12 Best Performing Cheap Stocks in 2024

06. CompoSecure, Inc. (NASDAQ:CMPO)

Number of Hedge Fund Holders: 20

Year to date Share Price Gain: 170.19%

Forward Price to Earnings (P/E) Ratio: 11.12

CompoSecure, Inc. (NASDAQ:CMPO) is a leading provider of premium financial technology and payment solutions. It manufactures and designs metal, composite, and proprietary financial transaction cards in the United States and internationally. In the second quarter of 2024, CompoSecure, Inc. (NASDAQ:CMPO) exceeded market expectations by posting an EPS of $0.27, surpassing the consensus estimate of $0.26. This performance, coupled with record revenue and EBITDA growth, highlights the stock’s resilience and upside potential in the financial technology sector.

The company reported record net sales of $108.6 million, reflecting a 10% year-over-year increase, driven by continued growth in domestic markets and robust international demand. Additionally, CompoSecure, Inc. (NASDAQ:CMPO) adjusted EBITDA rose by 8% to $40 million during the same period. These results indicate the company’s ability to scale its business effectively while maintaining healthy margins. Despite inflationary pressures impacting gross margins, CompoSecure has managed to sustain an adjusted EBITDA margin of 36.8%, demonstrating strong operational efficiency.

Moreover, CompoSecure has strategically positioned itself for future growth through key partnerships and product innovations. The company expanded its collaboration with Fiserv to market and resell Arculus Authenticate, a secure authentication solution targeting financial institutions and fintechs. This partnership enhances CompoSecure, Inc. (NASDAQ:CMPO) product portfolio and is expected to contribute significantly to revenue growth in the coming quarters.

The company’s balance sheet remains solid, with cash and cash equivalents of $35.4 million and a total debt of $330.9 million as of June 30, 2024. The recent amendment and extension of its credit facility with favorable terms underscore lender confidence in CompoSecure, Inc. (NASDAQ:CMPO) financial stability and growth prospects. The company’s leverage ratio has improved to 2.2x, reflecting successful debt reduction and increased trailing 12-month adjusted EBITDA of $150.4 million.

CompoSecure, Inc. (NASDAQ:CMPO) leadership is further strengthened by the involvement of industry veteran Dave Cote, former CEO of Honeywell, who will take on the role of Executive Chairman. His extensive experience and proven track record in driving shareholder value position CompoSecure, Inc. (NASDAQ:CMPO) for continued success. With these fundamentals in place, CompoSecure stands out as a top-performing stock with significant upside potential in 2024.