Investors looking to supercharge their portfolios would do well to widen the search aperture. Our hunt for the seven best stocks poised for magnificent earnings growth next year brings up names such as Artivion (AORT) and Coherent (COHR) — stocks far less hyped than Nvidia (NVDA) or Apple (APPL) or the other megacap leaders that continue to dominate the stock market.
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What Are The Magnificent Seven Stocks?
These Seven Are Best Stocks For Magnificent Earnings Growth
Micron Technology (MU): The provider of memory and storage solutions serves diverse markets: personal computers, mobile, automotive, industrial and data centers, among them. Further, the chipmaker stands to benefit from the growth of artificial intelligence (AI)-powered PCs and phones. Analysts expect Micron earnings to rebound strongly in fiscal 2024, ending in August, from a collapse in 2023. On a per-share basis, analysts anticipate a 694% earnings surge next year on 53% sales growth. Micron stock earns a Composite Rating of 96 and RS Rating of 96, both out of a best-possible 99. The AI stock struck an all-time high at 157.54 on June 18. It has rocketed 55% year to date. Micron stock plunged on June 27 as guidance disappointed after an easy quarterly beat. It has since found support at the 50-day moving average.
Seagate Technology (STX): The company makes solid state drives and enterprise data storage systems. Seagate says it is seeing its markets recover while cloud demand improves. In the current quarter, it expects a return to revenue growth after a two-year slump. Similar to Micron, analysts forecast Seagate earnings will rebound in fiscal 2024, ending in June, from a collapse in 2023. They project a 487% earnings per share jump next year on 37% revenue growth. Seagate stock boasts a Composite Rating of 92 and RS Rating of 93. This technology stock reached a two-year-plus high on June 18. It has jumped 20% year to date.
Artivion (AORT): The company makes medical devices and implantable human tissues used in cardiac and vascular surgical procedures. According to FactSet, analysts predict Artivion will swing to earnings of one cent in fiscal 2024, ending in December, from net losses per share in each of the prior four years. They project Artivion EPS will leap 400% to five cents the next year on 10% revenue growth. Artivion stock holds a Composite Rating of 93 and RS Rating of 94. This medical device best stock made a two-year-plus intraday high on July 2. It has bounded 43% higher year to date.
Uber Drives Onto Best Stocks List
Uber Technologies (UBER): The Uber app pioneered a way to provide ride-hailing and ride-sharing services using smartphones. It, too, has seen its markets recover as pandemic challenges have lifted. Meanwhile, Uber called 2023 an “inflection year,” one in which it delivered an annual profit, as both delivery and mobility bookings jumped double digits. Analysts forecast Uber earnings per share will dip by a penny in fiscal 2024, ending in December, and soar 145% in 2025. Uber stock shows a Composite Rating of 82 and RS Rating of 90. It is up 15% year to date.
Industrial, Chip Heavyweights Make The Cut
Coherent (COHR): The Pennsylvania-based company supplies sensors, components and materials used in things like industrial lasers, electric vehicles and artificial reality (AR) headsets. Analysts project that Coherent earnings per share will slump for a third straight year in fiscal 2024, ending in June. They expect a return to growth in fiscal 2025, with EPS leaping 85%, and up a further 41% the following year. Coherent stock holds a Composite Rating of 77 and RS Rating of 97. It made a two-year-plus high on June 18 and has soared 67% year to date.
GE Vernova (GEV): Spun out as an independent company on April 2, GE Vernova houses the gas power and wind energy assets of the old General Electric. This once-embattled energy business is also seeing end markets recover and has guided growth across business segments, helping it join the best stocks list. Analysts expect GE Vernova to swing to EPS of $3.58 per share in fiscal 2024, ending in December, FactSet shows. They see GE Vernova earnings jumping 60% a share next year. GE Vernova stock flourishes a Composite Rating of 83 and RS Rating of 88. It’s up 49% since its April debut.
AMD (AMD): The chipmaker and Nvidia rival is poised to benefit from demand for AI-powered PCs and mobile devices. Analysts forecast AMD earnings per share will rebound 32% in fiscal 2024, ending in December, from a 24% slump in 2023. They expect EPS to vault 58% next year on 28% sales growth. AMD stock flourishes a Composite Rating of 86 and RS Rating of 82. It’s up 11% year to date.
Universe of S&P 500, S&P 400 and S&P 600 Stocks
A little background on IBD’s process to select the best stocks for magnificent earnings growth:
We began our screening process with the S&P Composite 1500 index, which aggregates the S&P 500, S&P MidCap 400 and S&P SmallCap 600 companies. We chose this index, in part, because it avoids less-liquid, lower-priced and lower-quality names, while efficiently measuring the total U.S. stock market.
Then we limited the stocks on our best stock list to those showing FactSet consensus ratings of overweight or buy, which means analysts expect them to outperform industry peers. Next we further winnowed down the list, setting up a double hurdle: The stocks had to enjoy some of the strongest FactSet earnings growth estimates for the following fiscal year, while also earning high IBD ratings, in terms of their Composite Rating and RS Rating.
The resulting seven best stocks for outsize earnings growth are a quite different set from the Magnificent Seven stocks. At the same time, these stocks are worth watching as much as any of the Mag Seven stocks given their outperformance potential.
To find other ideas for the best stocks to buy or watch, check out IBD Stock Lists and other IBD content.
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