
Of course, the timing U.S. cannabis legalization is unknown. However, High Tide has executed tremendously in Canada, with analysts forecasting EPS to reach $0.65 by 2030. That implies shares trading at only 2.3 times earnings a full seven years out.
Sometimes, the best opportunities come from ignored stocks rather than flashy headlines. HITI fits that bill nicely. Wall Street’s consensus price target puts the upside potential at 166% in one year.
Iteris (ITI)
Clearly, Iteris (NASDAQ:ITI) flies under the radar on Wall Street. ITI operates in the fragmented smart mobility infrastructure management market. However, favorable secular trends and government funding committed through 2026 provide a long runway for expansion. Combined with high switching costs for customers, ITI looks poised for sustainable above-market growth.
With a market cap under $200 million, ITI blew past FY24 Q1 estimates. It delivered EPS of $0.08 versus $0.03 expected on revenue of $43.55 million versus $38.33 million expected. Its next earnings report lands this Thursday, and another beat could truly ignite the stock.
Longer-term, analysts forecast double-digit revenue growth this year and into next. Also, EPS is expected to jump 34% next year, offering a visible growth path if Iteris continues overdelivering.
The company aims to reach $245-265 million in revenue by mid-2026, representing 14% annual growth from current levels. Meanwhile, adjusted EBITDA margins are targeted to reach 17-19% as scale drives profitability higher.
On the date of publication, Omor Ibne Ehsan 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.
