Contrarian investing can prove incredibly fruitful, with a narrow group of tech stocks still driving the market. With investors still flocking towards AI, it’s an excellent time to invest in these stocks vanquishing naysayers.
By going against the grain, contrarian investors look to scoop up overlooked stocks at a discount, positioning themselves for robust gains. However, this article focuses on stocks drawing subdued analyst sentiment yet continuing to perform remarkably well. Curated using the Gurufocus screener, these three stocks attract a consensus “hold” rating while posting double-digit one-month gains.
Robinhood (HOOD)
Since its IPO, Robinhood (NASDAQ:HOOD) has taken its investors on a tumultuous ride. But, the past year has been incredibly rewarding. HOOD stock surged over 146% last year and is up more than 82% year-to-date (YTD). Wall Street expects a breather in HOOD stock following those record gains. However, that expectation hasn’t materialized, with it gaining over 40% just this month.
The incredible surge in value is linked to the firm’s robust top-line growth, a rise in customer engagement and its best quarterly profit post-IPO. Crypto and equity markets have been performing remarkably well. Especially following recent interest rate cuts, suggesting a promising sentiment shift ahead.
In its Q1 report, the company announced a GAAP EPS of 18 cents, surpassing expectations by a notable 12 cents. Moreover, its revenues shot up $618 million, marking a substantial 40.1% increase year-over-year (YOY). Also, transaction-based revenues surged by 59%, buoyed by a remarkable 232% surge in crypto revenues to $126 million. Additionally, HOOD announced its first-ever stock buyback program. The company plans to repurchase $1 billion of its shares over the next three years, underscoring its positive outlook.
Jumia Technologies (JMIA)
Jumia Technologies (NYSE:JMIA) is effectively spearheading the African digital revolution. JMIA is showcasing resilience and promising growth under the leadership of CEO Francis Dufay. Despite a lull in its business, the firm’s recent quarterlies point to a resurgence, with sales up a healthy 18.4% YOY to $48.9 million. On a constant currency basis, this growth balloons to a whopping 57%.
Particularly, its fintech arm in JumiaPay has experienced a healthy uptick, with transactions soaring 52% YOY. Additionally, its adjusted EBITDA loss is down more than 80%, a testament to its management’s effective cost control and top-line expansion efforts. Moreover, most of its cash reserves are held in U.S. dollars, which positions it remarkably well in navigating currency devaluations.
As Jumia continues expanding its footprint across the continent, it remains a compelling investment proposition in Africa’s burgeoning eCommerce landscape. According to a report from IMARC Group, the African eCommerce market is set to grow to a massive $939.8 billion by 2032, exhibiting a 14.4% CAGR.
United Natural Foods (UNFI)
United Natural Foods (NYSE:UNFI) is one of North America’s top wholesale distributors of health and specialty foods. It’s been on a healthy run in the past few weeks. Proving naysayers wrong, UNFI stock is up over 40% this month and more than 16% in the past week.
Though it has had a patchy track record over the past couple of years, its recent results suggest it’s finally hitting its stride again. Its ongoing cost-cutting measures and efficiency improvement efforts led to an adjusted EPS beat by seven cents to 10 cents. Moreover, its management’s stellar execution led to the firm revising its adjusted EPS range for fiscal year 2024. The updated expectations for the full year range from a loss of 20 cents per share to a profit of 20 cents, compared to the previous range of a loss of 56 cents to a profit of just six cents.
Consequently, UNFI stock is up over 37% for the month, which makes it an excellent pick for those looking to wager on stocks vanquishing naysayers.
On the date of publication, Muslim Farooque 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.
