The Stock Market’s Strong Start in 2024
The stock market is off to a good start in 2024, with the S&P 500 index setting new record highs and experiencing a 19% increase over the past year. There are signs that macroeconomic conditions are improving, leading many to believe that the market’s run could continue.
StoneCo – Undervalued Potential
StoneCo, a Brazil-based financial technologies company, is one of the top stocks to watch in 2024. Despite challenges that impacted its lending unit, StoneCo has overcome these issues and is now trading at levels that leave room for explosive returns.
StoneCo is currently valued at just 14 times this year’s expected earnings, making it appear cheap in the context of its recent momentum. The company experienced a 25% increase in revenue year over year in the third quarter, and its adjusted net income more than quadrupled in the same period.
Looking ahead, StoneCo expects to grow its adjusted net income at an average annual rate of 31% from 2024 through 2027. Even if the company were to only grow its profits at half that rate, its shares would still be undervalued. If StoneCo achieves its growth target, there is a high chance that its shares will trade above their current level.
Take-Two Interactive – The Power of Grand Theft Auto
Take-Two Interactive, a leading publisher of video games, is another top stock pick for 2024. The company is best known for its massively successful Grand Theft Auto (GTA) series, with the most recent release, Grand Theft Auto V, being the most profitable entertainment product ever released.
Take-Two is gearing up to release Grand Theft Auto VI, which is forecasted to be released in the first quarter of next year. This highly anticipated release is expected to supercharge the company’s financial performance.
For the current fiscal year, Take-Two’s guidance calls for bookings of approximately $5.5 billion and unrestricted adjusted operating cash flow of $1 billion. Looking ahead to the next fiscal year, with the release of GTA VI, the company expects to record over $8 billion in bookings and more than $1 billion in unrestricted adjusted operating cash flow.
Unlike many other video game franchises, Grand Theft Auto has demonstrated long-term success. With GTA V being a strong seller for over a decade, the upcoming sequel suggests that Take-Two is poised for a new growth phase.
Potential Investment Opportunities
Investors looking to capitalize on long-term growth should consider investing in StoneCo and Take-Two Interactive. Both companies have strong potential for future success and could deliver significant returns to shareholders.
The Bottom Line
With the stock market off to a strong start in 2024, there are promising investment opportunities for long-term growth. StoneCo and Take-Two Interactive are two top stocks to watch, with undervalued potential and the highly anticipated release of Grand Theft Auto VI, respectively. Investors who recognize the long-term opportunities in these companies may see significant returns in the future.
Analyst comment
Positive news: The stock market has had a strong start in 2024, with the S&P 500 index setting new record highs and experiencing a 19% increase over the past year. There are signs of improving macroeconomic conditions, indicating the market’s run could continue. StoneCo is undervalued and has potential for explosive returns, while Take-Two Interactive is expected to see significant financial performance with the release of Grand Theft Auto VI. Investors who recognize the long-term opportunities in these companies may see significant returns in the future. The market is expected to continue its bullish momentum in the near term, with potential for long-term growth in StoneCo and Take-Two Interactive.
