Finding Hidden Gems in the Market
As investors, it’s easy to feel like we’ve missed the boat when it comes to growth stocks. With names like Nvidia and others nearing all-time highs, it’s natural to wonder if the bull market is finally coming to an end. However, a closer look reveals that many stocks are still undervalued and ripe for the picking.
Advanced Micro Devices: Closing the Gap
One such stock is Advanced Micro Devices (NASDAQ: AMD). Down 34% from its March peak, AMD has been quietly closing the competitive gap in the central processing unit (CPU), graphics processing unit (GPU), and embedded markets. While its revenue growth may not be as explosive as Nvidia’s, AMD’s data center segment, which includes its AI accelerators, now makes up 52% of company revenue and grew by 122%. With a price-to-sales (P/S) ratio of 10, compared to Nvidia’s 39, AMD’s stock price may not reflect its full potential.
Dutch Bros: Brewing Up Growth
Another hidden gem is Dutch Bros (NYSE: BROS), the Oregon-based beverage chain that’s rapidly expanding across the US. Despite being down over 45% since its IPO, Dutch Bros has grown to over 950 locations in 18 states, with revenue rising 28% in Q3 2024. With a P/S ratio of 3.2, barely above Starbucks’ 3.0, Dutch Bros offers a compelling opportunity for investors looking for rapid growth in its home market.
Innovative Industrial Properties: A Niche Opportunity
Innovative Industrial Properties (IIP) (NYSE: IIPR) may not be a household name, but this real estate investment trust (REIT) has carved out a lucrative niche in the cannabis industry. By renting facilities to medical cannabis growers and developing properties through its sale-leaseback program, IIP has created a steady stream of revenue. With a dividend yield of 5.8% and a price-to-FFO ratio of just 14, IIP offers a unique combination of growth and income potential.
Don’t Miss Out on These Opportunities
These three growth stocks, down 34% to 62% from their highs, offer a compelling opportunity for investors to get in on the ground floor. With their strong financials, competitive advantages, and undervalued stock prices, they have the potential to drive significant returns over time.
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