The recent surge in official interest rates, the most substantial in 40 years, is anticipated to impact aggregate demand significantly. This could potentially result in a GDP reduction of approximately 4 percent for the current year, followed by an additional 1% decrease in 2024. Despite these headwinds, it has led to this list of stocks to buy.
Looking forward to 2024, the economic landscape is expected to face headwinds as the spending of excess savings diminishes, fiscal policies tighten, and the delayed effects of monetary tightening take hold. This collective scenario suggests a less resilient US economy.
Given these considerations, investing in companies poised to weather these economic challenges strategically becomes imperative. Here are three up-and-coming stocks for ensuring profitability in this uncertain economic climate.
So here are the best stocks to buy to exploit these uncertain economic conditions.
Sarepta Therapeutics (SRPT)
Sarepta Therapeutics (NASDAQ:SRPT) is a biotech company specializing in medical research and drug development. Yahoo! Finance has 18 analysts predicting a 1-year price range on SRPT to be between $139.00 and $220.00, with a mean of $180.61.
SRPT boasts strong financials. In Q3 2023, $331 million in revenue grew at a 44.1% 1-year CAGR, and a $0.37 EPS up 146% YoY demonstrates signs of being undervalued. Revenue further outpaced operational expenditure growth of 15.5% YoY.
Sarepta shows superior growth potential compared to its competitors from its government approval for a phase three trial drug and a new partnership. In June, Sarepta received U.S. FDA approval for pediatric patients ages 4-5 with ELEVIDYS. ELEVIDYS is a gene therapy for Duchenne Muscular Dystrophy (DMD), a genetic disorder in which the proteins that protect muscle fibers are altered and cause the muscles to atrophy, occurring in newborns.
This approval is groundbreaking as it marks the first-ever approval of gene therapy for DMD, making them first to market. Sarepta has also forged a strategic partnership with Quest Diagnostics to identify patients eligible for ELEVIDYS, creating a pipeline of patients for the company’s new gene therapy.
SRPT is in an attractive position for investors because of its strong financials and how it’s the first company with an FDA-approved treatment for DMD.
Nexgel (NXGL)
Nexgel (NASDAQ:NXGL) is a leading provider of high-water-content hydrogels for healthcare and consumer applications. Nextgel has formulated over 200 combinations to bring natural ingredients to gentle skin patches worn with minimal irritation.
NXGL stock is up 45.04% YTD. The healthcare market is projected to grow from $10.06 billion in 2022 to $69.63 billion by 2029 at 31.8% CAGR.
Nextgel boasts strong financials. Quarterly revenue increased 108.02% YoY to $1.17 million, and EPS grew 28.53% YoY to -$0.14. Cash from investing has risen by 176.31% to $4.12 million, and net change in cash grew to $2.90 million, showing adequate financial stability.
Nextgel has secured a pivotal deal with AbbVie to supply hydrogel pads for RESONIC, its FDA-cleared non-surgical cellulite reduction tool. AbbVie, a biopharma giant with a market cap of $250 billion, presents a game-changing opportunity for NexGel.
Speculation is rife that this collaboration could drive significant revenue growth, potentially leading to profitability by Q3 2024. The essential role of NexGel’s pads in powering the RESONIC device ensures a steady demand, particularly as AbbVie aims to deploy around 10,000 devices in the initial three to four years. Initial orders for NexGel’s hydrogel pads could materialize as early as Q1 2024, marking a promising start to this strategic partnership.
NXGL stock is valued at $1.90 and is primed for an explosion in growth as it is already ahead of the competition through partnerships and robust financials. This makes it one of those stocks to buy.
Rocket Lab (RKLB)
Rocket Lab (NASDAQ:RKLB) is a space company with an established track record of delivering satellite manufacture and on-orbit management solutions.
RKLB stock is up 11.63% YTD, putting it in an attractive position for investors. The global rocket propulsion market is anticipated to grow to $10.87 billion at a 7.8% CAGR from 2022 to 2032.
Rocket Lab boasts strong financials. Revenue grew 239.02% YoY to $211.00 million, and EPS grew 78.88% YoY to -$0.12. Total assets grew by 0.84% to $989.12 million, and net profit margin has gone up to -$64.43.
This week, Rocket Lab revealed that it has officially entered into a launch services agreement with the US Department of Defense’s Defense Innovation Unit (DIU). The collaboration aims to conduct a HASTE (Hypersonic Accelerator Suborbital Test Electron) mission, scheduled to take place at Rocket Lab Launch Complex 2 in Virginia. This helps make it one of those stocks to buy.
This mission’s focal point is deploying a suborbital payload designed by the Australian company Hypersonix, known as DART AE. DART AE is a scramjet-powered hypersonic vehicle recognized for its capability to navigate non-ballistic flight patterns at incredible speeds, reaching up to Mach 7 (approximately 8,350 kilometers or 5,320 miles per hour).
Yahoo! Finance analysts have labeled RKLB as a “Buy.” This new contract primes RKLB for an explosion with the stock currently undervalued and poised for growth potential.
On the date of publication, Michael Que 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.
The researchers contributing to this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
