Ahead of the Curve: 7 Stocks to Buy Before They Go Mainstream

Stocks to buy

If you’re on the hunt for overlooked stocks to buy, look no further. Finding possible winners before they become popular picks might be the key to achieving sizable profits in the ever-changing world of stock investments. These seven stocks are quietly creating waves in various industries.

From fintech and technology to manufacturing and retail, each of these businesses works in various industries and presents unique potential for investors to profit from emerging trends and changes in the market. These businesses, which range from the second one’s cutting-edge real-time engagement technology to the third one’s strong cash flow generation and the second one’s growing market reach in payment processing, are prime examples of the potential for exponential development before they become widely known.

Based on its distinct advantages and projected development, each firm makes a solid argument for investing, whether it’s the fourth’s dominance in the electric car market or the fifth’s position in the telecom sector. By seizing these chances early on, investors may benefit greatly as these firms develop and become more well-known.

Discover the unrealized potential of these seven stocks and the prospects that 10X returns will present.

Overlooked Stocks to Buy: PagSeguro (PAGS)

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In Q4 2023, PagSeguro’s (NYSE:PAGS) non-GAAP net income climbed by 26.6% year-over-year (YOY) to R$520 million, while net income (GAAP) increased by 19.7% YOY to R$488 million. This constant increase in net income demonstrates the company’s fundamental capacity to turn a profit and maintain its financial stability.

In addition, Total Finance Volume (TFV), which is made up of Total Payment Volume (TPV) and Total Banking Volume (TBV), was boosted by 34.3% YOY to reach R$280.6 billion. This expansion shows PagSeguro’s growing presence in banking and payment processing, which is consistent with its growing market share and broader market reach.

Finally, PagSeguro’s business offer extends beyond micro-merchants; in the fourth quarter of 2023, the company’s payments sector had a 20.6% YOY and R$113.7 billion TPV growth. Overall, the company’s integrated approach, which combines payments and financial services, as well as efforts like instantaneous settlement into PagBank accounts and the integration of MOIP, are credited with this success.

Agora (API)

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By the end of 2023, Agora’s (NASDAQ:API) active client base had grown significantly, with an 18% increase YOY in active consumers. The rise in active customers demonstrates Agora’s capacity to draw in and keep consumers. This indicates a substantial market need for their real-time interaction technology.

Certainly, the increase in active consumers demonstrates Agora’s effective entry into its target markets. Agora is a leader in its industry and has built a strong presence in sectors that need real-time engagement solutions, with close to 1,700 active clients.

Moreover, Agora’s webinar series explores how real-time interaction technology may revolutionize various sectors. Through these webinars, Agora may educate and captivate prospective customers, leading to increased market acceptance and a larger customer base.

In short, Agora’s cumulative product has a new beta version available. This shows the company’s focus on improving its solutions to match changing client demands. Hence, with these new capabilities — such as low-latency event alerts and real-time data synchronization, Agora is better positioned to take up more market share and boost revenue.

Overlooked Stocks to Buy: Scansource (SCSC)

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During the fiscal year 2024 second quarter, ScanSource (NASDAQ:SCSC) exhibited strong cash flow creation. Free cash flow was $151.9 million while operating cash flow was $156.8 million. Thanks to these data, ScanSource can pursue growth plans, engage in strategic opportunities, and provide value to shareholders, demonstrating strong liquidity and financial health.

Further, a vital part of ScanSource’s operations, Intelisys showed rapid expansion. Net billings rose to almost $2.64 billion annually, a 7.5% rise in net sales over the previous year. This expansion demonstrates how ScanSource’s emphasis on recurring income sources has successfully increased revenue stability and profitability.

On the other hand, inventory turnover rose to 5.1 times, indicating more effective and efficient inventory management. Days of sales outstanding decreased to 68 days, demonstrating efficient cash conversion cycles and receivables management. ScanSource continues to have a solid financial sheet; at the end of the second quarter, net debt leverage was around 0.8 times trailing 12-month adjusted EBITDA. In summary, existing credit facilities have plenty of liquidity, giving the business financial flexibility.

