Finding millionaire-next-door stocks can be extremely exciting for investors who aspire to retire comfortably. However, the reality is that very few investors have the strategic foresight or the patience to accomplish such a dream.
The truth is that a majority of investors will be better off parking their hard earned cash in Exchange-Traded-Funds to avoid making rash decisions. Buying and selling companies on the stock market is not the hard part, the waiting is. This becomes especially true when investing in growth stocks that have multi-year and even decade tailwinds ahead of them.
Additionally, there is not one size fits all approach to becoming a millionaire. If you’re a more risk-averse investor, then this route likely is not for you. However, those seeking to potentially outperform the market long-term should watch these three companies closely for the month of August.
Now, let’s unpack the top three millionaire-next-door stocks to keep on your radar this August!
CACI International (CACI)
CACI International (NYSE:CACI) stands out as one of the top millionaire-next-door stocks in August. The company is uniquely positioned to benefit from increased demand for cybersecurity and IT solutions in the intelligence and defense sectors.
CACI International is having itself an incredible year in 2024 thus far. The stock is currently up more than 40% year-to-date, and recently closed out a monster 2024 fiscal year. Moreover, it has continued to see positive trends in defense spending from different branches of the U.S. federal government. This backdrop translated to annual contract awards in excess of $14 billion, with a healthy book-to-bill ratio of 1.9x.
In addition, CEO John Mengucci’s forward guidance was in line with estimates. The company achieved organic revenue growth in the mid teens as well as strong free cash flow generation. In FY24, revenue increased 14% year-over-year to $7.7 billion, with net earnings up 9% to $420 million. With FY25 revenue projected at $7.9-$8.10 billion and adjusted net income in the $505-$525 million range, the future is bright.
Stride (LRN)
Stride (NYSE:LRN) is another compelling choice that could make investors extremely wealthy. This company has been on a roll since the pandemic, and its strong cash flow and earnings growth provide ample room for long term upside.
Stride is a lesser-known company making significant strides in the online education space. It offers a hybrid learning environment for K-12 students, but has been a leader in online education software for over two decades. In addition, the company’s high customer satisfaction has been a huge contributor to its success. Its balance sheet is also extremely healthy and serves as a testament to management’s prudent risk management practices.
More recently, Stride closed off another record year as one of America’s most successful e-learning companies. In FY24, revenue increased 11% year-over-year to a record $2.04 billion. Adjusted EBITDA grew to a record $390.7 million, with free cash flow at record highs of $276 million. Stride enrollment trends remain extremely positive, pointing to strong guidance for when it releases its Q1 FY25 earnings results.
Qualys (QLYS)
Qualys (NASDAQ:QLYS) is the final company on the list that may have the most potential of the bunch. The stock is down 35% year-to-date, despite its strong financial performance in the 2024 fiscal year.
Qualys is a leader in the cloud-security race that has tremendous long term potential. The last few years have been nothing short of sensational, with the company reporting compounded revenue, earnings, and free cash flow growth. Furthermore, Qualys has continued to innovate on its flagship vulnerability management platform, TruRisk. The company is pushing full steam ahead to capitalize on the generative AI boom, with the introduction of Qualys TotalAI. The platform includes a holistic approach to secure generative AI and large language model applications.
Its growth also continues to accelerate in 2024, despite the stock significantly underperforming the broader market. In Q2 FY24, revenue increased 8% year-over-year to $149 million. Additionally, net earnings increased 24% year over year to $44 million, while maintaining strong cash flow from operations. As the cybersecurity sector takes off, Qualys remains one of the best millionaire-next-door stocks to buy in 2024 and beyond.
On the date of publication, Terel Miles 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.
On the date of publication, the responsible editor did not have (either directly or
indirectly) any positions in the securities mentioned in this article.
