Investors look to stocks soaring over 200% in 2024 for momentum plays, but the real magic lies in the solid foundations of these companies for long-term growth.
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When considering stocks that have surged over 200% in 2024, it’s essential to navigate the fine line between riding momentum and avoiding potential pitfalls. Companies like Tesla (NASDAQ:TSLA) and Gamestop (NYSE:GME) have witnessed extreme fluctuations, leaving investors either basking in gains or nursing significant losses. However, identifying stocks capable of sustaining their upward trajectory is where the real challenge lies.
These three stocks, all boasting over 200% growth this year, seem to offer a compelling narrative that contradicts the prevalent skepticism. Each carries optimistic factors fueling their ascent, alongside unique characteristics that insulate them from broader market turbulence. In essence, despite their remarkable surges, there might still be room for further upside as they ride the wave of investor enthusiasm.
MediaCo Holding (MDIA)
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MediaCo Holding (NASDAQ:MDIA), a terrestrial radio and broadcasting media company, has defied expectations by skyrocketing a staggering 361% since the beginning of the year. This remarkable surge was partly catalyzed by the acquisition of a substantial 95% stake in the firm by hedge fund Standard General LP. This move not only signals confidence in MediaCo’s future from hedge fund CEO Soohyung Kim but also hints at potential shareholder activism aimed at boosting stock prices.
The recent acquisition of Estrella Media by MediaCo, spearheaded by new interim CEO Jacqueline Hernandez, a seasoned Telemundo executive, further diversifies the company’s reach into Spanish-language markets. With such strategic maneuvers and leadership in place, the initial surge for MediaCo in 2024 may only be the tip of the iceberg despite its already astounding growth.
Root (ROOT)
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Root (NASDAQ:ROOT) has shattered all expectations by surpassing the 200% growth threshold, boasting returns nearly double that figure in 2024. Root’s ascent can be attributed to the relentless enthusiasm surrounding AI technologies coupled with a remarkably robust fourth-quarter earnings report.
In the previous year, Root witnessed a 31% surge in gross written premiums, reaching $783 million, despite a 1% decline in gross earned premiums to $636 million. Notably, the company successfully halved its net losses to $147 million, recording its most successful year to date. Analysts have flocked to Root following these developments, with Jefferies leading the charge by quadrupling its price target and endorsing the company’s trajectory towards sustainable growth, market share expansion, and scalable operations.
With its stock climbing a whopping 400% since the start of the year and an impressive 1,127% surge over the past twelve months, Root is steadily advancing towards profitability, demonstrating significant strides along the way.
Super Micro Computer (SMCI)
The Rise of Super Micro Computer in the AI Sector
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Super Micro Computer (NASDAQ:SMCI) may not have sprinted to the forefront of the stocks’ race, but it’s been a steady trailblazer, boasting a remarkable surge of over 225% since the beginning of the year. Riding the AI wave, SMCI has carved out a niche as a key player in the artificial intelligence space, with its server-sized computing solutions catering to tech titans like Nvidia (NASDAQ:NVDA) and Advanced Micro Devices (NASDAQ:AMD).
A Diamond in the Rough
Super Micro Computer shines bright as an exemplary instance of strategic investing in the semiconductor and AI domain, showcasing how the real gold might be found with the suppliers rather than the end-users. It’s akin to investing in the suppliers of “picks and shovels” during a gold rush, rather than the miners themselves.
The Value Proposition
What’s intriguing is how SMCI’s price-to-earnings ratio of 66x stacks up against Nvidia’s 97x. Although not direct parallels, this contrast hints that despite its notable 200% surge, Super Micro Computer may still be flying slightly under the radar in terms of valuation compared to one of its major clients hogging the spotlight in the AI euphoria.
As of the publication date, Jeremy Flint has no stake in the stocks discussed. The views articulated in this piece are solely those of the author and are subject to the InvestorPlace.com Publishing Guidelines.
