In this article, we will take a detailed look at the 16 Most Profitable New Stocks Today. For a quick overview of such stocks, read our article 5 Most Profitable New Stocks Today.
IPO activity showed some signs of a rebound in 2023 but public markets are far from the enthusiasm witnessed in 2021. Some notable IPOs in 2023 included those of ARM, Instacart, Klaviyo, among others. A detailed report by Renaissance Capital said that there are about 160 companies waiting to go public soon, looking to raise over $8 billion in total. The report said there are about 15 IPOs planning to raise at least $100 million in 2024, with most of the notable IPOs expected to take place in the second and third quarter of 2024.
“Our Private Company Watchlist (PCW) contains more than 200 IPO candidates that we believe are poised to list within the next two years. In 2023, 17 of the year’s largest IPOs came from our PCW, led by chip giant Arm. Large VC-backed startups are staying private longer than ever before, but improved market conditions in 2024 should open the door for companies that have made strides towards profitability,” the report said.
The report listed some of the most-anticipated IPOs of 2024. Some top names in the list include Reddit, Rubrik, Panera, Kim Kardashian’s shapewear brand Skims, Chinese fashion retailer SHEIN, Stripe, canned water company Liquid Death, General Atlantic, among many others.
Ernst & Young said in its market outlook report that easing inflation and possible rate cuts could cause a rebound in the IPO markets but companies are expected to remain in the wait and see mode as they await more favorable market conditions. EY’s report said despite a strong rally in the stock market, IPO activity was muted in 2023. This is because most of the market gains were concentrated in the mega-cap technology space and the broader market did not see widespread gains as inflation and recession-related worries continue to haunt investors. Companies are also fearful of post-IPO losses as 2022 and 2023 has shown that most of the IPOs failed to sustain the optimism of their first few days. On the other hand, high-growth developing markets saw a stronger IPO activity in 2023, with Indonesia, Malaysia and Turkey showing a rise in deal volume and proceeds by benchmarking against 5-year average IPO activity.
“The tumbling share prices of September listings have prompted some IPO candidates to consider delaying their plans. Companies are further discouraged by uncertainty over interest rate patterns and geopolitical events. Even those choosing to go public are proceeding with care, scrutinizing market signals and potentially postponing their offering. Large-cap IPOs consistently trailed smaller deals across post-IPO windows from one day to one month as well as trailing current returns. In a bid to bolster confidence, some large-caps are opting for ‘cornerstone strategies’ — having anchor investors buy big blocks of shares — although this approach can also reduce liquidity. Still, some 2022 large-cap IPOs dropped on their debut while small and micro listings enjoyed notable day-one IPO pops. As smaller businesses stay open to IPO plans, a few big-ticket success examples need to surface, to restore investor confidence before large volume of IPOs return. Compared with the Americas and Asia-Pacific regions, EMEIA saw the highest IPO returns with its 2023 IPO cohort: about 70% of EMEIA IPOs exceeded their offer prices. 100% of newly public companies in Turkey enjoyed positive returns, with UAE and India not far behind at 80% and 75%, respectively. These results have made them some of EMEIA’s best performing IPO markets,” EY added.
source: pixabay
Methodology
For this article we first used a stock screener to identify companies that went public in the last two years and are profitable. We then selected 16 of these companies with the highest net income. We have also mentioned hedge fund sentiment for these stocks where available. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator
Most Profitable New Stocks Today
16. TXO Partners LP (NYSE:TXO)
Net Income (TTM): $67.46M
Texas-based energy company TXO Partners LP (NYSE:TXO) in November upped its dividend by 8.3%.
The stock went public in January 2023.
15. Embecta Corp (NASDAQ:EMBC)
Net Income (TTM): $70.40M
Medical device company Embecta Corp (NASDAQ:EMBC) ranks 15th in our list of the most profitable new stocks to buy.
Over the past 12 months Embecta Corp’s (NASDAQ:EMBC) net income came in at about $70 million.
14. GigaCloud Technology Inc (NASDAQ:GCT)
Net Income (TTM): $71M
China-based GigaCloud Technology Inc (NASDAQ:GCT) made its debut on the NASDAQ in August 2022. The online platform company GigaCloud Technology Inc (NASDAQ:GCT) connects manufacturers of bulky consumer items with buyers around the world.
As of the end of the third quarter of 2023, five hedge funds tracked by Insider Monkey had stakes in GigaCloud Technology Inc (NASDAQ:GCT).
13. NEXTracker Inc (NASDAQ:NXT)
Net Income (TTM): $103.4M
Energy solutions company NEXTracker Inc (NASDAQ:NXT) ranks 13th in our list of the most profitable new stocks to buy now. NEXTracker Inc (NASDAQ:NXT) went public in February 2023.
Wells Fargo analyst Michael Blum earlier this month upgraded NEXTracker Inc (NASDAQ:NXT) to Overweight.
