Discovering chances with substantial growth potential in the stock market might unearth buried jewels. These three obscure stocks have innovative strategies and tremendous growth potential.
The first one is a leading company in the building materials sector. It has excellent sales growth supported by a competitive pricing approach. Additionally, the company demonstrates successful market penetration and diversification tactics, with a steady rise in the pricing of its main products and noteworthy contributions from its Urbanization Solutions division.
Next, the second distinguishes itself in the travel sector by utilizing cutting-edge technology and strategic alliances to improve client experiences and spur revenue expansion. Its AI-powered Travel Assistant, SOFIA, and alliances with big banks demonstrate its will to maintain an advantage in a cutthroat industry.
In the meantime, the third one has consistently grown its top-line despite difficulties in the global market. This is based on the company’s concentration on the home market. The company may derive growth through investments because of its proactive approach to debt reduction.
These businesses operate in various industries, including technology, travel services, and building materials. Read more to learn how their distinctive business models have contributed to their rapid growth.
Cemex (CX)
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Cemex’s (NYSE:CX) sharp pricing strategy is demonstrated by the patterns in its top-line. Consolidated net sales in 2023 increased by 8% on a like-to-like basis to U.S.$17.4 billion from the year before. The company’s pricing approach has been progressive in all areas, as seen by the rise in sales. In 2023, prices for key items increased by 12% to 19%, which greatly boosted overall top-line growth. Throughout the year, the pricing momentum was consistent, suggesting that the pricing plan was executed consistently.
Furthermore, Cemex’s performance and company diversification initiatives exhibit trends that align with its growth investment plan. Operating EBITDA outperformance in 2023 was attributed to the company’s growth investment strategy accomplishments and the ongoing expansion of its Urbanization Solutions division, with 13% of the additional EBITDA coming from growth initiatives. Thus, this demonstrates the substantial influence of these efforts on overall profitability.
Finally, the Urbanization Solutions division increased at a 24% compound annual growth rate from 2019 to 2023, accounting for 9% of consolidated EBITDA. Therefore, the expansion of the Urbanization Solutions division shows how well Cemex is diversified and focuses on pursuing new opportunities and sources of income.
Despegar (DESP)
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Strategic alliances and ongoing innovation support Despegar’s (NYSE:DESP) growth and competitive advantage. The partnership’s aim (with Banco Davivienda) is to provide the 16+ million customers of Banco Davivienda with differentiated travel experiences. The advantages that arise from this include enhanced client loyalty and new sources of income.
SOFIA is a multimodal digital travel aid driven by AI. It is a tailored travel option with smooth client communications. These strategic efforts improve the consumer experience, encourage interaction, and set Despegar apart from competitors. Moreover, these efforts demonstrate Despegar’s dedication to staying ahead of market developments and providing its clients value-added services. Despegar creates new development opportunities and fortifies its market through partnerships and technology.
Additionally, Despegar has expressed confidence in its development trajectory and operational skills, as seen by its strong financial projections for 2024. The 2024 Annual Guidance predicts at least $820 million in sales, representing 16% year-over-year (YoY) growth, and at least $150 million in adjusted EBITDA, representing 28% YoY growth.
In short, Despegar has demonstrated its proactive approach to capitalizing on market possibilities. Overall, the guidance demonstrates the business’s capacity to sustain growth rates that lead the industry.
CompoSecure (CMPO)
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CompoSecure (NASDAQ:CMPO) saw steady revenue growth, primarily due to its concentration on home markets. Comparing Q4 2023, net sales increased 7% from Q4 2022 to $99.9 million. Similarly, net sales in 2023 increased to $390.6 million from 2022, a 3% increase. The majority of the top-line boost in 2023 came from domestic sales, which increased steadily, while overseas sales fluctuated because of the state of the world economy.
Moreover, this implies that CompoSecure’s focus on the home market has successfully increased income. Consequently, the company has the fundamental ability to seize local possibilities and market leads with growth potential, even in the face of foreign market problems.
Furthermore, the total debt has decreased from $363.1 million in 2022 to $340.3 million in 2023. The 2023 secured debt leverage ratio is 1.39x, down from 1.62x in 2022. In 2023, cash boosted from $13.6 million to $41.2 million.
Finally, CompoSecure’s proactive debt reduction strategy has lowered leverage ratios and strengthened financial stability. Hence, the rise in cash further strengthens the company’s financial situation, leaving room for expansion and further investments.
As of this writing, Yiannis Zourmpanos held a long position in DESP. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Yiannis Zourmpanos is the founder of Yiazou Capital Research, a stock-market research platform designed to elevate the due diligence process through in-depth business analysis.
