In this piece, we will take a look at twelve best performing cheap stocks in 2024.
As we step into the final quarter of 2024, the financial markets continue to navigate a complex terrain shaped by a mix of optimism and uncertainty. The latest jobs report for September came in stronger than expected, signaling resilience in the U.S. labor market and leading many investors to reassess their expectations regarding the Federal Reserve’s monetary policy. This report has led traders to largely eliminate the possibility of a more significant rate cut, now forecasting an 87% chance of a quarter-point reduction in the near future. Despite these concerns, analysts are generally optimistic about the broader market’s prospects as we head towards year-end, thanks to promising earnings growth and stabilizing economic indicators.
Goldman Sachs, one of the leading voices on Wall Street, recently revised its target for a major stock market index upward, projecting that the index will reach 6,000 by the end of 2024. This forecast implies a 4.3% upside from current levels and reflects the bank’s confidence in sustained earnings growth throughout the remainder of the year. The bank also sees a longer-term target of 6,300 for the index, which would represent a 9.5% gain over the next 12 months. Chief U.S. equity strategist David Kostin noted that despite near-term volatility, factors like a recovery in the semiconductor cycle and easing cost pressures are likely to boost margins across multiple sectors. Such bullish sentiment suggests that investors looking for value opportunities might find them in underperforming but fundamentally sound sectors.
One area that stands out in terms of valuations and future potential is the biopharmaceutical industry. Experts like Karen Firestone, a seasoned investor and regular contributor to CNBC, highlight that despite the sector’s recent struggles, it presents an attractive entry point for long-term investors. Large pharmaceutical companies are trading at lower price-to-earnings ratios compared to the broader market, offering robust profit margins and potential for AI-driven breakthroughs in drug development. While some big names have rallied on the back of their blockbuster obesity drugs, the broader biopharma sector remains relatively undervalued.
This favorable setup is not confined to biopharma alone. The technology and consumer discretionary sectors, which were hit hard earlier this year, are also starting to show signs of life. According to FactSet, analysts expect the major stock index to post its fifth consecutive quarter of earnings growth in the third quarter, projecting a 4.2% expansion year-over-year. This suggests that sectors with solid growth fundamentals could outperform as economic conditions stabilize. At the same time, energy stocks, particularly those within the communication services sector, have received a higher percentage of “buy” ratings, reflecting optimism around their capacity to deliver gains in the coming months.
While there’s a lot of chatter around high-growth sectors, value investors are eyeing cheap stocks that have managed to deliver impressive returns. The biopharmaceutical sector is a case in point, where low valuations, high margins, and the potential integration of AI into drug discovery make it a compelling area for investment. Analysts suggest that companies with robust balance sheets and pricing power are best positioned to withstand potential economic headwinds and capitalize on emerging growth opportunities.
In addition, some strategists believe that broader market gains could extend beyond 2024, particularly if the Federal Reserve manages to engineer a “soft landing” by controlling inflation without triggering a recession. With the presidential election looming in 2025, historical data shows that major stock indices tend to perform well during election years, further supporting a cautiously optimistic outlook for equities.
Given these dynamics, it’s evident that while the market landscape is marked by volatility and economic uncertainties, there are still promising opportunities to be found. In the following sections, we delve into 12 of the best-performing cheap stocks of 2024, which have outpaced broader market indices and offer attractive entry points for investors looking to navigate these uncertain times with a focus on long-term gains.
Richest Cities in Every State in the US
Our Methodology
For this article, we used Finviz stock screener to look for companies having forward Price to Earnings (P/E) ratio of less than 15. We then selected the top 12 stocks with the best year-to-date performance. Additionally, we reviewed data from approximately 912 elite hedge funds tracked by Insider Monkey during the second quarter of 2024 to determine hedge fund ownership for each company. The stocks are ranked in ascending order of their year-to-date performance.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
12. Valhi, Inc. (NYSE:VHI)
Number of Hedge Fund Holders: 1
Year to date Share Price Gain: 128.31%
Forward Price to Earnings (P/E) Ratio: 10.7
Valhi, Inc. (NYSE:VHI) is a diversified company engaged in the chemicals, component products, and real estate management and development sectors across North America, Europe, the Asia Pacific, and globally. The company’s broad operational reach and unique business segments make it a strong candidate for inclusion in our list of 12 best performing cheap stocks in 2024. With robust earnings performance and improved operational efficiencies, Valhi, Inc. (NYSE:VHI) has demonstrated its potential to deliver significant shareholder value despite macroeconomic challenges.
