4 Unrivaled Growth Stocks You’ll Regret Buying in 2024

In about three weeks, the curtain will close and another year will be on Wall Street’s books. It has been a very meaningful year for growth stock investors. Driving innovation after losing 33% of its value in the 2022 bear market Nasdaq Composite It rose 35% as of the closing price on December 6th.

Despite this rally, there are still plenty of bargains for opportunistic investors willing to look for them. The previously mentioned Nasdaq Composite Index remains 12% below its all-time high set in November 2021. This means you can still buy a game-changing company with a bright future at a discount.

Here are four unmatched growth stocks you’ll regret not buying in 2024.

Image source: Getty Images.

MasterCard

The unrivaled growth stock to buy first in the new year is Payment King. MasterCard (mom -0.24%). Despite transactions near record highs, Mastercard’s payment facilitation operations showed no signs of slowing down.

The biggest ‘fear’ of financial stocks is the U.S. economic recession. Most financial stocks are cyclical and suffer when the U.S. economy contracts. Because Mastercard’s operating model is based on fees generated by merchants, a slowdown in business and consumer spending is expected to have a negative impact on the company.

But there are two sides to this story. Recessions are a completely normal part of the economic cycle, but they don’t last long. Of the 12 recessions since World War II, only three lasted longer than 12 months, and none of the other three lasted longer than 18 months. In comparison, there have been several expansion periods lasting between 4 and 12 years. Mastercard is much more likely to benefit from economic growth than to defend itself during a downturn.

To add to this point, Mastercard’s management team has ensured that the company focuses solely on facilitating payments. Although some of its payment processing peers also act as lenders, Mastercard relies on merchant fees to boost sales and profits. The advantage of loan avoidance is that Mastercard does not have to set aside capital to cover loan losses during a recession. This is key to the company maintaining profit margins above 40%.

Geographically, Mastercard has a long growth runway ahead. In addition to becoming #2 in market share in the United States (the world’s #1 market for consumer spending), we will be able to organically expand our payments infrastructure into fast-growing but underbanked regions such as the Middle East, Africa, and Asia. Southeast Asia.

Fiverr International

The second unparalleled growth stock you’ll regret not adding to your portfolio before it opens in 2024 is an online services marketplace. Fiverr International (FVRR 0.64%).

Like Mastercard, the most significant potential headwind for Fiverr would be a recession. It’s common to see unemployment rise when the U.S. economy contracts, but that’s not good news for companies that use online marketplaces to connect freelancers with businesses.

But what makes Fiverr special are three competitive advantages: The first is the permanent changes we have seen in the labor market since the COVID-19 pandemic. Some employees have returned to the office, but more people than ever are working remotely. The mobile workforce directly leverages Fiverr’s freelancer-centric operating model.

Second, Fiverr’s online marketplace does an excellent job of differentiating itself from its competitors. While most competing platforms allow freelancers to price their services by the hour, Fiverr’s freelancers price their work by paying for it in full. Fiverr’s pricing transparency is clearly having an impact on the business, as evidenced by the fact that spending per buyer has steadily increased over the years.

But Fiverr’s biggest selling point is its take rate, which is the retention rate of each transaction negotiated on the platform, including commissions. While most online service marketplaces have take rates in the mid-teens, Fiverr recorded a consistently expanding take rate of 31.3% in the third quarter. This means that Fiverr generates significantly more revenue from users than its competitors while still growing its base of freelancers and buyers.

Image source: Getty Images.

JD.com

The third surprising growth stock you’ll regret not adding to your portfolio in 2024 is a China-based e-commerce company. JD.com (J.D. -1.78%).

Regulatory uncertainty tends to be the biggest headache for Chinese stocks. Chinese regulators crack down Alibaba, the country’s No. 1 e-commerce company, will be fined $2.75 billion in 2021. U.S. regulators have also threatened to remove China-based stocks from U.S. exchanges unless they are granted access to at least three years of audited financial statements. This is a real concern, but JD.com has largely avoided such scrutiny.

The first thing that works in JD’s favor is that China abandoned its strict zero-COVID mitigation strategy in December 2022. After nearly three years of unpredictable lockdowns that paralyzed supply chains, China’s economy is slowly but steadily reopening and growing. In the world’s second-largest economy by gross domestic product (GDP), e-commerce is still in its infancy and offers a long runway for continued growth.

Perhaps more importantly, JD.com models its business similarly to: Amazon. While Alibaba generates a significant portion of its revenue from third-party suppliers selling products in online marketplaces, JD is primarily a direct-to-consumer retailer that handles inventory and logistics. The latter approach allows JD to pull levers and control costs better than Alibaba.

JD also plans to spin off its industrial and real estate divisions and list each division on the Hong Kong Stock Exchange. Spinoffs tend to unlock shareholder value by making it easier to understand how a company grows and makes money.

walt disney

The fourth peerless growth stock you’ll regret not buying in 2024 is media stocks walt disney (DIS 0.84%).

The COVID-19 pandemic has greatly disrupted Disney’s theme parks and movie operations. The company’s stock price has been under pressure recently due to large operating losses related to its streaming segment. While these losses have not been noticeable so far, there are some clear reasons why opportunistic investors are buying Walt Disney stock in the new year.

The number one reason to buy Disney stock is the company’s irreplaceability. There are other movie studios, content creators and theme parks, but none are as successful as Disney at engaging people and creating emotional attachments. Disney rarely struggles for long periods of time because it can rely on its unrivaled storytelling and unique characters.

In addition to the above, Walt Disney’s ability to connect with people of all ages has given it superior pricing power. Since Disneyland opened in Southern California in 1955, ticket prices have risen more than 10,000%. This is 10 times the U.S. inflation rate over the past 68 years. Consumers are willing to pay more for the experiences Disney offers, and that’s traditionally a win for investors.

Walt Disney is also making significant progress toward profitability in its streaming segment. A combination of careful cost cutting and increased monthly subscription fees could allow Disney’s streaming services segment to first become profitable by the fourth quarter of fiscal 2024 (Disney’s fiscal year ends in September 2024).