A total of 26 hedge funds tracked by Insider Monkey had stakes in NEXTracker Inc (NASDAQ:NXT) as of the end of the September quarter.
12. MasterBrand Inc (NYSE:MBC)
Net Income (TTM): $161.30M
MasterBrand Inc (NYSE:MBC) makes cabinetry products for kitchens and bathrooms. In November, MasterBrand Inc (NYSE:MBC) posted third quarter results. Adjusted EPS in the quarter came in at $0.46, beating estimates by $0.12.
As of the end of the third quarter of 2023, 26 hedge funds out of the 910 funds tracked by Insider Monkey had stakes in MasterBrand Inc (NYSE:MBC).
11. Birkenstock Holding PLC (NYSE:BIRK)
Net Income (TTM): $168.81M
Footwear products company Birkenstock Holding PLC (NYSE:BIRK) ranks 11th in our list of the most profitable new stocks to buy today.
In November 2023, Jefferies started covering the stock with a Buy rating.
“We believe the company’s evolution into a universally known brand with a loyal customer base speaks to the company’s ability to continue to adapt and develop new silhouettes to maintain existing customers while also attracting new ones,” Jefferies analyst Randal Konik said.
10. ESAB Corp (NYSE:ESAB)
Net Income (TTM): $215.75M
American-Swedish industrial company ESAB Corp (NYSE:ESAB) ranks 10th in our list of the most profitable stocks to own today.
Insider Monkey’s database of 910 hedge funds shows that 20 hedge funds had stakes in ESAB Corp (NYSE:ESAB).
In November, ESAB Corp (NYSE:ESAB) posted Q3 results. GAAP EPS in the period came in at $0.94, missing estimates by $0.01. Revenue in the quarter jumped 9.8% year over year to $680.99 million, beating estimates by $52.75 million.
Diamond Hill Mid Cap Strategy made the following comment about ESAB Corporation (NYSE:ESAB) in its Q3 2023 investor letter:
“Among our top contributors in Q3 were American International Group (AIG) and ESAB Corporation (NYSE:ESAB). Welding and cutting equipment and consumables provider ESAB’s continuous improvement-focused EBX business system is driving improved efficiencies, and the company is diversifying into the higher-margin gas control business — developments which are driving better margins. Despite ESAB’s exposure to potential near-term economic weakness, we maintain our conviction in the long-term outlook given the company’s strong position in emerging markets and its focus on execution — factors we believe are not reflected in the current share price.”
9. Brookfield Business Corp (NYSE:BBUC)
Net Income (TTM): $259.00M
Brookfield Business Corp (NYSE:BBUC) ranks 9th in our list of the most profitable new stocks to buy. Brookfield Business Corp’s (NYSE:BBUC) total net income on a trailing twelve month basis stands at $259 million.
8. Corporacion Inmobiliaria Vesta S A B American Depositary Shares Each Representing 10 Ord Shs (NYSE:VTMX)
Net Income (TTM): $307.88M
Mexico-based real estate company Corporacion Inmobiliaria Vesta S A B American Depositary Shares each representing 10 Ord Shs (NYSE:VTMX) ranks 8th in our list of the most profitable new stocks to buy now. According to Yahoo Finance data, Corporacion Inmobiliaria Vesta S A B American Depositary Shares each representing 10 Ord Shs’s (NYSE:VTMX) net income over the past 12 months is $282 million.
In July Corporacion Inmobiliaria Vesta S A B American Depositary Shares each representing 10 Ord Shs (NYSE:VTMX) posted Q2 results. GAAP EPS in the period came in at $0.14. Revenue in the quarter jumped 20.5% year over year to $51.92 million, missing estimates by $1.02 million.
7. Companhia Paranaense de Energia COPEL ADR (NYSE:ELPC)
Net Income (TTM): $392.25M
Brazilian utility company Companhia Paranaense de Energia COPEL ADR (NYSE:ELPC) ranks 7th in our list of the most profitable new stocks today. In November Companhia Paranaense de Energia COPEL ADR (NYSE:ELPC) posted Q3 results. Net income in the quarter came in at R$441 million.
A total of two hedge funds in Insider Monkey’s database had stakes in Companhia Paranaense de Energia COPEL ADR (NYSE:ELPC) as of the end of the third quarter.
6. Atlas Energy Solutions Inc (NYSE:AESI)
Net Income (TTM): $132.28M
Atlas Energy Solutions Inc (NYSE:AESI) ranks 6th in our list of the most profitable new stocks to buy today according to hedge funds. In October Atlas Energy Solutions Inc (NYSE:AESI) posted third quarter results. GAAP EPS in the period came in at $0.51, missing estimates by $0.13. Revenue in the quarter came in at $157.62 million, beating estimates by $2.9 million.
As of the end of the third quarter of 2023, 14 hedge funds tracked by Insider Monkey had stakes in Atlas Energy Solutions Inc (NYSE:AESI).
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Disclosure. None. 16 Most Profitable New Stocks Today was initially published on Insider Monkey.