Many companies have reported very strong, impressive third-quarter results in recent weeks. Among the names in that category were General Electric (NYSE:GE), Caterpillar (NYSE:CAT), JPMorgan (NYSE:JPM), PayPal (NASDAQ:PYPL) and Microsoft (NASDAQ:MSFT). Those companies are likely to perform very well in Q4 and beyond. However, some companies delivered great Q3 earnings which indicate that they are drastically undervalued and are well-positioned to soar three or four fold in the not-too-distant future. For growth investors looking for true home runs, these are the best stocks that are now Q4 post-earnings buys, in my opinion.
American Superconductor (AMSC)
American Superconductor (NASDAQ:AMSC) sells products used to regulate electricity flows. Among its key customers are semiconductor firms, utilities that use renewable energy, mining companies, the United States Navy, and Inox, a leading Indian wind-energy producer.
With electric grids becoming more complicated due to their increased utilization of renewables and many sectors using more electricity than ever before, AMSC’s business is booming.
Last quarter, the firm’s revenue climbed 23% year-over-year to $34 million, and the company generated positive cash flow for the first time in many years, as its cash flow came in at almost $1 million.
Also noteworthy is that the firm has said that it expects the growth of its revenue from Inox and the U.S. Navy to accelerate a great deal in the longer term. Finally, AMSC has indicated that additional cities will likely adopt its Resilient Electric Grid (REG) system, which is currently only installed in Chicago.
According to Science, REG enables “utilities to move bulk power into and around urban areas more compactly than traditional technologies, and potentially encounter less public opposition, all while increasing grid reliability” and “capacity.”
Despite AMSC’s strong results and plethora of significant, positive, potential catalysts, the shares have a rather low forward price-sales ratio of 1.7, making it one of the best stocks to buy after earnings.
Luckin Coffee (LKNCY)
Luckin Coffee (OTC:LKNCY) reported very strong Q3 results on Nov. 1, but Wall Street was unimpressed because of a drop in the company’s profit margins. However, its overall profits rose a great deal. Additionally, large investors are concerned about the outlook of the Chinese economy, which certainly does have its share of problems.
However, I believe that, in the longer run, profits, not profit margins, determine the performance of stocks. Consider that most oil companies have very low profit margins, but many oil stocks have risen tremendously throughout the last few years and in the last eight years.
As for China’s economy, the IMF expects it to expand 5% this year and 4.6% in 2024. If the Asian country’s economy grows at those rates, Luckin will be able to keep thriving.
In Q3, Luckin’s revenue jumped 85% versus the same period a year earlier to $987 million, while its “Same-store sales growth for self-operated stores” jumped 20% year-over-year. Luckin also reported operating income (OI) of 961.7 Chinese yuan, up from 585.3 Chinese yuan in Q3 of 2022. However, its OI margin dropped to 13.4% last quarter from 15% in Q3 of 2022.
Rivian (RIVN)
On Nov. 7, Rivian (NASDAQ:RIVN) reported great Q3 results, as the company’s top line climbed a huge 150% versus the same period a year earlier to $1.34 billion. Furthermore, its annualized production rate jumped to more than 65,000 electric vehicles and it raised its 2024 production guidance to 54,000 EVs from 52,000 EVs previously.
Also importantly, the company is making progress on its gross margins and costs, as its “gross profit per unit delivered in (Q3) improved by approximately $2,000.”
Impressively, RIVN began producing its R1 Max Pack EVs last quarter, which boast a very high “EPA-estimated range of up to 410 miles.”
In a move that’s likely to boost Rivian’s customer base and its long-term revenue outlook., the automaker reported that it would begin selling its delivery vans to companies other than Amazon (NASDAQ:AMZN).
Finally, Rivian’s deliveries jumped 23% in Q3 versus Q2, coming in at 15,564 EVs, while its production climbed 17% to 16,304.
On the date of publication, Larry Ramer held long positions in AMSC and RIVN. His wife held a long position in LKNCY. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