In the second quarter of 2024, Valhi, Inc. (NYSE:VHI) reported a net income of $19.9 million, or $0.70 per share, compared to a net loss of $3.2 million in the same period of 2023. For the first six months of 2024, the company posted a net income of $27.7 million, or $0.97 per share, against a net loss of $9.0 million in the comparable period of 2023. This turnaround was primarily driven by the Chemicals segment, which recorded a 13% year-over-year increase in net sales for the first half of 2024, reaching $979.3 million. Improved sales volumes and production efficiencies led to a notable operating income of $63.3 million for this segment, compared to an operating loss of $17.7 million in the first half of 2023.
Valhi, Inc. (NYSE:VHI) strategic focus on boosting production volumes of titanium dioxide (TiO2), a key product of its Chemicals segment, was instrumental in these improved financials. The company increased its TiO2 production to 93% of capacity utilization in the first six months of 2024, up from 70% in the same period of 2023. The cost reductions in energy and raw materials also supported margin expansion, making Valhi, Inc. (NYSE:VHI) Chemicals segment a significant contributor to its overall profitability.
While the Component Products segment experienced a slight decline in sales due to lower marine component revenues, its operating income grew 16% in the second quarter of 2024, thanks to higher sales of security products. Meanwhile, the Real Estate Management and Development segment saw a temporary slowdown due to permitting delays, but remains poised for recovery.
Overall, Valhi, Inc. (NYSE:VHI) diversified business model, improved profitability, and strong financial metrics make it an attractive choice among affordable stocks for long-term investment in 2024.
11. Flexsteel Industries, Inc. (NASDAQ:FLXS)
Number of Hedge Fund Holders: 6
Year to date Share Price Gain: 131.67%
Forward Price to Earnings (P/E) Ratio: 12.23
Flexsteel Industries, Inc. (NASDAQ:FLXS) is a leading furniture manufacturer known for its high-quality products and innovative designs. The company has delivered a solid financial performance in its fourth quarter and fiscal year 2024, making it a prime candidate for inclusion in our list of the 12 best performing cheap stocks in 2024. Despite ongoing challenges in the furniture industry, including weak consumer demand, Flexsteel has managed to achieve robust growth and profitability, demonstrating its strong fundamentals and ability to outperform competitors.
In the fourth quarter of fiscal 2024, Flexsteel Industries, Inc. (NASDAQ:FLXS) reported a net sales increase of 4.7% year-over-year to $110.8 million, driven primarily by an uptick in sales orders and a solid backlog. The company’s sales order backlog rose by 20% to $59.5 million, highlighting strong demand for its products. Additionally, Flexsteel Industries, Inc. (NASDAQ:FLXS) adjusted operating income reached $6.2 million, representing a 160 basis point increase compared to the prior year quarter. This growth was primarily due to a combination of strong operational execution, disciplined product portfolio management, and effective cost savings measures.
On an annual basis, Flexsteel Industries, Inc. (NASDAQ:FLXS) reported a 4.8% increase in net sales, showcasing its resilience in a market where many peers experienced double-digit declines. This robust performance is a testament to Flexsteel Industries, Inc. (NASDAQ:FLXS) strategic investments in innovation, new product development, and enhanced customer experience. The company’s focus on differentiation through value-added features and expanding its market presence has enabled it to gain market share even in a challenging environment.
From a profitability perspective, Flexsteel Industries, Inc. (NASDAQ:FLXS) improved its adjusted operating margin to 5.6% in the fourth quarter, up from 4% in the prior year. For the full fiscal year, adjusted operating income surged 126% year-over-year to $18.3 million. Flexsteel Industries, Inc. (NASDAQ:FLXS) strong cash generation capabilities are evident from its $32 million operating cash flow and a significant reduction in inventory by over $25 million during the year. This, combined with efficient working capital management, allowed the company to reduce its debt by 66%.
