14 High Growth NASDAQ Stocks That Are Profitable

Published on January 12, 2024 at 9:37 am by Fahad Saleem in Hedge Funds, News

In this article, we will take a detailed look at the 14 High Growth NASDAQ Stocks That Are Profitable. For a quick overview of such stocks, read our article 5 High Growth NASDAQ Stocks That Are Profitable.

The AI boom that started with the launch of ChatGPT caused almost every tech company to launch (or at least talk about) AI-related products and services. While major mega-cap tech stocks which were positioned well to take advantage of the AI-led rally saw huge gains in 2023, analysts believe in 2024 it’s time for the pick-and-shovel names to pack gains as companies begin to actually implement AI-related technologies in their products. Market analysts believe this year we would see gains broadening out to other technology companies instead of just getting concentrated in a few names like Microsoft Corp (NASDAQ:MSFT), Alphabet Inc Class C (NASDAQ:GOOG) and Adobe Inc (NASDAQ:ADBE).

Magnificent Seven: A Crowded Trade

JPMorgan in January, however, said in a report that the “strong” are expected to keep getting “stronger” without a solid reversal.

“The percent of market cap that the “Magnificent 7” represent is at an all-time high, and they accounted for most of the equity market gains in 2023. Another sign of concentration: last year also saw the second highest percentage of S&P 500 stocks underperforming the index since 1980 (72% underperformed vs 52% average). But without judicial brakes on them, the strong are getting stronger and I see little reason, other than valuations that become too high relative to the market, that this should change. On this latter point, see the bottom chart. While megacap stocks look increasingly expensive relative to the market, after adjusting for their higher earnings growth expectations they don’t look nearly as overpriced. The challenge: as shown in the last chart, everyone seems to agree; this is a very crowded trade.”

While mega-cap tech stocks could keep getting stronger in 2024, as JPMorgan said, these “crowded” trades have matured and many analysts are now recommending little-known companies with growth potential. Many analysts have also started to see signs of a major rotation where investors are taking profits from big stocks like Microsoft Corp (NASDAQ:MSFT), Alphabet Inc Class C (NASDAQ:GOOG) and Adobe Inc (NASDAQ:ADBE) and investing in other companies.

In this backdrop, we decided to take a look at some high-growth profitable NASDAQ stocks that are also gaining the attention of hedge fund investors.

Photo by Chris Liverani on Unsplash

Methodology

For this article we first used a stock screener to list down all profitable NASDAQ stocks and then picked 14 of these stocks with the highest revenue growth seen recently on a quarter-over-quarter basis and over the past five years. These stocks are ranked in ascending order of the number of hedge fund investors. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.

14. Payoneer Global Inc (NASDAQ:PAYO)

Number of Hedge Fund Investors: 33

Payoneer Global Inc (NASDAQ:PAYO) ranks 14th in our list of the best high-growth NASDAQ stocks to buy according to hedge funds. Payoneer Global Inc (NASDAQ:PAYO) in November posted Q3 results. GAAP EPS in the quarter came in at $0.03 missing estimates by $0.02. Revenue jumped 30.9% year over year to $208.04 million, missing estimates by $0.92 million.

Out of the 910 hedge funds tracked by Insider Monkey, 33 hedge funds had stakes in the payments company Payoneer Global Inc (NASDAQ:PAYO). The most significant stakeholder of Payoneer Global Inc (NASDAQ:PAYO) during this period was Phill Gross And Robert Atchinson’s Adage Capital Management which owns a $39 million stake in Payoneer Global Inc (NASDAQ:PAYO).

13. Shoals Technologies Group Inc (NASDAQ:SHLS)

Number of Hedge Fund Investors: 33

Shoals Technologies Group Inc (NASDAQ:SHLS) was part of Goldman Sachs’ list of laggards of 2023 the firm believes could outperform in 2024. Shoals Technologies saw a 47% jump in Q3 revenue.

Insider Monkey’s database of 910 hedge funds shows that 33 hedge funds had stakes in Shoals Technologies Group Inc (NASDAQ:SHLS). The biggest hedge fund stakeholder of Shoals Technologies Group Inc (NASDAQ:SHLS) during this period was Todd J. Kantor’s Encompass Capital Advisors which owns an $80.3 million stake.

ClearBridge Select Strategy made the following comment about Shoals Technologies Group, Inc. (NASDAQ:SHLS) in its Q3 2023 investor letter:

“Solar energy technology companies SolarEdge and Shoals Technologies Group, Inc. (NASDAQ:SHLS), meanwhile, saw headwinds from destocking in the U.S. and Europe. U.S. demand could slow further due to new net metering rules that reduce the value to consumers from sending excess residential solar energy back to the grid. SolarEdge, which makes inverters for solar systems as well as residential and commercial battery systems, is also facing rising battery competition in the U.S. from Tesla.”

12. Paylocity Holding Corp (NASDAQ:PCTY)

Number of Hedge Fund Investors: 34

Financial software solutions company Paylocity Holding Corp (NASDAQ:PCTY) shares are down 16% over the past one year. In November, UBS started covering Paylocity Holding Corp (NASDAQ:PCTY) with a Buy rating and a $160 price target.

