We recently compiled a list of the 8 Best Stocks to Buy for High Returns in 2024. In this article, we are going to take a look at where Global Payments Inc. (NYSE:GPN) stands against the other stocks to buy for high returns.
The broader market reached new record highs on October 11, driven by financial stocks posting stronger-than-expected quarterly results. Adding to investor optimism is the recent decline in U.S. inflation, which dropped to 2.4% in September, moving closer to the Federal Reserve’s 2% target. This has fueled hopes of a potential quarter-point rate cut at the Fed’s November meeting. As of October 16, the S&P 500 stood at 5842.47, only eight months after surpassing the 5,000 mark for the first time. Additionally, the September Consumer Price Index revealed a sharper-than-expected rise in consumer prices. However, Omair Sharif, president of Inflation Insights, told Yahoo Finance that while inflation data exceeded expectations, housing inflation is beginning to cool. He also noted a significant decline in food prices since the post-COVID surge, suggesting there are several positive trends to take away from the current market situation.
Adding to that, Carson Group’s chief market strategist, Ryan Detrick, believes the current bull market is still in its early stages, with more gains to come. However, he doesn’t foresee a repeat of the strong returns seen in 2023 and 2024, when the S&P 500 rose 24% and 22%, respectively. Instead, Detrick expects more moderate growth, noting that the average gain for stocks in the third year of a bull market is around 8%, aligning with the typical annual return.
Meanwhile, Jay Woods, chief global strategist at Freedom Capital Markets, highlighted that one of the most striking aspects of the current bull market is how few investors believed in it from the start:
“I think it’s important to preface it with when it started, no one believed it. They just thought it was a bear market rally. And then they doubted that it had legs, and then it was just seven stocks. And now, all of a sudden, it is powerful. And I think the momentum is continuing. You got the rate cycle, you got broadening out, we have wind at our sails, and this bull market should last at least another 12, maybe 18 months.”
On another front, strategists warn that future market gains will hinge on identifying sectors with strong earnings growth. As Artificial Intelligence becomes a key driver of market performance, attention will turn to its impact on profitability across various industries. UBS notes that October has historically been the most volatile month for tech stocks, with the Nasdaq 100 showing an average volatility of 26% in October over the past 40 years, compared to 22% in other months. Given the current geopolitical uncertainties and concerns around export controls, the bank anticipates increased volatility in tech stocks in the near term.
Our Methodology
To compile our list of the best stocks for high returns, we focused on some of the top companies in Insider Monkey’s database that have ana average analyst upside of at least 30%. These companies were then ranked based on their upside potential, in ascending order. We have also mentioned the number of hedge fund investors that held stakes within each company in the second quarter of 2024, out of a total of 912 hedge funds.
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).
A payment terminal in action with customers apart of the experience.
Global Payments Inc. (NYSE:GPN)
Average Analyst Upside: 38.00%
Number of Hedge Fund Holders: 66
Global Payments Inc. (NYSE:GPN), a U.S.-based fintech company, delivers payment technology and software solutions across a vast global network of 4.6 million merchant accounts, 4,000 tech partners, and 1,500 financial institutions across more than 100 industries.
At its 2024 Investor Conference, Global Payments Inc. (NYSE:GPN) outlined its strategy for operational transformation and long-term value creation, including potential divestitures worth $500 million to $600 million in annual revenue to streamline operations and enhance profitability.
Moreover, the company reported solid Q2 2024 results, with GAAP revenue reaching $2.57 billion—a 5% year-over-year increase—and GAAP diluted earnings per share (EPS) rising 40% to $1.47.
On October 15, Baird reaffirmed its Outperform rating on Global Payments Inc. (NYSE:GPN) with a $150 price target. The firm expects Q3 EPS to meet projections, with a potential modest slowdown in the Merchant segment. However, currency exchange rates may provide a slight advantage. Baird also highlighted that future stock buybacks could be significant once Global Payments Inc. (NYSE:GPN) achieves a better leverage position.
As of Q2 2024, Insider Monkey’s database showed that 66 hedge funds held stakes in Global Payments Inc. (NYSE:GPN).
Parnassus Investments stated the following regarding Global Payments Inc. (NYSE:GPN) in its Q2 2024 investor letter:
“Global Payments Inc. (NYSE:GPN) stock fell on investor fears that a slowing economy could weigh on payment processing companies. The company will host an investor day focused on improving efficiencies and strategic redeployment of assets in the fall, which we believe will unlock hidden value in the undervalued shares.”
Overall GPN ranks 5th on our list of the best stocks to buy for high returns in 2024. While we acknowledge the potential of GPN as an investment, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you’re seeking an AI stock with even more promise than GPN and trading at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
