Uncovering Hidden Gems: 3 High-Growth Stocks to Buy After a Recent Pullback
Investors often overlook exceptional growth opportunities due to short-term market fluctuations. However, these temporary setbacks can provide a chance to buy into outstanding businesses at a discount. I’ve identified three high-growth companies that have recently experienced a pullback in their share prices, making them attractive investments for those thinking long-term.
Celsius: A Better-for-You Energy Drink Leader
Celsius, a pioneer in the healthy energy drink market, has seen its shares decline by 73% from their 52-week high. Despite this, the company’s underlying demand remains robust, with retail dollar and unit volume sales growing 7% in Q3. This impressive performance is driven by Celsius’ strong brand recognition and expanding global presence, with sales to Amazon and Costco increasing by 21% and 15%, respectively. With a price-to-sales ratio of 4.4, Celsius presents a compelling buying opportunity.
MercadoLibre: The Amazon of Latin America
MercadoLibre, a Latin American e-commerce and fintech giant, has experienced a 13% pullback in its share price. However, this decline is largely attributed to increased capital expenditures, which will drive long-term growth. The company’s focus on investing in its logistics network and credit portfolio will benefit its users and ultimately lead to higher profits. With a return on invested capital (ROIC) continuing to climb, MercadoLibre’s recent dip presents a buying opportunity at a reasonable valuation of 5 times sales.
Wingstop: A Premium Fast-Casual Chain
Wingstop, the largest chicken wings-focused fast-casual chain, has seen its shares drop by 26% from their 52-week high. Despite this, the company is firing on all cylinders, with same-store sales increasing by 21% and overall sales growth of 39%. Wingstop’s high and rising ROIC of 38% demonstrates its ability to grow profitably through its franchise model. With 90% of new locations opened by existing franchisees, the odds of success are high. This pullback provides an opportunity to buy into one of the best compounders on the market today at a discount.
These three high-growth businesses have delivered exceptional returns over the past decade, ranging from 965% to 3,450%. While their recent pullbacks may seem concerning, they present a unique opportunity for investors to buy into these outstanding companies at a discounted price. By focusing on their long-term growth potential and underlying fundamentals, investors can capitalize on these temporary setbacks and reap significant rewards in the years to come.
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