As Flexsteel Industries, Inc. (NASDAQ:FLXS) heads into fiscal 2025, it remains well-positioned for sustainable growth. With strategic initiatives to expand its product lines, target new markets, and invest in innovation, the company is poised to deliver continued profitability and shareholder value, making it a compelling pick among the best performing cheap stocks this year.
10. Banco BBVA Argentina S.A. (NYSE:BBAR)
Number of Hedge Fund Holders: 9
Year to date Share Price Gain: 142.78%
Forward Price to Earnings (P/E) Ratio: 10.48
Banco BBVA Argentina S.A. (NYSE:BBAR) is a leading financial institution providing a diverse range of banking products and services to individuals and companies across Argentina. As a significant player in the Argentinian financial sector, the company offers comprehensive solutions, including checking and savings accounts, credit cards, mortgages, and various financing options.
Banco BBVA Argentina S.A. (NYSE:BBAR) second quarter of 2024 financial results demonstrate strong profitability despite challenging macroeconomic conditions. The bank posted net income of ARS112.9 billion, reflecting an impressive 178.8% quarter-over-quarter growth. This strong bottom-line performance translated into a return on equity (ROE) of 19.5% and a return on assets (ROA) of 4.7%, highlighting the company’s efficiency in generating returns for shareholders.
The bank’s financial stability is further underscored by its solid capital position, with a capital ratio of 25.3% and capital excess over regulatory requirements of 210.3%. While the capital ratio fell slightly from the previous quarter due to a 16.4% increase in risk-weighted assets, Banco BBVA Argentina S.A. (NYSE:BBAR) overall solvency remains robust.
One of the key highlights from the earnings report is the company’s continued digital expansion. As of June 2024, 81% of new customer acquisitions were made through digital channels, up from 76% a year ago. This strategic shift has not only enhanced customer engagement but also boosted the bank’s competitive position within the industry. Digital sales represented 74% of the bank’s total sales, illustrating the effectiveness of its digital strategy.
On the lending front, private sector loans totaled ARS3.9 trillion, marking a 23.1% growth in real terms during the quarter. Notably, the retail portfolio grew by 19%, while the commercial portfolio expanded by 26.6%. The bank’s asset quality ratio remains healthy at 1.18%, reflecting prudent risk management practices.
Despite the backdrop of high inflation in Argentina, Banco BBVA Argentina S.A. (NYSE:BBAR) ability to achieve strong financial results and expand its customer base through digital means positions it as one of the best-performing and most resilient cheap stocks in 2024.
09. QuantaSing Group Limited (NASDAQ:QSG)
Number of Hedge Fund Holders: 2
Year to date Share Price Gain: 155.77%
Forward Price to Earnings (P/E) Ratio: 8.17
QuantaSing Group Limited (NASDAQ:QSG), headquartered in Beijing, was founded in 2019 and operates through two primary segments: Learning Service and Consumer Business. QuantaSing offers a variety of online courses aimed at enhancing financial literacy, skills upgrading, and leisure activities for adult learners under several brands such as QiNiu, JiangZhen, and QianChi. The company’s adaptability and evolving business model have positioned it for continued success, making it a strong candidate for investors looking at affordable yet promising stocks in 2024.
In the fourth quarter of fiscal year 2024, QuantaSing Group Limited (NASDAQ:QSG) posted solid financial results, demonstrating its potential for long-term growth. The company achieved total revenues of RMB 1,000.1 million, representing a year-over-year increase of 20.7%, primarily driven by its skill-enhancing courses. More importantly, the adjusted net income reached a historical high of RMB 193.6 million, a substantial improvement from RMB 90.4 million in the same period last year. This robust financial performance underscores the effectiveness of QuantaSing Group Limited (NASDAQ:QSG) strategic focus on adult learning and its transition to serving the growing needs of China’s silver economy.
