The stock market has recovered from its summer stumble, with the major indexes approaching their all-time highs again. Growth stocks are enjoying particular strength as investors look to companies that can benefit from the Federal Reserve’s upcoming interest rate reduction cycle.
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It might seem too late to cash in on this trend, with the Nasdaq-100 Index already moving toward new highs. Under the surface, however, a lot of growth-focused stocks have gotten left out of the recent rally. Here are five leading stocks to buy for September that pack a solid punch and are currently available at a discount:
— Airbnb Inc. (ticker: ABNB)
— Celsius Holdings Inc. (CELH)
— Snowflake Inc. (SNOW)
— GlobalFoundries Inc. (GFS)
— Charles River Laboratories International Inc. (CRL)
Airbnb Inc. (ABNB)
Hospitality company Airbnb has seen its shares fall about 23% over the past six months, with a particularly swift decline in August following the company’s latest earnings report. The company reported another quarter of double-digit booking growth, but cautioned that spending growth appears to be slowing as the post-pandemic tourism boom wanes. In addition, Airbnb faces mounting challenges such as tighter regulation, customer pushback against high platform fees and increasing competition from hotels.
Regardless, the company is already solidly profitable and is continuing to grow its top line at a double-digit rate. Airbnb has a strong brand and isn’t going anywhere despite the near-term regulatory and macroeconomic obstacles.
Celsius Holdings Inc. (CELH)
Celsius Holdings is a consumer staples company focused on beverages. It is best known for sugar-free energy drinks that have taken the space by storm. It also sells a variety of other fitness-focused beverages and supplements.
Celsius has grown distribution tremendously over the past few years, transforming itself from a regional brand to a nationwide phenomenon. Specifically, sales are up from $75 million in 2019 to $1.3 billion last year. Growth has slowed down this year, with analysts seeing a more modest 18% growth rate going forward. However, CELH stock has now dropped 60% due to this revenue growth deceleration. That reaction seems overdone. The company is already profitable and, after the plunge, sells for a more reasonable 31 times expected 2025 earnings, which is hardly extravagant for a fast-growing consumer products company. With international expansion on the menu, Celsius has a good chance of heating up again going forward.
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Snowflake Inc. (SNOW)
Snowflake is a leading data storage and sharing company and has enjoyed explosive growth. Since its founding in 2012, Snowflake has already grown revenues to more than $3 billion annually. Analysts see the company continuing to grow and expect 26% growth this fiscal year, followed by 23% growth next year. Snowflake has already achieved profitability and recently announced a share repurchase program to start returning profits to its shareholders.
Despite the positives, the stock price has been cut in half since February. This came amid the retirement of iconic CEO Frank Slootman, along with concerns about growing industry competition. Morningstar’s Julie Bhusal Sharma believes these worries are blown out of proportion; she has a $187 fair value estimate for Snowflake today compared to its closing price of $111.56 on Aug. 28, implying 67.6% upside potential from those levels.
GlobalFoundries Inc. (GFS)
GlobalFoundries is one of the world’s largest semiconductor foundry companies. Admittedly, the field is dominated by Taiwan Semiconductor Manufacturing Company Ltd. (TSM), which has about 61% market share in the space. But, with rising geopolitical tensions between China and Taiwan, customers are looking to diversify their supply chains across different producers. That creates an opportunity for New York-based GlobalFoundries.
There’s another positive for the firm: the Biden administration’s CHIPS and Science Act, which provides large subsidies for domestic semiconductor investments. GlobalFoundries is expected to receive about $1.5 billion in government support for its new fab in upstate New York. GFS stock is currently in a downtrend as chip demand in fields such as automotive and industrial applications has waned this year. But the long-term trends are favorable for semiconductor demand, and GlobalFoundries should be able to ride that wave.
Charles River Laboratories International Inc. (CRL)
Charles River Laboratories is a health care life sciences company that helps biotech companies perform clinical research. The company is known for its lab animals — such as mice, rats and monkeys — which are used in pharmaceutical drug trials. In recent years, the company has branched out. It now offers trial design and clinical research services, software, and tools to assist biotech firms.
According to Morningstar Research, the company was involved in more than 80% of all drugs that ultimately received Food and Drug Administration approval between 2020 and 2022. That’s quite the competitive moat. CRL stock has fallen by more than half from its all-time highs as temporary windfall revenues related to COVID-19 vaccine development dried up. But with America’s aging demographics, it’s only a matter of time until biotech spending revs up again. As a kicker, Charles River just announced its first share buyback program since 2011 to take advantage of its currently discounted share price.
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5 of the Best Stocks to Buy Now originally appeared on usnews.com
Update 08/29/24: This story was published at an earlier date and has been updated with new information.
