The S&P 500 keeps setting new records in 2024. Despite a recent dip following discouraging inflation data, the index remains resilient, and consumer confidence hints at a looming economic resurgence. Against this backdrop, savvy investors should consider securing their positions in the market by making astute investment choices, and these three stocks are nothing short of supercharged.
Reflecting on the previous year, the S&P 500 delivered a remarkable 24% gain driven by a select group of stocks recognized as the Magnificent Seven. In the current year, a broader array of companies is propelling the index higher, elevating these three supercharged performers as prime investment opportunities. It is imperative to seize them before the S&P 500 embarks on its journey to achieve yet another all-time high.
Stratospheric Potential: Fastly (FSLY)
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Occupying a commanding position among edge computing stocks, Fastly (NASDAQ:FSLY) exemplifies the potential for astronomical growth. Edge computing, a rapidly evolving sector expected to swell from $16.5 billion in 2023 to $156 billion in 2030, embodies a staggering 38% annual growth rate. The company’s mission is to elevate speeds by curtailing data latency and refining content delivery. Fastly offers enhanced content delivery, improved image optimization, video and streaming, alongside a suite of application security services.
As businesses migrate increasing volumes of data to the cloud, Fastly is witnessing a surge in patronage and expenditure, positioning it as an eminent choice for investment. Noteworthy is the Dollar-based net expansion rate (DBNER), a metric indicative of the increased spending by existing customers, which soared to 123% for the quarter—marking a 23% increment over the same period a year ago.
Moreover, spending by enterprise clients, accounting for over 90% of Fastly’s total revenue and defined as those disbursing above $25,000 per quarter, climbed 5% sequentially. Despite the 39% surge in FSLY stock since November, it is evident that the potential for growth in the domain of edge computing is far from exhausted. Fastly, therefore, holds unbridled potential and is a compelling prospect to bolster your portfolio before the S&P 500 renews its upward trajectory.
Unwavering Resilience: Powell Industries (POWL)
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An unyielding force in the realm of electrical equipment, Powell Industries (NASDAQ:POWL) shines as another company of relentless momentum. Its remarkable agility is evidenced by a commendable surge of over 20% in share value within a short timeframe.
Providing electrical systems to petroleum, oil and gas producers, refineries, liquefied natural gas (LNG) facilities, and utilities, Powell capitalizes on the enduring demand for fossil fuels within the energy sector. The enthusiasm for fossil fuel persists, with renewables yet to suffice for the colossal requirements of the contemporary power grid as consumers turn back to the reassurance of oil and gas.
Albeit a transient dip in POWL stock due to inflation apprehensions, the company maintains an impressive revenue trajectory, evidenced by a staggering 53% surge in sales during the recent fiscal quarter. Accompanied by $198 million in new orders, representing a formidable 15% sequential increase, this resounding performance underscores Powell’s robust position in the market.
In the long term, Powell reported a near-doubling of its order backlog to $1.3 billion, a reassuring indicator of its resilience even in the event of an economic downturn. Hence, Powell Industries exemplifies unwavering resilience, rendering it an indispensable candidate for investment considerations.
Unstoppable Force: XPO (XPO)
The Journey Ahead: XPO’s Strides in the World of Logistics
When it comes to the world of logistics, one company has managed to stand out from the crowd. XPO, a leader in less-than-truckload (LTL) transportation, has been making waves in the industry. Founded in 2012 by Bradley Jacobs, a serial entrepreneur known for turning startups into billion-dollar enterprises, XPO has been on a remarkable growth trajectory. Since its IPO, the company has generated over 3,500% in total return, putting the S&P 500’s increase of less than 800% to shame.
The Entrepreneurial Trailblazer Behind XPO’s Success
Bradley Jacobs is no stranger to success. With a Midas touch for entrepreneurship, Jacobs has built and sold numerous businesses, reaping substantial profits along the way. His ventures, including Amerex Oil, Hamilton Resources, United Waste, and United Rentals (NYSE: URI), have all played a part in establishing his reputation as a savvy businessman. The entrepreneurial spirit that drives XPO is deeply embedded in Jacobs’ DNA, and this has undoubtedly contributed to the company’s success.
XPO’s Strategic Evolution and Growth
While XPO has undergone significant developments over the years, perhaps the most noteworthy is the spin-off of its GXO Logistics (NYSE: GXO) business, responsible for managing outsourced supply chains and warehousing on a global scale. Additionally, XPO divested its RXO (NYSE: RXO) truck brokerage firm. The company also had intentions to divest its European operations in 2022 but was forced to postpone this move due to unfavorable capital markets. However, despite these shifts, XPO remains poised for continued growth and success.
A Leaner, Stronger Focus on Transportation Fleet for LTL Shipping
Following these strategic maneuvers, XPO has emerged as a leaner yet more robust player in the transportation industry, particularly in the realm of LTL shipping. By reducing damage claims to all-time lows, expanding its network of terminals and drivers, and embracing cutting-edge technology to enhance operational efficiency, XPO has positioned itself for even greater business volume, increased revenue, and higher adjusted profits.
Seizing Opportunities in the Face of Adversity
While some of its competitors have faced significant challenges—Yellow filing for bankruptcy, and both UPS (NYSE: UPS) and FedEx (NYSE: FDX) encountering tough headwinds—XPO has charted a different course. Where others have struggled, XPO is not just weathering the storm but thriving. The company’s stock is shaping up to be a promising long-term investment, beckoning investors to join the journey to success.
With XPO’s resilient performance and strategic initiatives, it’s clear that the company is poised to navigate the unpredictable seas of the logistics industry with confidence and acumen. The road ahead looks bright for XPO, making it a compelling choice for investors seeking enduring growth in the dynamic world of logistics.
At the time of publication, the opinions expressed in this article reflect the views of the author and do not represent any current stock positions. Rich Duprey, the author of this article, boasts two decades of experience in covering stocks and investing, with a portfolio of articles published in widely recognized financial publications.