QuantaSing Group Limited (NASDAQ:QSG) pivot towards the silver economy, which encompasses services tailored to the elderly population, is a significant driver of its future growth. The silver economy in China, valued at RMB 14.4 trillion in 2023, presents a vast market opportunity, which QuantaSing is well-positioned to capitalize on. The company’s offerings, including health and wellness courses, traditional Chinese medicine, and cultural activities, cater to the unique needs of the aging population. Additionally, its innovative offline initiatives, such as study tours and wellness programs, have helped increase user engagement and retention, contributing to the company’s expanding user base of 137.6 million registered users.
Furthermore, QuantaSing Group Limited (NASDAQ:QSG) strong liquidity position, with cash and cash equivalents totaling RMB 1,026.3 million as of June 30, 2024, provides it with the financial flexibility to invest in its strategic initiatives. The company’s ability to grow revenue and maintain a healthy balance sheet makes it a compelling investment opportunity among cheap stocks in 2024.
08. Banco Macro S.A. (NYSE:BMA)
Number of Hedge Fund Holders: 13
Year to date Share Price Gain: 165.30%
Forward Price to Earnings (P/E) Ratio: 6.32
Banco Macro S.A. (NYSE:BMA) is a leading bank in Argentina, offering a wide range of financial services to both retail and corporate clients. The company provides an array of banking products, including savings and checking accounts, time deposits, loans, insurance, credit cards, and various digital banking services. With its comprehensive offerings, Banco Macro S.A. (NYSE:BMA) serves as a key player in the Argentine banking sector and is well-positioned to capture further market share.
Banco Macro S.A. (NYSE:BMA) has demonstrated resilience in navigating Argentina’s complex economic landscape, adapting to hyperinflationary conditions by adhering to Hyperinflation Accounting (IFRS IAS 29). Despite economic challenges, the bank reported a net income of ARS93.1 billion for the first half of 2024, reflecting its ability to maintain profitability amidst volatile conditions. The bank’s net operating income before general, administrative, and personnel expenses reached ARS1.59 trillion, an impressive 41% increase compared to the same period in 2023.
One of the key strengths of Banco Macro S.A. (NYSE:BMA) lies in its operational efficiency. In the second quarter of 2024, the bank’s efficiency ratio stood at 22.2%, which, although higher than previous quarters, still indicates strong cost management capabilities. The company’s robust capital position, with a capital adequacy ratio of 35.7% and Tier 1 ratio of 34%, showcases its financial stability and ability to withstand economic headwinds.
Furthermore, Banco Macro S.A. (NYSE:BMA) loan portfolio showed healthy growth in the second quarter, with total financing reaching ARS3.47 trillion, representing a 17% increase quarter-on-quarter. The bank’s asset quality remains solid, with a non-performing loan ratio of just 1.23% and a coverage ratio of 181.4%, indicating that the bank has adequately provisioned for potential credit risks.
With its strong fundamentals, growth in private sector loans, and a substantial market share of 9.1% in private sector loans, Banco Macro S.A. (NYSE:BMA) is poised to capitalize on opportunities within the Argentine financial market, making it an attractive investment option among the best-performing cheap stocks in 2024.
07. Sensus Healthcare, Inc. (NASDAQ:SRTS)
Number of Hedge Fund Holders: 7
Year to date Share Price Gain: 166.53%
Forward Price to Earnings (P/E) Ratio: 11.04
Sensus Healthcare, Inc. (NASDAQ:SRTS) is a medical device company that designs and sells advanced radiation therapy devices to healthcare providers across the globe. The company’s core technology, superficial radiation therapy (SRT), offers a non-invasive alternative to surgery for treating non-melanoma skin cancers, such as basal cell and squamous cell carcinomas, as well as other skin conditions like keloids. The company has a diversified product lineup, including the SRT-100 and SRT-100 Vision systems, both of which provide an effective, patient-friendly option for dermatology practices and hospital settings. Given its innovative offerings, strong revenue growth, and expanding market presence, Sensus Healthcare, Inc. (NASDAQ:SRTS) is a solid inclusion in our list of the 12 best performing cheap stocks in 2024.
