Finance
3 stocks are down 42% to 75% to buy now
The bull market will continue to rage in 2024, with technology taking center stage Nasdaq Composite year to date up 24%. Investors looking for discounted stocks to join the rally have come to the right place. Here are three stocks from leading companies that could be poised for big moves.
1. Carnival
Travel companies have experienced strong demand in recent years Carnival (NYSE: CCL) continues to appear to be one of the best stocks to benefit from this trend. It operates several brands beyond its namesake Carnival Cruise Line.
It owns AIDA Cruises, Costa Cruises, Cunard, Holland America Line, P&O Cruises, Seabourn and Princess Cruises, making Carnival the largest cruise line in the world.
The share price has doubled since 2022, but is 75% below its pre-pandemic peak. The disruption caused by the coronavirus to the travel industry forced Carnival to take on a lot of debt to fund operations, which has weighed on the stock’s performance, but the company’s improving prospects, on top of healthy demand development, are a catalyst for the shares.
Management is laser-focused on improving efficiency across the business to increase profits. It has invested in more fuel-efficient ships in recent years and optimized its pricing strategy to maximize margins.
It also announced earlier this year that it will consolidate P&O Cruises Australia into Carnival Cruise Line, increasing capacity for one of the company’s best-performing brands.
The company reported a noticeable jump in operating profit last quarter, and more improvement should benefit the stock. The shares trade at a modest price future price-earnings ratio (P/E) of 15.5. This is an attractive valuation given Wall Street’s expectation that profits will rise sharply in the coming years.
2.Tesla
Tesla (NASDAQ: TSLA) has become one of the most recognized brands in the automotive industry, which is a remarkable achievement. The electric vehicle (EV) company generated annual revenue of just over $400 million in 2012, but last year sales were $96 billion, which in itself is impressive given the macroeconomic headwinds such as inflation and higher interest rates have on consumer spending weighed. recently.
After falling 42% from the previous peak, Tesla shares have risen sharply over the past month. While the valuation looks very expensive and currently sits at a price-to-earnings ratio of 96, there are a few reasons why this could be the start of a new bull run.
Higher interest rates have made it more expensive to finance the purchase of a new car, contributing to slowing sales growth and a falling stock price last year. But the company said second-quarter deliveries were up 15% from the previous quarter, which could be the start of a trend, especially as the company continues to deliver more Cybertrucks.
With just 1.7 million vehicles delivered last year, Tesla still has a lot of room to gain market share in an industry with more than 80 million vehicles produced annually. This is why management is working to increase production capacity, including expanding production of its own batteries to secure the supply chain of this crucial component.
As the company continues to ramp up production of the Cybertruck, there are plenty of other looming sales opportunities that could drive the stock higher in the coming years, including the Cybercab, Tesla Semi-truck and humanoid robots – all of which reflect Tesla’s growing investments in artificial intelligence . intelligence (AI).
3.Alibaba
Alibaba Group (NYSE: BABA) is the largest online retail company and cloud service provider in China. It also has a growing e-commerce presence abroad with AliExpress.
Alibaba does not sell goods itself, but generates revenue from charging service fees to sellers who list items for sale on its popular e-commerce marketplaces. It’s a profitable company that’s a screaming buy at these low share prices.
The stock is down 75% from its previous high due to slowing sales growth in a weakened Chinese economy. Alibaba has also faced stiffer competition from rival e-commerce companies PDD‘s Temu and JD.com. But sales trends look better in 2024.
It begins to fight back aggressively against competitors. Lower prices led to an increase in the number of buyers and purchase frequency last quarter. Meanwhile, Alibaba’s international expansion efforts are going well, with revenue from its digital commerce segment rising 45% year-over-year last quarter.
Elsewhere, Alibaba’s cloud business is still struggling to emerge from the crisis. Revenue grew just 3% year-over-year last quarter, which pales in comparison to the double-digit growth of other leading cloud companies.
But recent efforts to lower product prices and integrate the major language model Tongyi Qianwen 2.0, a kind of AI model that can learn to write text and create images, show that Alibaba Cloud can potentially return to the double-digit growth it knew for a few years. past.
The stock is up 17% from its 52-week low, but still trades at an ultra-cheap price-to-earnings ratio of 9 times this year’s earnings estimates. It could double in value and still trade at a discount S&P500‘s average price-earnings ratio.
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Johannes Ballard has positions in Tesla. The Motley Fool holds positions in and recommends JD.com and Tesla. The Motley Fool recommends Alibaba Group and Carnival Corp. The Motley Fool has one disclosure policy.
3 stocks are down 42% to 75% to buy now was originally published by The Motley Fool
