The ultimate goal of investing is to find possibilities poised for significant development. Michael Burry, a well-known investor, has recommended these three equities as strong candidates for profitable investments. Each firm represents a separate sector: retail, healthcare, and consumer discretionary.
The first is a massive worldwide e-commerce company that stands out for its unwavering commitment to user-centric methods and aggressive pricing structures. Its remarkable Gross Merchandise Value (GMV) growth and rapidly increasing user engagement point to enormous potential for further growth.
The second, a mainstay of the healthcare sector, demonstrates adaptability and a variety of income sources. Its revenue growth across several divisions shows stability and long-term survival, especially amid obstacles like market pressures and cyberattacks. The third one is a success story on the retail front, taking advantage of the rising demand for low-cost goods. The company may have long-term top-line growth and profitability. This is due to careful cost control and a concentrated strategy to boost price penetration.
These stocks are appealing due to their proactive approaches and historical success. Every business exhibits flexibility to prosper in the face of unpredictability.
Alibaba (BABA)
The user-first and competitive pricing techniques employed by Alibaba (NYSE:BABA) in Taobao and Tmall Group have led to a robust GMV rise in the company year-over-year (YoY). Solid growth in the number of orders placed and the number of active purchasers point to high user engagement and transaction activity. The platform is becoming increasingly merchant-friendly at a double-digit growth rate, boosting its competitiveness and range of products.
Additionally, with a 44% increase in international digital commerce sales YoY, Alibaba International Digital Commerce (AIDC) has experienced significant revenue growth. This includes AliExpress and Cainiao. The rise has been attributed to improvements in the shopping experience and the rise of cross-border offers across all of AIDC’s retail platforms. Cainiao’s creation of cross-border logistics fulfillment solutions and a worldwide smart logistics network has boosted revenue and created synergies with cross-border e-commerce.
Finally, with over 60% YoY order growth on AliExpress, AIDC’s business strategy and supply chain services upgrade have propelled fast expansion, reflected in the AE Choice model. Therefore, by decreasing barriers for merchants, delivering a differentiated variety to the platform, and providing trusted cross-border shipping and other services, the model optimizes the supply chain and the consumer experience.
CVS Health (CVS)
The Health Care Benefits Segment of CVS Health (NYSE:CVS) had a revenue increase of almost 25% YoY (Q1 2024), with sales reaching $32 billion. The expansion of Medicare, individual exchanges, and commercial group products were the main drivers of the income rise.
Further, the number of medical members also rose. This was 1.1 million in a row, up to 26.8 million. The revenue in the Pharmacy & Consumer Wellness Segment reached around $29 billion, up about 3% YoY. In detail, increased prescription volume, immunization contributions, and pharmacy medication mix drove up income.
Moreover, CVS Health’s revenue growth across several business categories demonstrates the breadth of its line of business. CVS Health showed resiliency by generating revenue growth despite difficulties like the cyberattack on Change Healthcare and headwinds in the Medicare Advantage market.
Lastly, CVS Health concluded the quarter with over $1.9 billion in cash, which indicates the company’s steady liquidity position. Overall, long-term growth may stem from the company’s fundamental capacity to adjust to unfavorable situations and maintain sales momentum.
Big Lots (BIG)
Surpassing their initial aim of one-third of sales, Big Lots (NYSE:BIG) has made great progress in growing the penetration of discount products. These products comprised approximately 60% of sales in Q4. The firm wants to increase the percentage of sales from discounts to 75%. For example, extremely low prices on food, hair care, bedding, laundry, and kitchenware have shown good sell-through rates. This is a sign of consumer demand and the ability to drive growth in sales on par.
Moreover, Big Lots has exceeded its guidance by saving over $140 million in selling, general, and administrative expenses over the year, demonstrating its effective cost management and productivity growth. Compared to the previous year, the corporation cut CapEx by about 60% and inventories by approximately $200 million. Liquidity has been further boosted by monetizing assets valued at over $300 million.
Looking forward, the Big Lots’ approach has five main pillars. These are owning deals, expressing unwavering value, boosting retail relevance, gaining lifelong consumers through omnichannel initiatives, and boosting productivity. Overall, these initiatives may bring in additional gains in gross margin and comparable sales in 2024.
As of this writing, Yiannis Zourmpanos held long positions in BABA and CVS. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