A total of 34 hedge funds out of the 910 hedge funds tracked by Insider Monkey had stakes in Paylocity Holding Corp (NASDAQ:PCTY). The biggest hedge fund stakeholder of Paylocity Holding Corp (NASDAQ:PCTY) was Greg Poole’s Echo Street Capital Management which owns a $197 million stake in Paylocity Holding Corp (NASDAQ:PCTY).

In addition to Paylocity, hedge funds also like Microsoft Corp (NASDAQ:MSFT), Alphabet Inc Class C (NASDAQ:GOOG) and Adobe Inc (NASDAQ:ADBE).

11. Shockwave Medical Inc (NASDAQ:SWAV)

Number of Hedge Fund Investors: 34

Shockwave Medical Inc (NASDAQ:SWAV) ranks 11th in our list of the best high-growth NASDAQ stocks to buy according to smart money investors. According to Shockwave Medical Inc’s (NASDAQ:SWAV) third quarter results published in November, Shockwave Medical Inc’s (NASDAQ:SWAV) adjusted EPS in the period came in at $0.92, surpassing estimates by $0.12. Revenue in the quarter jumped 41.6% year over year to $186.02 million, beating estimates by $1.3 million.

TimesSquare Capital U.S. Mid Cap Growth Strategy made the following comment about Shockwave Medical, Inc. (NASDAQ:SWAV) in its Q3 2023 investor letter:

“Our preference within Health Care is for novel therapies to address unmet medical needs, specialized providers, and innovators. We also added Shockwave Medical, Inc. (NASDAQ:SWAV), a medical devices company that uses intravascular lithotripsy technology for treating calcified plaque in patients suffering from coronary diseases. The company is well positioned and continues to expand their product offerings. It appears the stock has been caught up in the market’s medical technology unwind.”

10. Celsius Holdings, Inc. (NASDAQ:CELH)

Number of Hedge Fund Investors: 35

Beverage company Celsius Holdings, Inc. (NASDAQ:CELH) ranks 10th in our list of the best high-growth NASDAQ stocks to invest in according to smart money investors. In November, Jefferies started covering the stock with a Buy rating, citing Celsius Holdings, Inc.’s (NASDAQ:CELH) potential for significant growth and its distribution arrangement with PepsiCo (PEP). Jefferies set a $217 price target on the stock. Wall Street analysts are also bullish on Celsius Holdings, Inc. (NASDAQ:CELH) amid its international expansion.

Immersion Investment Partners made the following comment about Celsius Holdings, Inc. (NASDAQ:CELH) in its Q3 2023 investor letter:

“Celsius Holdings, Inc. (NASDAQ:CELH) – Doubted Champion) is the owner of the Celsius brand of energy drinks. Celsius has been a day 1 holding of the partnership and through organic appreciation, coupled with our significant reduction of Basic-Fit shares at the beginning of the third quarter (discussed in the second quarter letter), has grown to become the number 2 position over the last six months. Despite a tremendous runup in shares over the past several years, we think Celsius remains underappreciated and undervalued.

Based on latest scanner data, Celsius holds a roughly 6% share of the U.S. energy market over the last twelve months, making it #3 behind Monster and Red Bull. We believe Celsius can continue to grow and become a significantly larger business for several key reasons… a. Celsius holds a 20%+ share on Amazon and major Florida markets (Miami, Orlando, and Tampa), its most mature markets, and nearly 20% share in New York and Boston. These analogues provide solid evidence that Celsius is capable of being significantly larger than it is today…” (Click here to read the full text)

9. Medpace Holdings Inc (NASDAQ:MEDP)

Number of Hedge Fund Investors: 36

Clinical research company Medpace Holdings Inc (NASDAQ:MEDP) ranks 9th in our list of the best high-growth NADSAQ stocks to buy according to smart money investors.

During the third quarter, Medpace Holdings Inc (NASDAQ:MEDP) revenue jumped about 28.4% year over year to $492.5 million, surpassing estimates by $16.74 million.

A total of 36 hedge funds out of the 910 funds tracked by Insider Monkey had stakes in Medpace Holdings Inc (NASDAQ:MEDP). The biggest stakeholder of Medpace Holdings Inc (NASDAQ:MEDP) was John Overdeck and David Siegel’s Two Sigma Advisors which owns a $45 million stake in Medpace Holdings Inc (NASDAQ:MEDP).

8. Insulet Corporation (NASDAQ:PODD)

Number of Hedge Fund Investors: 44

Insulin delivery systems company Insulet Corporation (NASDAQ:PODD) stock jumped in November after Insulet Corporation (NASDAQ:PODD) posted strong Q3 results. The results showed improved sales of its Omnipod insulin pumps. During the quarter, adjusted EPS came in at $0.71, beating estimates by $0.30. Revenue in the period increased by about 27% year over year to $432.7 million, beating estimates by $18.5 million.

