With 2024 here, many investors are trying to pinpoint which stocks will have strong years. With how great 2023 was, there is a bit of exuberance in the market, and some stocks are highly valued. However, I've pinpointed three stocks with plenty of upside in 2024 without the premium price tag.
So if you're looking for some stocks with plenty of potential, add these to your list.
Taiwan Semiconductor
Taiwan Semiconductor (TSM 1.26%) is the world's largest contract chip manufacturer. That means it supplies the chips to tech giants such as Nvidia, Apple, and AMD. As a result, TSMC will benefit from the increased demand for artificial intelligence (AI) chips. Management believes that AI chips will rise from mid-single-digit percentage revenue share to the mid-teens in just five years.
Furthermore, the chip downturn Taiwan Semiconductor experienced in 2023 is nearly complete. After a chip shortage in 2020 and 2021, falling consumer demand caused many of TSMC's clients to have an oversupply of chips. Fortunately, management expects this trend to bottom in 2024, which will usher in a new era of growth.
Over the past five years, Taiwan Semiconductor has traded for about 23 times earnings, on average. However, it trades for less than 17 times 2024 earnings, making it a bargain compared with historical levels.
With Wall Street analysts expecting TSMC's revenue to rise by nearly 20% in 2024, it's a candidate for a strong breakout in 2024.
Procore
Procore (PCOR 0.39%) is your chance to rewind the clock and capitalize on the rise of some of the best software-as-a-service (SaaS) companies, such as Salesforce and Adobe. A few years ago, the technological infrastructure didn't exist to support the internet at construction sites, so everything had to be done manually with pencil and paper. That would cause multiple communication issues, as a project owner may want to change something, which could take weeks to flow down through the various contractors.
But Procore's construction management software creates a single point of truth from which everyone works. This solution avoids costly reworks, cutting down on project delays and unplanned spending that exceeds budget.
By investing in Procore now, you're taking the knowledge of a transformation that has already happened in almost every corner of the business world and extrapolating that success to the construction industry, which now has the resources available to make it possible.
Procore has achieved healthy growth throughout its time on the public markets, and its 33% growth in Q3 was no exception. Despite its rock-solid business plan and excellent growth, the stock trades for just 11 times sales.
PCOR PS Ratio data by YCharts
This is an excellent company to get into before other investors follow suit. I think Procore has the potential to be a top-performing stock not only in 2024 but also in the next decade.
dLocal
Many companies have created large businesses off the headaches of other companies. dLocal (DLO 0.56%) is no different; the Uruguay-based company gives businesses the tools they need to reach emerging-market countries such as India, Egypt, Turkey, and Peru. Most of these countries don't have an extensive credit card network like the U.S. has. Even if they do have a network, it's not with the same providers the companies are used to. With dLocal's solutions, a company can easily expand into these countries for a small slice of revenue it pays to dLocal.
This solution makes selling in these countries much more economical than if clients all developed a payment solution for themselves. Having customers including Amazon, Shopify, Spotify, and Nike among its client list shows how useful dLocal's products are to companies that want to expand globally.
dLocal is also growing like a weed, with third-quarter total processed volume rising 69% to $4.6 billion and revenue increasing 47% to $164 million. It's also net profitable, and it reported a 25% profit margin in Q3.
Despite this success, dLocal trades for less than 23 times 2024 estimated earnings, making it a bargain buy right now. dLocal is a company few have heard of, but if you get in before others do, you'll have a chance to significantly outperform the market.
