8 Best Stocks to Buy for High Returns in 2024

4. PDD Holdings Inc. (NASDAQ:PDD) 

Average Analyst Upside: 39.46%

Number of Hedge Fund Holders: 86

PDD Holdings Inc. (NASDAQ:PDD) is a global commerce conglomerate operating platforms like Pinduoduo and Temu. Pinduoduo offers a wide variety of products—from agricultural goods and apparel to electronics and personal care—while Temu serves as a digital marketplace connecting businesses with consumers.

The company posted robust financials, reporting total revenues of RMB 97 billion (RMB 1 ≈ US$0.14), reflecting an 86% year-over-year growth. GAAP operating profit grew significantly to RMB 32.6 billion, up from RMB 12.7 billion a year ago, while the company ended the quarter with a strong cash position of RMB 284.9 billion.

On October 9, CFRA adjusted its price target for PDD Holdings Inc. (NASDAQ:PDD), lowering it to $113 from $130 but maintaining a Buy rating. This revision reflects a reduced earnings valuation multiple, now at 8.0 times the projected 2025 EV/EBITDA, slightly below the industry peer median of 9.5 times. Despite the adjustment, PDD Holdings Inc. (NASDAQ:PDD) is projected to achieve 60% revenue growth in 2024, driven by its value-for-money focus appealing to cost-conscious consumers. In addition, growth is anticipated to moderate to 25% in 2025 as the company’s overseas expansion, currently spanning over 70 countries, stabilizes.

According to Insider Monkey’s Q2 data, hedge fund interest in PDD Holdings Inc. (NASDAQ:PDD) rose to 86 funds holding long positions, up from 76 the previous quarter. Rajiv Jain’s GQG Partners remains the largest shareholder, with 10.8 million shares valued at $1.43 billion.

Hayden Capital stated the following regarding PDD Holdings Inc. (NASDAQ:PDD) in its Q2 2024 investor letter:

“PDD Holdings Inc. (NASDAQ:PDD): A few weeks ago, Latepost (a leading Chinese technology news outlet) confirmed Pinduoduo’s online grocery initiative is solidly profitable (LINK). According to the article, Duoduo Grocery is able to achieve ~5% net profit margins in competitive markets (where they go up against Meituan Select). In non-competitive markets, they can achieve ~10 – 15% net margins.

The company doesn’t disclose the exact scale of Duoduo Grocery, but our calculations indicate it’s likely around ~RMB 300BN this year, and still growing in the double-digits. At that level, the division is likely contributing ~US $2.5BN in annual profits.

It’s an impressive result, but admittedly, not a huge needle-mover in light of the total $17.6BN net profits the company is expected to make this year (~14% of overall profits)…” (Click here to read the full text)