ON - 3 Sleeper Stocks to Buy in July Before They Ascend to New Heights
2024-07-20 06:50:00 ET
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There currently exists a number of promising sleeper stocks to buy in 2024. Industry tailwinds, management’s strong execution and improving financial results are the three driving factors to position these companies to ascend to new heights.
While well-known companies tend to capture the market headlines, these hidden gems can put investors on a clear path to wealth creation. These companies are well established in their industries, with robust earnings growth and cash flows from operations. Furthermore, they have yet to be recognized despite their long-term growth potential.
By the time the market catches on, these stocks might have already taken off. This is why investors must strategically adjust their portfolios to capitalize on the upside potential. With a small allocation set aside, investing in these sleeper stocks can be an incredibly rewarding decision.
Now, here are the top three sleeper stocks to buy now before they ascend to new heights!
Republic Services (RSG)
Republic Services (NYSE: RSG ) is a company in the waste management industry that has been around for nearly three decades. Despite its impressive financial performance over the last three years, it largely flies under the radar as compared to its peers such as Waste Management (NYSE: WM ).
Republic Services is one of the top sleeper stocks to buy for investors looking for a more stable investment. While it is nothing like a high growth technology stock, its consistent revenue growth and stable cash flows make it extremely compelling. Additionally, RSG is making key investments in renewable energy projects. This includes areas like renewable natural gas as well as expanding its recycling and waste collection fleet with fully electric trucks .
In Q1 FY24 , revenue increased 8% year over year to $3.86 billion. Net earnings rose 18% year-over-year to $454 million, with adjusted EBITDA margin up more than 100 basis points. CEO Jan Vander Ark remains confident in delivering another outsized year in revenue, earnings, EBITDA and free cash flow in the 2024 fiscal year.
Fiserv (FI)
Fiserv (NYSE: FI ), a global provider of financial technology services stands out as one of the best sleeper stocks to buy in 2024. The company provides a wide range of service offerings including payment processing, risk management and fraud prevention tools.
Fiserv is a very important asset to financial institutions across the U.S. Its services enable them to meet the evolving needs of their customers in a world where nearly every transaction is done online. This is no easy task, especially as cyber crimes and fraud continue to rise. The company’s goal is to address industry problems and allow businesses of all sizes to embrace digital transformation, reduce costs and be in compliance with all laws.
Its growth-through-acquisitions strategy has truly done wonders for the business, leading to significant revenue, earnings and margin expansion. After delivering record financial results in FY23, momentum is set to continue in 2024. Management raised its full-year guidance and forecasts approximately 16% revenue growth and 15% adjusted earnings per share growth . This strong outlook positions the company to outperform going into the end of the year.
ON Semiconductor (ON)
ON Semiconductor (NASDAQ: ON ) is the final sleep stock on the list with tremendous long term growth potential. Its silicon carbide modules are integral to high-growth industries like electric vehicles (EVs), energy storage system, and the Internet of Things (IoT). Additionally, its forward price-to-earnings ( P/E ) ratio of 18 makes the stock extremely compelling as compared to many of its semiconductor counterparts in 2024.
ON Semiconductor’s long term growth prospects are largely tied to the EV and energy storage markets. Both of these industries have experienced a significant slowdown in the past 24 months, as inflation and higher interest rates crushed demand. However, this is only temporary and the global economy’s transition to net zero emissions is only beginning.
The company has also remained extremely resilient. It is navigating headwinds in the economy while making strategic investments and expanding its manufacturing capacity. Earlier this month, it announced the acquisition of intelligent image sensing company, SWIR Vision Systems . Additionally, its investments in Bucheron, South Korea will bring its SiC wafer capacity to more than 1 million annually. With recent add-on investment of up to $2 billion in the Czech Republic, the future remains extremely bright.
On the date of publication, Terel Miles 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 .
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Terel Miles is a contributing writer at InvestorPlace.com, with more than seven years of experience investing in the financial markets.
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