In this article, we will take a look at the 5 high growth high margin stocks to buy. To read our analysis of the recent trends, and market activity, you can go to the 12 High Growth High Margin Stocks to Buy.
5. Mastercard Inc (NYSE:MA)
EPS Next 5 Year Ratio According to FINVIZ.com: 20.84%
Profit Margin According to FINVIZ.com: 44.81%
Number of Hedge Fund Holders: 140
Mastercard Inc (NYSE:MA) is a global technology company focused on the payments industry that connects consumers, financial institutions, merchants, governments, digital partners, businesses and other organizations worldwide, enabling them to use electronic forms of payment instead of cash and checks.
On October 26, Mastercard Inc (NYSE:MA) released its financial results for Q2 2023. Its net revenue increased by 14% y-o-y to $6.5 billion, while its net earnings increased by 28% y-o-y to $3.2 billion. It reported an EPS of $3.39 which surpassed the consensus by $0.16.
Following the earnings release, BMO Capital analyst James Fotheringham lowered the price target to $472 from $488 and maintained an ‘Outperform’ rating.
As of Q3 2023, 140 hedge funds held shares in Mastercard Inc (NYSE:MA), valued at $15.3 billion. Charles Akre’s Akre Capital Management was the largest shareholder on record with ownership of 5.9 million shares valued at $2.3 billion.
Like other stocks such as Booking Holdings Inc. (NASDAQ:BKNG), Alphabet Inc. (NASDAQ:GOOGL), and Microsoft Corporation (NASDAQ:MSFT), Mastercard Incorporated (NYSE:MA) is among the 12 high growth high margin stocks to buy.
4. ASML Holding N.V. (NASDAQ:ASML)
EPS Next 5 Year Ratio According to FINVIZ.com: 21.67%
Profit Margin According to FINVIZ.com: 28.44%
Number of Hedge Fund Holders: 57
Veldhoven, Netherlands-based ASML Holding N.V. (NASDAQ:ASML) provides chipmakers with hardware, software and services to mass produce the patterns of integrated circuits (microchips). It designs and manufactures the lithography machines that are an essential component in chip manufacturing.
On October 18, ASML Holding N.V. (NASDAQ:ASML) released its financial results for Q3 2023. Its revenue declined by 3% to €6.7 billion while net bookings declined nearly 42% to €2.6 billion, compared to the previous quarter.
On November 30, JP Morgan analyst Sandeep Deshpande raised the price target for ASML Holding N.V. (NASDAQ:ASML) shares to $878 from $726 and maintained an ‘Overweight’ rating. The target price represents a potential upside of 16.83% based on recent share price.
ASML Holding N.V. (NASDAQ:ASML) is a highly sought after semiconductor stock among hedge funds as 57 out of the 910 hedge funds tracked by Insider Monkey held its shares with a total value of $6.1 billion, as of Q3 2023. Ken Fisher’s Fisher Asset Management was its largest hedge fund shareholder with ownership of 4.9 million shares valued at $2.9 billion.
3. Ferrari N.V. (NYSE:RACE)
EPS Next 5 Year Ratio According to FINVIZ.com: 26.23%
Profit Margin According to FINVIZ.com: 20.33%
Number of Hedge Fund Holders: 31
Based in Maranello, Italy, Ferrari N.V. (NYSE:RACE) is among the world’s leading luxury brands, focused on the design, engineering, production, and sale of the world’s most recognizable luxury performance sports cars. Its Formula 1 racing team, Scuderia Ferrari, is the most successful racing team in the history of Formula 1 having won 242 Grand Prix races, 16 Constructors’ World titles and 15 Drivers’ World titles.
On November 2, Ferrari N.V. (NYSE:RACE) released its results for Q3 2023. Its revenue increased by 24% y-o-y to €1.5 billion, while net income went up by 46% y-o-y to €332 million. The company also raised its guidance for FY 2023 revenue from €5.8 billion to €5.9 billion.
Following the earnings release, Evercore ISI Group analyst Michael Binetti initiated coverage of Ferrari N.V. (NYSE:RACE) shares with a price target of $375 and an ‘Outperform’ rating. The target price represents a potential upside of 11.79% based on the share price on December 21.
Like other stocks such as Booking Holdings Inc. (NASDAQ:BKNG), Alphabet Inc. (NASDAQ:GOOGL), and Microsoft Corporation (NASDAQ:MSFT), Ferrari N.V. (NYSE:RACE) is among the 12 high growth high margin stocks to buy.
2. Booking Holdings Inc. (NASDAQ:BKNG)
EPS Next 5 Year Ratio According to FINVIZ.com: 27.48%
Profit Margin According to FINVIZ.com: 25.70%
Number of Hedge Fund Holders: 81
Based in Norwalk, Connecticut, Booking Holdings Inc. (NASDAQ:BKNG), is a leading provider of online travel and related services with a presence in more than 220 countries and territories across the world. The company provides its services primarily through six online platforms: Booking.com, Priceline, Agoda, Rentalcars.com, KAYAK and OpenTable. It boasts more than 28 million listings of hotels, homes, apartments, and other unique places to stay across its platforms.
As of Q3 2023, 81 of the 910 hedge funds tracked by Insider Monkey held shares of Booking Holdings Inc. (NASDAQ:BKNG), worth $8.0 billion. Its largest shareholder was Arrowstreet Capital with ownership of 0.5 million shares valued at $1.6 billion.
RiverPark Advisors, an investment advisory firm, made the following comments about Booking Holdings Inc. (NASDAQ:BKNG) in its Q3 2023 investor letter:
“Booking is the world’s leader in online travel, operating in 200 countries with brands including Booking.com, priceline.com, agoda.com, Kayak, Rentalcars.com and OpenTable. The company has been a dominant on-line travel agency for more than a decade with a high-margin business model that requires limited capital expenditures, typically less than 3% of revenue, producing $6.2 billion of free cash flow for 2022 and $7.2 billion expected for 2024. The company has used its free cash flow for episodic acquisitions as well as to return cash to shareholders. BKNG is well positioned in travel as the largest player in online lodging bookings and the second largest player in alternative accommodations.”
1. EOG Resources, Inc. (NYSE:EOG)
EPS Next 5 Year Ratio According to FINVIZ.com: 54.90%
Profit Margin According to FINVIZ.com: 33.22%
Number of Hedge Fund Holders: 45
Houston, Texas-based EOG Resources, Inc. (NYSE:EOG) is one of the largest crude oil and natural gas exploration and production companies in the United States with proved reserves in the United States and Trinidad.
On November 2, EOG Resources, Inc. (NYSE:EOG) released its financial results for Q3 2023. It generated $6.2 billion total revenue and $2.0 billion net income which translates to a normalized EPS of $3.44. The revenue figure was nearly $437 million more than consensus while EPS exceeded expectations by $0.45.
EOG Resources, Inc. (NYSE:EOG) increased its regular quarterly dividend by 10% to $0.91 per share and also declared a special dividend of $1.50 per share. The company has never suspended or reduced its regular dividend.
EOG Resources, Inc. (NYSE:EOG) is the best high growth high margin stock to buy based on EPS Next 5 Year Ratio. Its shares were held by 45 hedge funds as of September 30. Its largest hedge fund shareholder was Harris Associates with ownership of 7.9 million shares valued at $1.0 billion.
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