This article presents an overview of the 5 High Growth Low/No Dividend Stocks to Buy. For a detailed overview of such stocks, read our article, 11 High Growth Low/No Dividend Stocks to Buy.
5. Royal Caribbean Cruises Ltd (NYSE:RCL)
Number of Hedge Fund Investors: 41
Royal Caribbean Cruises Ltd (NYSE:RCL) ranks 5th in our list of the best high-growth stocks with low or no dividend yields. Royal Caribbean Cruises Ltd’s (NYSE:RCL) adjusted EPS in the third quarter came in at $3.85, surpassing estimates by $0.46. Revenue in the period jumped 40.5% year over year to $4.2 billion, beating estimates by $140 million. For full-year 2023, Royal Caribbean Cruises Ltd (NYSE:RCL) expects its net yields to increase 12.9% to 13.4% on a constant currency basis.
Ariel Fund made the following comment about Royal Caribbean Cruises Ltd. (NYSE:RCL) in its Q2 2023 investor letter:
“Several stocks in the portfolio had strong returns over the period. Global cruise vacation company, Royal Caribbean Cruises Ltd. (NYSE:RCL), was one of the top 3 performers in the S&P 500 during the quarter. Shares surged following a significant top- and bottom-line earnings beat, as stronger than anticipated consumer demand is driving a record WAVE season. Forward booking trends are also ahead of historical ranges at record pricing. These factors combined with further improvement in onboard spend and solid cost containment led management to increase RCL’s full-year 2023 guidance. We believe the revised revenue and earnings outlook lays the foundation for RCL to exceed its’ three-year strategic imperative, the Trifecta Program.”
4. First Citizens BancShares Inc (Delaware) Class A (NASDAQ:FCNCA)
Number of Hedge Fund Investors: 46
First Citizens BancShares Inc (Delaware) Class A (NASDAQ:FCNCA) has a dividend yield of 0.47%. In October First Citizens BancShares Inc (Delaware) Class A (NASDAQ:FCNCA) posted strong Q3 results and also upped its dividend by a whopping 118%. Adjusted EPS in the period came in at $55.92 beating estimates by $7.09. Revenue in the quarter jumped 111.4% year over year to $2.6 billion, surpassing estimates by $240 million.
As of the end of the third quarter of 2023, 46 hedge funds out of the 910 funds tracked by Insider Monkey had stakes in First Citizens BancShares Inc (Delaware) Class A (NASDAQ:FCNCA).
Gator Capital Management made the following comment about First Citizens BancShares, Inc. (NASDAQ:FCNCA) in its Q3 2023 investor letter:
“The Fund’s largest position is First Citizens BancShares, Inc. (NASDAQ:FCNCA) (“First Citizens” or “FCNCA”). We acquired our stake over the past three years. Initially, we owned and traded around a small position in CIT Group Inc. (“CIT”) during the summer of 2020. We felt CIT was undervalued and management was making progress in reducing risk during the Covid-19 pandemic. In late 2020, CIT agreed to be acquired by First Citizens. We added to our CIT stake the morning of the acquisition announcement because we thought the acquisition was so financially attractive that First Citizens’ shares would rally and pull CIT’s shares higher. Our CIT shares were exchanged for First Citizens shares when the merger completed. We held onto our First Citizens shares because we admired the management team, we felt the bank was undervalued, and we projected the bank would benefit from higher interest rates. Then, earlier this year, First Citizens was the winning bidder in the FDIC’s auction of the failed Silicon Valley Bank (“SVB”). We added significantly to the Fund’s First Citizens position on the following Monday morning because the deal was unbelievably favorable for First Citizens.
First Citizens’s stock price rose more than 50% that day and has risen another 40% in the months since the SVB acquisition. We have not sold any shares. We believe the stock still has the potential to double over the next three years. Despite this attractive upside, we think the downside is minimal. Our downside scenario is an unchanged stock price in three years…” (Click here to read the full text)
3. PDD Holdings Inc – ADR (NASDAQ:PDD)
Number of Hedge Fund Investors: 66
PDD Holdings Inc – ADR (NASDAQ:PDD), commonly known as Pinduoduo, is one of the best high-growth stocks to buy according to smart money investors.
