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As the dust settles on the current bull run that commenced in spring 2023, investors may be unwittingly passing over some interesting opportunities. These sleeper stocks show signs of having finally reversed their fortunes, bouncing back from lows and now heading on an upward trajectory, buoyed by positive catalysts such as robust financial performances, optimistic forward guidance, stock buybacks, and dividend disbursements that have piqued the interest of analysts through earnings season. Identifying and getting in on these turnaround narratives before share prices take flight could be the game-changer for investors. Luckily, we’ve got you covered with three stocks flying under the radar that have the potential to make your February unforgettable.
Restaurant Brands International (QSR)
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Restaurant Brands International (NYSE:QSR) has delivered solid fourth-quarter financial results, propelled by robust sales at its Burger King and Tim Hortons restaurant chains. The company, which owns Popeyes Chicken and Firehouse Subs, reported earnings per share (EPS) of $0.75, outpacing the $0.73 estimate on Wall Street. Sales in the October through December period amounted to $1.82 billion, slightly higher than the forecast of $1.81 billion. Total sales swelled by 8% from the prior year.
Tim Hortons, a beloved coffee chain in Canada, witnessed a remarkable 8.4% year-over-year surge in same-store sales, surpassing estimates of 4.7%. Meanwhile, Burger King reported a 6.3% uptick in same-store sales, and Popeyes registered a 5.5% rise in the same metric. Burger King is a year into a rejuvenation strategy involving restaurant renovations and elevated advertising spending. Additionally, Restaurant Brands acquired Burger King’s largest U.S. franchisee, Carrols Restaurant Group, in a $1 billion transaction to expedite restaurant overhauls.
QSR stock has appreciated by 15% over the past 12 months, and the potential for further gains seems promising.
Caterpillar (CAT)
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Caterpillar (NYSE:CAT) is another stock making its way back onto investors’ radar. CAT stock leapt by 5% following the announcement of robust Q4 2023 results by the construction equipment manufacturer. Caterpillar revealed Q4 EPS of $5.23, surpassing the $4.76 consensus among analysts. The company logged sales of $17.10 billion, in line with Wall Street projections. Known for its iconic yellow and black dump trucks, Caterpillar reported an operating profit margin of 18.9%, up from 17% a year ago.
Looking ahead, Caterpillar anticipates flat sales for 2024, mirroring last year’s figures, and also forecasts a 19% profit margin for the year. With the economy showing resilience and ongoing infrastructure spending by federal and state governments, Caterpillar’s earnings could spring pleasant surprises in the current year and beyond. After years of neglect, CAT stock is on the ascent, having advanced by 10% in 2024 and a remarkable 31% over the past 12 months.
Ford (F)
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Not only has Ford (NYSE:F) reported better-than-expected Q4 2023 earnings, but the venerable Detroit automaker has also declared a special dividend for stockholders. Ford is set to pay a one-time dividend of $0.18 per share in addition to its regular dividend payment of $0.15 per share for the first quarter, with both dividends payable on March 1. The dividend yield on Ford’s stock currently stands at 4.79%, excluding the special payout to stockholders.
Expressing confidence in the special dividend, Ford posted an EPS of $0.29 for Q4 2023, outshining the $0.14 estimate on Wall Street. Revenue for the quarter amounted to $43.20 billion, surpassing the estimated $40.12 billion, marking a 4% increase from the prior year. Investors responded positively to the results and the special dividend, propelling F stock upwards by 3% year to date.
Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.
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