Looking back, 2021 was a golden year for growth stocks. But it didn’t take much time for sentiments to reverse when tight monetary policies translated into a big correction in 2022. The current year has seen mixed results, and I would classify it as a year of consolidation and selective buying.
As the markets start to focus on 2024, I am of the view that the bottom-up approach to investing will be the best growth strategy to focus on. This would imply looking at attractive individual growth stocks rather than pursuing a specific sector or theme. Looking for growth stocks that are attractively valued and can potentially surprise you with the growth trajectory should be a key focus right now.
While estimating potential returns from any growth stocks is nearly an impossible task, I would not find it surprising if these three stocks double during the next year. Let’s discuss the fundamental reasons that back this bullish view.
Archer Aviation (ACHR)
Archer Aviation (NYSE:ACHR) stock has surged by almost 170% in the last 12 months. The stock, however, remains attractively valued considering its impending growth in the next 24 to 36 months. With ACHR stock in a range of consolidation, it’s a good time to accumulate.
One of the biggest signs of the company’s forthcoming growth is its order backlog of $142 million with the U.S. Air Force. Additionally, Archer Aviation recently signed a contract with Air Chateau International, one of the leading private aviation operators in the United Arab Emirates (U.A.E.), worth $500 million. Deals have been signed in India as well to offer Archer’s electric vertical take-off and landing (eVTOL) aircraft for use as air taxis starting in 2026.
It’s worth noting that the company is on track to launch eVTOL aircraft in the U.S. in 2025. Given these developments, it’s clear that Archer is positioned for significant growth acceleration in the next 36 months. As commercialization of flying cars nears, I expect ACHR stock to skyrocket.
Hecla Mining Company (HL)
There are several reasons to like Hecla Mining Company (NYSE:HL), a precious metals mining company based in Idaho. First, the stock is a hidden gem that looks attractive after trading sideways in the last 12 months. Second, the outlook for precious metals is positive for next year, and gold already trades above $2,000 an ounce. Besides gold production, Hecla is the largest silver miner in the U.S.
Furthermore, Hecla Mining is positioned for accelerated production growth next year. Higher production coupled with better price realization will translate into significant cash flow upside. To put things into perspective, their Lucky Friday mine is currently suspended but is expected to resume production in early 2024. Their Keno mine is anticipated to become a major production contributor next year as well. These two mines ramping up in 2024 should lead to increased profits.
Another point to note is that Hecla’s costs to mine and produce silver are attractive compared to its peers. Given the relatively low all-in sustaining cost (AISC), I expect EBITDA margin expansion and cash flow upside next year. This is another factor that’s likely to translate into HL stock growth.
Marathon Digital (MARA)
In the last bull market for cryptocurrencies, Marathon Digital (NASDAQ:MARA) traded above $75. A big correction followed and MARA stock has been largely ignored since then. With renewed positive sentiments for Bitcoin (BTC-USD), Marathon Digital might be poised for a big comeback in 2024.
In my opinion, Marathon Digital is a dark horse thanks to its recently reported hash rates. As of Q3 2022, the company had an installed hash rate of 3.8 EH/s. A year late in Q3 2023, the hash rate swelled to 23.1 EH/s, an increase of over 500%. By the end of the year, Marathon expects capacity at 26 EH/s. In 2024 another 30% growth in capacity is expected as well.
Therefore, the key point is that Marathon Digital is positioned for massive growth in revenue and cash flows in the coming years. Of course, the necessary condition is that Bitcoin remains on an upward trend. But assuming that the cryptocurrency trades above previous highs, I would expect 2x to 3x returns from MARA stock next year.
On the date of publication, Faisal Humayun 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.