In its Q2 2024 earnings call, Sensus Healthcare, Inc. (NASDAQ:SRTS) reported impressive financial performance, showcasing a substantial year-over-year revenue growth of 104% to $9.2 million, compared to $4.5 million in Q2 2023. This growth was driven by a notable increase in the number of SRT units shipped, from 13 units in Q2 2023 to 23 units in Q2 2024, including three systems delivered to international markets. The rise in shipments of the SRT-100 Vision systems, which feature image-guided technology, highlights the company’s ability to innovate and cater to the evolving needs of healthcare providers. Gross profit for the second quarter stood at $5.4 million, representing a margin of 58.7%, up from 57.9% in the previous year.
The introduction of the Fair Deal Agreement, a recurring revenue model launched in March, has been well-received, with 15 contracts already signed and expectations for the total to reach 50 by year-end. This initiative is expected to significantly contribute to recurring revenues starting in 2025. Additionally, Sensus Healthcare, Inc. (NASDAQ:SRTS) recent entry into new international markets, including its first-ever sale of the image-guided SRT-100 Vision system in Asia, signals strong potential for further expansion and revenue diversification.
The company’s robust balance sheet, with $19 million in cash and no outstanding debt, positions it well for continued growth. With increasing demand for non-invasive treatments and a growing customer base, Sensus Healthcare, Inc. (NASDAQ:SRTS) outlook remains positive, making it a compelling option for investors looking for high-growth potential at a reasonable valuation.
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.
05. Grupo Financiero Galicia S.A. (NASDAQ:GGAL)
Number of Hedge Fund Holders: 15
Year to date Share Price Gain: 171.50%
Forward Price to Earnings (P/E) Ratio: 6.03
Grupo Financiero Galicia S.A. (NASDAQ:GGAL) is a financial services holding company that operates across multiple segments, including banking, consumer finance, and insurance. It provides a diverse array of financial products such as personal loans, credit cards, mortgage loans, and online banking services to individuals and businesses throughout Argentina. Given its robust performance in recent quarters and strong presence in the Argentine financial sector, Grupo Financiero Galicia S.A. (NASDAQ:GGAL) stands out as a key candidate for inclusion in our list of 12 best performing cheap stocks in 2024.
During the second quarter of 2024, Grupo Financiero Galicia S.A. (NASDAQ:GGAL) reported impressive financial results, with net income reaching Ps.295,577 million, a significant 54% increase from the same quarter in 2023. This growth translated into an annualized Return on Equity (ROE) of 36.9% and a Return on Assets (ROA) of 8.95%, highlighting the company’s efficiency and strong profitability in generating returns for its shareholders. The firm also saw an uptick in operating results, which increased by 34% year-over-year, driven by a higher net operating income.
Despite macroeconomic challenges such as inflation, which led to a Ps.375,329 million loss in its net monetary position, Grupo Financiero Galicia S.A. (NASDAQ:GGAL) managed to post a higher net operating income of Ps.1,258,296 million, reflecting a 24% increase from the previous year. This surge was primarily fueled by a rise in net interest income by Ps.318,263 million, or 46%, and a notable increase in net results from financial instruments by Ps.56,235 million, or 72%.
Although the company faced a decrease in average interest-earning assets due to lower volumes of government securities and peso-denominated loans, it managed to offset this decline through a stronger performance in other interest-earning assets, which grew by 92%. Additionally, interest expenses decreased by a substantial 61%, reflecting better management of liabilities and a reduction in time deposits.
The company’s market share of total loans to the private sector grew to 11.89%, showcasing its dominance in the Argentine market. With a well-diversified portfolio, robust profitability metrics, and resilience against macroeconomic headwinds, Grupo Financiero Galicia S.A. (NASDAQ:GGAL) is well-positioned to deliver strong performance, making it an attractive pick among cheap stocks in 2024.
04. Alliance Entertainment Holding Corporation (NASDAQ:AENT)
Number of Hedge Fund Holders: 2
Year to date Share Price Gain: 179.03%
Forward Price to Earnings (P/E) Ratio: 7.40
Alliance Entertainment Holding Corporation (NASDAQ:AENT) operates as a global wholesaler, retailer, distributor, and e-commerce provider for the entertainment industry. Its diversified product offerings include vinyl records, video games, DVDs, Blu-rays, toys, and consumer electronics. As a leading direct-to-consumer and business-to-business supplier, Alliance Entertainment Holding Corporation (NASDAQ:AENT) has built strong relationships with major retailers like Walmart, Amazon, and Target.