Blue Bird (BLBD)

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After the first quarter of fiscal 2024, Blue Bird’s (NASDAQ:BLBD) solid order backlog for school buses was 4,600 units, indicating strong market demand. Orders kept coming in, and soon after the quarter ended, the backlog reached 5,000 buses. 206 EVs were sold in the first quarter, a 124% increase over the same period last year, representing a notable boost in EV sales.

Moreover, the robust backlog shows a long-term market need for Blue Bird’s products and gives insight into potential future income sources and production levels. The increase in electric vehicle sales indicates consumers’ increasing interest in and use of alternative fuel cars, strengthening Blue Bird’s position as the industry leader. Thus, the constant order flow and backlog expansion demonstrate the business’s capacity to adapt to changing client demands and seize new market possibilities.

Finally, Blue Bird has a significant competitive advantage in the school bus sector and room to develop because of its substantial backlog and sustained market demand. Overall, the consistent flow of orders and increasing backlog offer a solid basis for stable production and revenue growth.

Overlooked Stocks to Buy: Tim (TIMB)

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Tim (NYSE:TIMB) achieves a record average mobile device revenue per user (ARPU). In the fourth quarter of 2023, overall ARPU increased to R$31.1, a notable 15.8% YOY rise. The average monthly revenue per mobile user (ARPU) is a crucial indicator. Tim has led the way in providing its clients with value-added services and premium packages. This spurred revenue development and profitability, as shown in its ability to get the highest ARPU.

Further, the business put a lot of effort into enhancing the client experience, which produced favorable results. This includes increased satisfaction scores, especially in resolution rankings. In the telecom sector, customer experience is a crucial differentiator affecting brand reputation, client loyalty, and retention. Tim focuses on providing exceptional customer service and swiftly addressing problems. Hence, this bolsters its competitive edge and fortifies its bonds with clients.

Indeed, with over 209 cities having 5G service and Brazil’s largest and strongest mobile network, Tim stands out in quality rankings. Hence, network quality and coverage are important variables affecting consumer loyalty in the telecommunications industry. 

Vipshop (VIPS)

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Rising order volumes indicate growing customer demand and transaction activity on Vipshop’s (NYSE:VIPS) platform. The company’s efficacy in gaining market share and satisfying consumer demands is evidenced by its capacity to generate increased order volumes. At 234.3 million, total orders rose 7.2% YOY. Orders reached 812.3 million, up 9.8% from the previous year. Vipshop may take advantage of this momentum as order volumes rise further to boost revenue growth and broaden its market reach.

In addition, maintaining revenue growth and gaining market share requires growing the active customer base. Vipshop’s brand loyalty and customer satisfaction show its ability to attract and keep consumers. There are now 48.5 million active subscribers, up 2.3% from the previous year, and 87.4 million active customers, up 3.9% in the past year.

In conclusion, Vipshop has the fundamental capability to engage and keep customers. This is demonstrated by its steady rise in the active client base. Thus, Vipshop may use this development in the active client base to boost future sales and income.

Sylvamo (SLVM)

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The company’s primary growth sources are the ability to generate cash flow and Sylvamo’s (NYSE:SLVM) capital allocation strategy. By paying off $76 million in debt, Sylvamo strengthened its financial condition and achieved a net debt ratio of 1.2 times. In addition, the business gave $127 million in cash back to shareholders. This indicates that it was committed to balancing capital returns and debt reduction.

Moreover, Sylvamo invested $210 million to bolster its low-cost assets, including $167 million, to acquire the Nymolla mill in Sweden. These expenditures are intended to increase capacity, improve operational efficiency, and promote long-term profitability.

To sum up, Sylvamo’s Brazilian forestlands give the company a substantial cost advantage over its international rivals regarding materials. To boost self-sufficiency and lower wood costs, the company invested $34 million in 2023 and intends to invest $35 million in 2024. Therefore, these expenditures aim to make Sylvamo a more competitive manufacturer.

On the date of publication, Yiannis Zourmpanos did not hold (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.

Yiannis Zourmpanos is the founder of Yiazou Capital Research, a stock-market research platform designed to elevate the due diligence process through in-depth business analysis.

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