Investment opportunities frequently lie in plain sight. Three such possibilities are tucked away in the stock market. All are priced under $10 and with significant potential for returns.
To begin with, driven by well-timed acquisitions and a spike in output, the first one shines as a growth light in the energy industry. The company’s entry into the Permian Basin’s Central Basin platform may yield higher profits due to a significant rise in sales volumes.
In the meantime, the second one excels in the materials industry, outperforming sales projections and exhibiting remarkable cost savings. The business establishes itself as a strong contender in the precious metals industry by attaining competitive all-in-sustaining costs and upholding low cash expenses.
Finally, the third opportunity boasts robust returns on equity and tangible net asset value. This is a prime example of financial industry resilience and profitability. For those seeking exposure to the banking sector, the business offers stability and development potential with a strong capital adequacy ratio and conservative allocation plans. These factors provide reassurance and optimism for the investment’s future.
Ring Energy (REI)
Over 18 months, Ring Energy (NYSEAMERICAN:REI) completed two purchases. The acquisition of oil and gas assets by Founders and Stronghold Energy II resulted in a 47% year-over-year (YoY) rise in sales volumes (Q4 2023) connected to production. Additionally, the acquisitions increased the company’s undeveloped inventory of extremely profitable drilling opportunities. This strategically placed the company in the Permian Basin’s Central Basin platform.
In Q4, adjusted free cash flow grew 165% YoY over the prior quarter. Strong cash flow creation highlights the company’s capacity to provide sizable returns. This is fueled by more revenue and decreased CapEx. For instance, CapEx for 2024 may cost between $135 million and $175 million. The company’s operational sharpness and capital allocation are reflected in its 2023 cash return on capital employed (CROCE) of 17.2%.
Moreover, for 2024, it is projected that 43% of natural gas sales and 45% of oil sales will be hedged. Sharp hedging reduces the volatility of commodity prices, offering predictable cash flow and a stable top line. Furthermore, Ring Energy maintains certain top-line predictability through its proactive approach to risk management. Overall, the company strategically focuses on debt reduction and conservative capital investment.
SilverCrest (SILV)
By selling 10.25 million ounces of silver equivalent, SilverCrest (NYSEAMERICAN:SILV) breached its sales forecast 2023, reflecting a high demand for its products. This solid sales result reflects the company’s fundamental capability to sell and market its products in the marketplace.
The company exceeded the lower end of the projected range in 2023. It attained an average all-in-sustaining cost (AISC) of $12.58 per ounce. Additionally, SilverCrest showed competitive cost structures and effective cost management techniques. It had cash expenses of $7.73 per ounce of silver equivalent sold.
Moreover, with an exit rate objective of 1,050 tons per day, the business continues ramping up output at its Las Chispas project, with mining rates set to improve in H2 2024. This increase in output demonstrates SilverCrest’s capacity to develop and take advantage of the rising demand for silver. In 2024, SilverCrest has set aside $12 million to $14 million for exploration, emphasizing generating new targets and replenishing reserves.
To sum up, the company focuses on resource expansion, and the discovery of new mineral deposits is reflected in this exploration budget.
Banco Santander (SAN)
Banco Santander’s (NYSE:SAN) financial standing and valuation initiatives are reflected in its return on equity (RoE) and growth of tangible net asset value (TNAV). The return on tangible equity increased by 0.55% YoY to 14.9%; after accounting for temporary taxes in Spain, it reached 16.2%.
Certainly, this enhancement demonstrates Santander’s financial strength and effective uIndeedital. Driven by improved profitability, enhanced shareholder remuneration, and repurchase plans, TNAV plus dividend per share climbed by 14% YoY. Moreover, Santander has demonstrated its dedication to creating shareholder value, as seen by its consistent TNAV growth. This has surpassed €4.5 billion over the past 12 months. Similarly, Santander has consistently grown its TNAV and RoE throughout the years. Hence, this demonstrates its focus on long-term wealth creation and sustainable financial lead.
Furthermore, at 12.3%, the fully loaded CET1 ratio was steady, demonstrating solid capital adequacy. Santander’s capital productivity is improved, and its disciplined capital deployment supports lucrative growth possibilities. Finally, credit quality is still strong, with a consistent cost of risk and minimal loan loss provisions for the whole footprint.
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On the date of publication, Yiannis Zourmpanos did not hold (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.
