As we head into 2024, stocks with growth potential deserve a spot in your portfolio. While remaining overweight on blue-chip stocks, I would consider at least 40% exposure to explosive growth stocks.
Let’s discuss seven stocks to buy for growth and value creation.
XPeng (XPEV)
One of the top stocks with growth potential is XPeng (NYSE:XPEV), which has been trending higher thanks to strong numbers. In November, for example, XPeng reported 245% year-on-year growth in vehicle deliveries to 20,041 vehicles. In November, the Company also unveiled X9, its all-new flagship model.
From a financial perspective, there are two points to note. First, XPeng ended the third quarter with cash and equivalents of $5 billion. Further, the Company expects to accelerate free cash flows in the coming quarters. With high financial flexibility, the Company will be positioned for strong expansion in China and international markets. The Company has plans to enter new European markets like France, Germany, and Britain in the New Year 2024.
MINISO Group Holdings (MNSO)
MINISO Group Holdings (NYSE:MNSO) focuses on lifestyle products and is among the best growth stocks to consider. I’m bullish on the stock for a few reasons. One, the Company focuses on bringing low-cost products to the market, which attracts consumers. Further, the Company has a very dynamic SKU. New products are introduced every week and I would classify Miniso as a fast-fashion retailer. With these differentiating factors, the Company is already making inroads in the global markets.
For the first quarter of 2024, MINISO reported revenue growth of 36.7% on a year-on-year basis to $519.6 million. For the same period, the Company’s adjusted EBITDA margin expanded to 26.8%.
It’s worth noting that MINISO reported 6,115 stores globally as of September. On a year-on-year basis, the Company reported 819 new stores. With an asset-light model and aggressive store expansion, stellar growth will likely be sustained. MINISO has also initiated dividends this year. Margin expansion and free cash flow upside will translate into healthy dividend growth in the coming years.
MakeMyTrip (MMYT)
Another one of the top stocks with growth potential is MakeMyTrip (NASDAQ:MMYT), which provides online travel solutions. Year to date, it’s up about 62% and could trend even higher thanks to positive catalysts.
For one, the Company just posted an operating profit was $70.3 million. That’s a sharp improvement from its operating loss of $98.8 million in financial year 2018. Two, MakeMyTrip has continued to pursue acquisitions to boost its service offerings. Recently, the Company acquired Savaari Car Rentals, a provider of inter-city car rental services in India.
First Solar (FSLR)
It’s been a disappointing year for First Solar (NASDAQ:FSLR). However, with a forward price-to-earnings ratio of 19.6, the solar stock is attractive. My view on the valuation gap is underscored by the point that 23 analysts have a 12-month forward price target of $230. This would imply an upside potential of 48% from current levels.
We also have to consider that First Solar has a total bookings backlog of 81.8GW that extends through 2030. Further, the Company has booking opportunities of 65.9GW. The backlog provides growth visibility for the coming years.
It’s also worth noting that the Company’s first delivery from its India facility is expected in December. In addition, Alabama and Louisiana facilities are expected to be operational in 2024 and 2025 respectively.
Albemarle (ALB)
Albemarle (NYSE:ALB) was on a high-growth trajectory before the correction in lithium prices. While ALB stock has declined by 57% for year-to-date, the Company still expects revenue growth of 35% to 40% for the year. With a strong balance sheet and ambitious growth plans, I’m still bullish.
I must mention that Albemarle has guided for 1,300 basis points contraction in EBITDA margin for 2023. That’s the reason for the stock trending lower even as revenue growth remains robust. However, it’s unlikely that lithium will remain in a downtrend for an extended period. Once sentiments reverse, ALB stock will skyrocket from undervalued levels.
Archer Aviation (ACHR)
It’s difficult to ignore flying car stocks when talking about stocks with growth potential. With several flying car companies nearing commercialization, robust growth upside is on the horizon. I like Archer Aviation (NYSE:ACHR) at current levels and I believe that the stock is a potential 10-bagger.
Among the major developments, Archer is on-track to commercialize flying cars by 2025. As the Company near completion of certifications, ACHR stock is poised to surge higher. At the same time, the Company is looking at global expansion. Archer has already partnered with companies in UAE and India for launch of eVTOL aircraft in these countries in 2026.
The backlog of $142 million from the U.S. Air Force is also significant. It paves way for more orders in the next few years from the defense sector. I am therefore bullish on this potential wealth creator.
Blink Charging (BLNK)
My last stock in the list is a micro-cap name that can deliver 5x to 10 returns. Blink Charging (NASDAQ:BLNK) stock has plunged by 73% for year-to-date. However, I believe that the worst is over and BLNK stock will trend higher in the coming years.
The first point to note is that there is massive investment needed towards electric vehicle charging infrastructure in the U.S. and Europe. Blink Charging has been reporting stellar revenue growth and I expect that trend to continue.
BLNK stock was however depressed due to intense industry competition and cash burn. The Company has however guided for positive adjusted EBITDA by Q4 2024. I’m also bullish on margin improvement for two key reasons. First, operating leverage as Blink grows at a robust pace. Second, as the number of charging stations installed increases, the Company’s recurring (software and services) revenue will swell. This will support margin expansion.
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.