For 2023, Insulet Corporation (NASDAQ:PODD) was expecting its sales to increase 26% to 27%, up from its prior forecast of 22% to 25%.

As of the end of the third quarter of 2023, 44 hedge funds tracked by Insider Monkey had stakes in Insulet Corporation (NASDAQ:PODD). The most significant stakeholder of Insulet Corporation (NASDAQ:PODD) was Daniel Sundheim’s D1 Capital Partners which owns a $290 million stake in Insulet Corporation (NASDAQ:PODD).

Carillon Scout Mid Cap Fund made the following comment about Insulet Corporation (NASDAQ:PODD) in its Q3 2023 investor letter:

“Insulet Corporation (NASDAQ:PODD), the diabetes management device company, was the second largest detractor to portfolio performance. The company was hit by negative sentiment regarding GLP-1 agonists and their potential to reduce the number of type 2 diabetics on insulin therapy. Type 1 diabetes has become increasingly prevalent, which could offset the lower outlook for cases of type 2 diabetes, but the market ignored this development.”

7. Lantheus Holdings Inc (NASDAQ:LNTH)

Number of Hedge Fund Investors: 44

Diagnostic and therapeutic products company Lantheus Holdings Inc (NASDAQ:LNTH) is one of the best high-growth NSADAQ stocks to invest in according to smart money investors.

In November Lantheus Holdings Inc (NASDAQ:LNTH) posted third quarter results. Adjusted EPS in the quarter came in at $1.47, surpassing estimates by $0.15. Revenue in the period increased by about 33.7% year over year to $319.9 million, beating estimates by $5.48 million.

ClearBridge Small Cap Growth Strategy made the following comment about Lantheus Holdings, Inc. (NASDAQ:LNTH) in its Q3 2023 investor letter:

“We also made an investment in Lantheus Holdings, Inc. (NASDAQ:LNTH), which offers a portfolio of diagnostic health care products, primarily serving the complex nuclear imaging market. The company also has a pipeline of disruptive nuclear therapeutics (radiopharmaceuticals), creating a unique combination of strong profitability and cash flow generation with attractive growth opportunities in pipeline and existing products. The operational and logistical challenges of operating in nuclear medicine provide Lantheus a durable moat in this emerging therapeutic market.”

6. First Citizens BancShares Inc (Delaware) Class A (NASDAQ:FCNCA)

Number of Hedge Fund Investors: 46

First Citizens BancShares Inc (Delaware) Class A (NASDAQ:FCNCA) revenue in the third quarter increased by about 111% year over year. In October, First Citizens BancShares Inc (Delaware) Class A (NASDAQ:FCNCA) increased its dividend by a massive 118%.

A total of 46 hedge funds out of the 910 funds tracked by Insider Monkey had stakes in First Citizens BancShares Inc (Delaware) Class A (NASDAQ:FCNCA).

In addition to FCNCA, hedge funds are also buying Microsoft Corp (NASDAQ:MSFT), Alphabet Inc Class C (NASDAQ:GOOG) and Adobe Inc (NASDAQ:ADBE).

Gator Capital Management made the following comment about First Citizens BancShares, Inc. (NASDAQ:FCNCA) in its Q3 2023 investor letter:

“The Fund’s largest position is First Citizens BancShares, Inc. (NASDAQ:FCNCA) (“First Citizens” or “FCNCA”). We acquired our stake over the past three years. Initially, we owned and traded around a small position in CIT Group Inc. (“CIT”) during the summer of 2020. We felt CIT was undervalued and management was making progress in reducing risk during the Covid-19 pandemic. In late 2020, CIT agreed to be acquired by First Citizens. We added to our CIT stake the morning of the acquisition announcement because we thought the acquisition was so financially attractive that First Citizens’ shares would rally and pull CIT’s shares higher. Our CIT shares were exchanged for First Citizens shares when the merger completed. We held onto our First Citizens shares because we admired the management team, we felt the bank was undervalued, and we projected the bank would benefit from higher interest rates. Then, earlier this year, First Citizens was the winning bidder in the FDIC’s auction of the failed Silicon Valley Bank (“SVB”). We added significantly to the Fund’s First Citizens position on the following Monday morning because the deal was unbelievably favorable for First Citizens.

First Citizens’s stock price rose more than 50% that day and has risen another 40% in the months since the SVB acquisition. We have not sold any shares. We believe the stock still has the potential to double over the next three years. Despite this attractive upside, we think the downside is minimal. Our downside scenario is an unchanged stock price in three years…” (Click here to read the full text)

Click to continue reading and see the 5 High Growth NASDAQ Stocks That Are Profitable.

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Disclosure. None. 14 High Growth NASDAQ Stocks That Are Profitable was initially published on Insider Monkey.

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AI Fire Sale: Insider Monkey’s #1 AI Stock Pick Is On A Steep Discount

Published on May 1, 2024 at by Inan Dogan, PhD

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A New Dawn is Coming to U.S. Stocks

Published on May 2, 2024 at by Insider Monkey Staff

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