The company reported a robust financial performance in its fiscal year ending June 30, 2024, achieving annual revenue of over $1.1 billion, with more than $250 million generated from exclusive distribution deals. This revenue was largely driven by its strategic partnerships with prominent brands such as Walt Disney, Sony Pictures, Microsoft, and Universal Music. Additionally, the company has successfully expanded its market reach, serving over 35,000 storefronts across 72 countries. This extensive global footprint, combined with exclusive licensing agreements, creates a competitive advantage that safeguards its leadership position in the entertainment distribution market.
Alliance Entertainment Holding Corporation (NASDAQ:AENT) efficient cost management initiatives have also contributed to its success. The implementation of the AutoStore automated storage and retrieval system in its Kentucky warehouse has significantly lowered fulfillment costs by streamlining operations. The company reduced its labor costs and increased storage capacity, resulting in an annual cost reduction of approximately $0.9 million. Additionally, the introduction of the Sure Sort X system from OPEX in fiscal Q3 2024 led to immediate savings of $0.5 million and is projected to generate an additional $400,000 in annual savings moving forward.
The company’s adjusted EBITDA for fiscal 2024 reached a strong level, reflecting its ability to optimize operations and generate consistent profitability. With a proven history of strategic acquisitions, Alliance Entertainment Holding Corporation (NASDAQ:AENT) has further solidified its market position by expanding its product offerings and entering new segments like retro gaming and collectibles. These factors position the company as a strong performer among cheap stocks in 2024, providing value and growth potential for long-term investors.
03. Lufax Holding Ltd (NYSE:LU)
Number of Hedge Fund Holders: 11
Year to date Share Price Gain: 193.35%
Forward Price to Earnings (P/E) Ratio: 9.77
Lufax Holding Ltd (NYSE:LU) is a financial services provider in China, primarily focused on empowering small and micro businesses. Founded in 2005 and headquartered in Shanghai, Lufax offers a variety of loan products, including both unsecured and secured loans, along with consumer finance options. The company also specializes in wealth management services, providing asset management, mutual funds, private investment funds, and trust products.
In the second quarter of 2024, Lufax Holding Ltd (NYSE:LU) demonstrated resilience despite a challenging macroeconomic environment. The total loan volume decreased to 45.2 billion RMB, a year-over-year decline of 15.5%. This was primarily due to a significant 35% drop in Puhui loans, which still accounted for 51% of total loan sales. However, Lufax Holding Ltd (NYSE:LU) consumer finance segment thrived, showcasing a robust 23.6% year-over-year increase in new loan sales. This shift indicates the company’s commitment to prioritizing quality over quantity while adapting to market demands.
The company has been implementing stricter credit standards, resulting in a notable enhancement in asset quality. The C-M3 flow rate improved to 0.9%, and the non-performing loan (NPL) ratio decreased to 1.4% from 1.6%. These developments reflect Lufax’s successful transition to a more sustainable lending model, emphasizing the 100% guarantee model for Puhui loans. This strategic pivot is expected to further increase the company’s take rate, which rose to 9.3% in the latest quarter.
From a financial standpoint, Lufax Holding Ltd (NYSE:LU) reported a total income of 6 billion RMB for the quarter, down from 9.3 billion RMB in the previous year, primarily due to a 44.8% decrease in outstanding loan balances. However, the company’s operating expenses fell by 20.3% to 6.3 billion RMB. This demonstrates Lufax Holding Ltd (NYSE:LU) ability to maintain operational efficiency even in a declining revenue environment. Overall, with improving asset quality, a focus on consumer finance growth, and a strategic alliance with Ping An Group, Lufax Holding Ltd (NYSE:LU) stands out as a compelling investment opportunity in the financial services sector.
02. Emergent BioSolutions Inc. (NYSE:EBS)
Number of Hedge Fund Holders: 19
Year to date Share Price Gain: 289.58%
Forward Price to Earnings (P/E) Ratio: 6.19
Emergent BioSolutions Inc. (NYSE:EBS) is a prominent life sciences company focused on providing solutions to public health threats, including opioid overdoses, infectious diseases, and biological threats. With a diverse portfolio of products such as NARCAN Nasal Spray for opioid overdose and various vaccines for serious diseases, Emergent BioSolutions Inc. (NYSE:EBS) is positioned to address critical healthcare needs.
