If you’re looking for robust returns and can handle the potential for near-term volatility, then the concept of targeting up-and-coming stocks could be right for you. By this category, I’m not necessarily referring to entities that just incorporated a few days ago. Rather, I’m talking about companies that launched their initial public offerings (or IPOs) within the past few years.
New but not-too-new IPOs offer speculators a sweet spot. Typically, a company that’s about to make its public market debut enjoys significant hype. Following the actual launch, the new entity could skyrocket. However, the ground-floor investors – the folks that started buying in from the very beginning – often decide they’ve profited enough. They leave and sentiment crumbles.
After the fallout, investors reexamine the opportunity and may discover that the company is now undervalued. They start buying in and what do you know? The equity is back in business. That could be the case for these up-and-coming stocks.
Amer Sports (AS)
Falling under the consumer cyclical sector, Amer Sports (NYSE:AS) is based in Helsinki, Finland. Per its public profile, Amer designs, manufactures, markets, distributes and sells sports equipment, apparel, footwear and accessories in multiple international markets. It also sells products under well-known brand names such as Wilson and Louisville Slugger.
Amer is no spring chicken, with a history extending back several decades. However, it just had its IPO earlier this year. In that contest, AS easily qualifies for one of the up-and-coming stocks. To be fair, it’s had a shaky financial performance, posting a loss of 8 cents per share for the fourth quarter of 2023. In contrast, analysts anticipated a loss of only 1 cent.
Still, it rebounded with a strong outing in Q1 2024, generating an earnings surprise of 300%. During the trailing 12 months (TTM), Amer incurred a net loss of $222.5 million on sales of $4.5 billion. For fiscal 2024, experts anticipate earnings per share of 40 cents, a huge different from last year’s loss of 24 cents.
On the top line, sales could hit $5.02 billion, an increase of 14.4%. Combined with a strong buy rating, AS ranks among the up-and-coming stocks to consider.
Global-E Online (GLBE)
Based in Israel, Global-E Online (NASDAQ:GLBE) also operates in the broader consumer cyclical space. More specifically, it focuses on Internet retail. Per its corporate profile, Global-E with its subsidiaries provides a platform to enable and accelerate direct-to-consumer cross-border e-commerce transactions. Through its platform, both shoppers and sellers can seamlessly transact in a global network.
Founded in 2013, GLBE stock enjoyed its IPO in 2021. Therefore, it technically ranks among the up-and-coming stocks. Financially, Global-E has been mitigating expected losses per share. Over the past four quarters, its “earnings” surprise came out to 9.65%. What’s appealing here is that GLBE trades at 9.22X trailing-year revenue. Over the past year, its sales multiple averaged 12.54X.
During the TTM period, Global-E incurred a net loss of $122.77 million or 74 cents per share in the red. Revenue during the cycle hit $598.19 million. For fiscal 2024, experts believe in a vastly more favorable loss per share of 52 cents. On the top line, revenue might land at $749.59 million, up 31.5% from the prior year. In fiscal 2025, sales might rise again to $985.78 million.
Hillman Solutions (HLMN)
Headquartered in Forest Park, Ohio, Hillman Solutions (NASDAQ:HLMN) falls under the industrial sector. Specifically, the company deals with tools and accessories. Its profile states that with its subsidiaries, Hillman provides hardware-related products and related merchandising services in the U.S. and other regions. It offers a wide range of products, including solutions for electrical, plumbing and automotive applications.
While it might not sound like the most exciting idea among up-and-coming stocks, analysts appreciate HLMN stock, rating it a consensus strong buy. Moreover, the average price target stands at $12.33, with a high-side estimate of $16. Financially, Hillman – which entered the public market in late 2020 – has been a relatively strong performer. In the past four quarters, its average earnings surprise came out to 21.53%.
During the TTM period, Hillman incurred a net loss of $1.95 million or 1 cent per share. Revenue in the cycle hit $1.48 billion. Analysts believe that for fiscal 2024, EPS may rise 17% to reach 48 cents. On the top line, sales could see a modest bump up of 2% to $1.51 billion.
On the date of publication, Josh Enomoto 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.