In December, Morgan Stanley called PDD Holdings Inc – ADR (NASDAQ:PDD) its top pick in China as the firm downgraded Alibaba.
Morgan Stanley said PDD Holdings Inc – ADR’s (NASDAQ:PDD) cross-border e-commerce business Temu is not fully valued by the market.
2. Mercadolibre Inc (NASDAQ:MELI)
Number of Hedge Fund Investors: 76
Argentina-based ecommerce company Mercadolibre Inc (NASDAQ:MELI) is a high-growth stock with no dividends. In November, BofA Securities upgraded the stock to Buy from Neutral and also increased its price target on the stock to $2,000.
As of the end of the third quarter of 2023, 76 hedge funds out of the 910 funds tracked by Insider Monkey had stakes in Mercadolibre Inc (NASDAQ:MELI). The biggest hedge fund stakeholder of Mercadolibre Inc (NASDAQ:MELI) during this period was David Blood and Al Gore’s Generation Investment Management which owns a $609 million stake in Mercadolibre Inc (NASDAQ:MELI).
ClearBridge International Growth EAFE Strategy stated the following regarding MercadoLibre, Inc. (NASDAQ:MELI) in its fourth quarter 2023 investor letter:
“Emerging growth companies Shopify and MercadoLibre, Inc. (NASDAQ:MELI) continue to show improved operational performance. MercadoLibre’s investments in new services continue to drive revenue growth and margin improvement. New loyalty programs, credit services and advertising products, for example, all contributed to good business performance.”
1. Nvidia Corp (NASDAQ:NVDA)
Number of Hedge Fund Investors: 180
With a small dividend yield of 0.03% but a huge revenue growth, Nvidia Corp (NASDAQ:NVDA) tops our list of the best high-growth stocks with low dividends. Analysts, smart money managers and retail investors are drooling over the semiconductor company thanks to the huge demand of Nvidia Corp’s (NASDAQ:NVDA) chips following the AI boom.
Bank of America analyst Vivek Arya recently said Nvidia Corp (NASDAQ:NVDA) could generate a whopping $100 billion in incremental free cash flow over 2024 and 2025.
“NVDA’s relatively depressed trading multiple – just 24x/20x CY24/25E PE versus 67%/26% [pro-forma earnings per share growth – is partly due to uncertainty in calendar 2025] growth prospects, and partly due to a very hardware dependent business unlike other large-cap software/internet peers that have recurring revenue profiles,” Arya said.
The analyst has a $700 price target on Nvidia Corp (NASDAQ:NVDA) shares.
Polen Focus Growth Strategy stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its fourth quarter 2023 investor letter:
“Apple and NVIDIA Corporation (NASDAQ:NVDA) alone drove over 1,100 basis points of the Russell 1000 Growth Index’s 42% return, so not owning them was a meaningful headwind to our relative return in 2023. NVIDIA shares rocketed higher by well over 200% in 2023 although they slightly underperformed our Portfolio and the Russell 1000 Growth in the fourth quarter. Generative AI has been a huge boon for NVIDIA as the use of LLMs like ChatGPT and others requires tremendous processing power that, today, is mostly provided by NVIDIA’s GPUs. All large cloud service providers, AI factories, and many large consumer internet companies are laying the foundation for generative AI by deploying NVIDIA GPUs and other parallel processing chips to be able to do large scale generative AI either for internal use (i.e., Meta) or as a service for others (i.e., AI factories) or both (cloud service providers such as Amazon, Microsoft, and Google).
Given many of NVIDIA’s customers or its end customers are still very much in the experimentation phase with generative AI, it is unclear how sustainable the current demand for GPUs truly is. At the same time, it is known that NVIDIA has historically been highly cyclical. By the end of 2024, we believe NVIDIA will already account for roughly half the market for datacenter chips, servers, and networking equipment, which is unprecedented. Even though the valuation at 25x forward earnings doesn’t look very demanding at first glance, it assumes NVIDIA will own virtually the entire datacenter chip market in just the next few years and will sustain year-on-year growth despite being a cyclical business that is currently experiencing much higher new peaks.
We believe NVIDIA is a highly advantaged business, but we also believe the long-term growth outcomes are currently too variable, and the expectations built into the company’s $1.2 trillion valuation as of this writing assume the most optimistic of those scenarios.”
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