In the second quarter of 2024, Emergent BioSolutions Inc. (NYSE:EBS) reported a significant upward revision of its revenue and adjusted EBITDA guidance for the year, demonstrating robust operational performance. The company has successfully reduced its debt burden, contributing to a healthier balance sheet. This achievement is attributed to strategic divestitures, including a $75 million divestment of RSDL to SERB Pharmaceuticals and a $30 million sale of its Camden facility to Bora Pharmaceuticals, which also resulted in substantial operational cost savings. These initiatives are expected to yield approximately $110 million in expense reductions, showcasing the company’s commitment to financial prudence.
Emergent BioSolutions Inc. (NYSE:EBS) Q2 performance was noteworthy, exceeding revenue expectations without relying on significant ACAM2000 shipments, highlighting its operational resilience. Furthermore, the company received a $50 million settlement from Janssen, which bolstered its cash reserves and improved liquidity. With a strong focus on product expansion, particularly for NARCAN, Emergent aims to increase accessibility in response to the ongoing opioid crisis, a sector expected to drive future growth.
The company’s contract modifications with the U.S. government, totaling over $250 million, signify its status as a trusted biodefense partner. This includes notable contracts for supplying critical medical countermeasures like ACAM2000 and VIGIV, further establishing Emergent’s potential for sustained revenue growth.
In summary, Emergent BioSolutions Inc. (NYSE:EBS) not only showcases a solid foundation for financial recovery but also possesses a promising outlook driven by its strategic initiatives and robust product portfolio. The combination of operational efficiency, significant revenue guidance adjustments, and a commitment to addressing urgent public health threats positions Emergent BioSolutions Inc. (NYSE:EBS) as a strong candidate among cheap stocks poised for exceptional performance in 2024.
01. Kingstone Companies, Inc. (NASDAQ:KINS)
Number of Hedge Fund Holders: 2
Year to date Share Price Gain: 322.07%
Forward Price to Earnings (P/E) Ratio: 6.44
Kingstone Companies, Inc. (NASDAQ:KINS) is a well-established player in the property and casualty insurance sector, providing a range of insurance products tailored for individual clients across the United States. With a rich history dating back to 1886, the company has undergone strategic transformations and is now positioned to capitalize on the evolving insurance landscape.
The second quarter of 2024 marks a significant milestone for Kingstone Companies, Inc. (NASDAQ:KINS), as it achieved its third consecutive quarter of profitability, reporting a net income of $4.5 million, or $0.41 per basic share. This is a remarkable turnaround, especially considering the $11.5 million increase in net income compared to the same period last year. The company’s commitment to enhancing its core business is evident, with direct premiums rising 12%, bolstered by a remarkable 21% growth in core direct written premiums. The average premium across policies surged by over 18%, reflecting Kingstone’s strategic pricing actions and effective risk management.
Kingstone Companies, Inc. (NASDAQ:KINS) combined ratio improved substantially to 78.2%, a remarkable 21-point decrease year-over-year, indicating efficient underwriting practices. This positive trend is supported by a significant improvement in both the current accident year loss ratio and a decrease in catastrophe losses, underscoring the company’s strong risk selection and operational effectiveness.
Moreover, Kingstone Companies, Inc. (NASDAQ:KINS) focus on a selective growth strategy allows it to maximize opportunities in a constrained market, particularly after several competitors have exited key areas, including New York. The company’s proactive approach to raising premiums and updating replacement costs on policies has positioned it favorably to capture market share from these exiting players.
Looking ahead, Kingstone Companies, Inc. (NASDAQ:KINS) anticipates direct premium growth of 25% to 35% for the full year, with earnings per share expected to range between $1.00 and $1.30. The projected return on equity stands impressively between 26% and 34%. With a scalable platform and strategic initiatives in place, Kingstone Companies, Inc. is poised not just for survival but for substantial growth, making it an attractive investment for 2024 and beyond.
While we acknowledge the potential of KINS to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than KINS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
