In 2024, UBS expects disinflation and rising unemployment to impact economic output, prompting the Federal Open Market Committee to implement proactive rate cuts. The FEderal Open Market Committee designed the initial cut to prevent the nominal funds rate from becoming overly restrictive amid falling inflation, with subsequent cuts later in the year to counteract economic weakening. This means that in order to shield yourself from any economic recession affecting your portfolio, invest in these three undervalued stocks to triple your money that can only rise in price.
Five Below (FIVE)
Five Below (NASDAQ:FIVE) is a leading high-growth value retailer. The company offers trend-right, affordable products catered to tweens, teens and beyond. Vendors price most items between $1 and $5. Five Below’s stock is priced at around $182.32, with analysts providing a price target range of $175.00 to $235.00.
With a market cap of around $10.15 billion, Five Below exhibits a robust financial profile. Boasting a profit margin of 8.35%, the company achieved a remarkable 13.50% year-over-year revenue growth, reaching $3.25 billion. The stock is valued at around $182.32, demonstrating a resilient 52-week change of 14.88%.
To execute its Triple Double growth strategy, FIVE unveiled plans to add seven new outlet locations this year. This is in collaboration with mall operator Simon. This expansion aligns with Five Below’s ambitious vision to triple its store count to more than 3,500 locations by the end of fiscal 2030. As part of this growth initiative, 400 new stores are slated to open in fiscal 2023. From there, there are plans to accelerate to 550 to 600 new stores in fiscal 2024 and 2025. The strategic collaboration with Simon and the incorporation of higher-priced Five Beyond formats in existing locations underscore Five Below’s commitment to national expansion and sustained growth.
These factors position FIVE as a stock worth considering.
Brookfield Renewable Partners (BEP)
Brookfield Renewable Partners (NYSE:BEP) holds one of the largest worldwide traded platforms for renewable power and solar companies. The portfolio spans five continents and is aimed at primarily holding sustainable energies as the growth catalyst. Brookfield Assessment Management started the company. Overall, year-to-date, BEP has a slight decline in growth of 7.33%, but prospects aim for a great 2024.
The sustainable energy industry holds strong growth prospects for the upcoming future, with revenue in 2022 being marked at $970 billion and projections for 2032 at $2.2 trillion. Overall, this marks a well-balanced 8.50% 10-year CAGR between 2022 and 2032. Specifically solar power, a nine-year CAGR between 2023 and 2032 is marked at 13.5%, showing great promise for success.
Brookfield Renewable Partners posted solid financial statements for Q3 2023, backboned by a revenue gross of $1.18 billion in revenue, or a year-over-year growth increase of 6.7%. Furthermore, both diluted EPS and net income grew yearly, with YoY increases of 61.86% and 64% respectively.
Ultimately, the largest catalyst behind Brookfield Renewable’s future success comes from the diverse portfolio. It also comes from recent acquisitions which will promote growth. In 2022, BEP purchased Urban Grid, a company focused on utility-scale solar energy. They do so in hopes of the solar aspect of its portfolio. Results have already been noted, with BEP’s United States renewable energy development pipeline tripling results.
PayPal Holdings, Inc. (NASDAQ:PYPL)
PayPal Holdings, Inc. (NASDAQ:PYPL) has long been a stalwart in the digital payments arena, commanding a 42% market share globally. Despite its impressive standing, the company has experienced an 80% stock price decline from its peak in July 2021, sparking debates over whether it’s a value trap or an enticing bargain.
PayPal’s dominance in online payments, with 433 million active accounts across 200 markets, is a testament to its widespread trust. Its strategic integration into the Apple ecosystem, allowing users to link PayPal and Venmo cards to Apple Pay, further extends its reach, dispelling notions of competition with Apple. This move aligns with PayPal’s growth strategy, leveraging partnerships to enhance accessibility.
In valuation, three scenarios were considered, with the best-case value at $84.71, the base case at $74.69, and the worst at $64.40. Even in the most unfavorable scenario, the stock price surpasses the current valuation, indicating substantial undervaluation.
However, risks loom, including increased competition, regulatory changes, and economic slowdowns. Despite these challenges, PayPal’s fundamental strength, consistent revenue growth, and strategic initiatives position it as a compelling buy. The recent change in management and the share buyback program add positive notes to the outlook. In conclusion, PayPal presents an attractive investment opportunity, meriting a “Buy” rating.
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.
