ULTA - Against the Grain Gains: 3 Stocks Defying Wall Street's Expectations

2024-06-13 06:19:00 ET

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It is not unusual for stocks to do better than analysts predict. There are several reasons why this could happen, but it usually means that investors have the opportunity to profit from the market by betting on them. There is a group of investors whose entire strategy is this: to bet on stocks that Wall Street Analysts have written off.

This year, the best-overwritten stocks cover some of the world’s most promising industries, from gaming to cosmetics and e-commerce. Their performance has exceeded all expectations, and from all indications, they are the best stocks to buy going into the second half of the year.

In this article, we’ll cover these stocks in-depth, discussing how they’ve performed so well in the market and what makes them valuable portfolio additions for investors looking for the best stocks to buy.

Roblox (RBLX)

Roblox (NYSE: RBLX ) is a popular online game platform where users can create or play games made by others. It is one of the pioneers of the online video-gaming era and has received massive success.

The company has experienced turbulence this year, producing underwhelming numbers in the ongoing fiscal quarter. It fell significantly below its $870 – $900 million estimate and had to lower its full-year guidance. It also fell by 27%, causing concern among investors who worry about how it might fare in an economic recession.

Despite these adversities, Roblox is showing great perseverance in the market, and if its recent history is anything to go by, it would be unwise to count it out. According to its most recent quarterly report, its top line is up by 22%, a significant improvement from previous quarters.

Furthermore, the company is involved in a series of partnerships that could boost its value in the year’s second half. Nike, Walmart and Fenty are some companies that utilize Roblox’s in-game advertising experience to engage consumers and increase product sales. From all indications, there is a lot to look forward to from the company.

Ulta Beauty (ULTA)

Ulta Beauty (NASDAQ: ULTA ) is an American beauty and cosmetics giant with a chain of cosmetic stores scattered across the country. Its stores house some of the most popular cosmetic brands in the world, from Fenty to Chanel and Cerave.

Even though beauty and cosmetics retailers are experiencing a tough time due to the emergence of online beauty stores and the subsequent eradication of retailers and other middlemen, Ulta Beauty remains unphased. If anything, they may have benefitted from this industry shift. Much of this is due to its strong offline and online presence, the wide variety of brands it sells and its many stores (around 1,400 in the US).

Analysts believe combining all these factors contributes to the company’s impressive performance this year. Furthermore, its share price is an absolute bargain and an ideal option for investors looking for stocks to buy as the second half of the year begins. Its current share price is around $25 and $26.

Alibaba (BABA)

Alibaba (NYSE: BABA ) is a Chinese e-commerce giant specializing in everything from clothing and jewelry to electronics and accessories. Whatever you are looking for, the odds are that you will find it on Alibaba.

More impressively, the company is a parent to smaller e-commerce platforms, such as Taobao and Tmall, and has a strong hold on the Chinese market. You might wonder why Wall Street Analysts did not have high hopes for it this year. The last few years have been rough for the company, partly because of the heavy-handed pandemic lockdowns in China that lasted from 2020 through late 2022.

Despite this, Alibaba has exhibited tremendous resilience and is now rebounding in the market. According to its latest quarterly report, it is up 45% in foreign commerce revenue. It will likely continue to put up impressive numbers for the remainder of the year.

On the date of publication, Joel Lim 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 .

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