By Yiannis Zourmpanos, Investor Place, Trades Of The Day, 2024-06-25
With the stock market rising, picking the top stocks at 52-week lows is important for those looking for growth opportunities. Currently, three businesses in this category stand out thanks to their strategic ambitions and financial performance in response to changing macroeconomic conditions and market needs.
Gaining insight into the factors propelling these businesses is beneficial in assessing their investment prospects. With a solid digital sales platform, all three of these businesses have transformed their operations and generated significant revenue from online purchases.
The companies are also using smart events to dramatically increase advertising income by leveraging the value of premium content. They can grow their member base and product offerings while maintaining a solid financial position and employing creative marketing techniques.
Here, the core competencies of each business are examined, along with their distinct strategies for expansion and financial success. Understanding these characteristics may help investors, whether seasoned or novices, make wise investment decisions, such as purchasing stocks at 52-week lows to benefit from quick capital growth.
Yum China (YUMC)
Yum China (NYSE:YUMC) is a leading restaurant company in China. Digital ordering makes up over 89% of its sales and is the core growth engine for the business. Thirty-eight percent of sales at KFC and Pizza Hut derived from the 12% annual growth in delivery sales.
Yum's rising sales and improved operating efficiency result from China's effective delivery network and robust digital presence, which take advantage of changing customer preferences. With 485 million members overall, using member sales to boost system-wide income increases recurring business and customer loyalty.
Further, Yum China responds to evolving consumer preferences, such as the growing need for more premium and smaller, more economical meal alternatives.
Introducing both premium and affordable items, such as KFC's pineapple beef burger and Pizza Hut's reasonably priced pizzas, caters to a wide range of consumer tastes and increases sales in many market groups. Yum China also customizes menus and shop formats to local tastes.
Yum China's inclusion on this list of top stocks at 52-week lows is led by its robust digital sales growth and strategic expansion into new product categories.
Paramount (PARA)
Paramount (NASDAQ:PARA) is a media and entertainment giant. Strategic events like Super Bowl LVIII helped Paramount's advertising revenue increase 17% in the first quarter 2024. TV media advertising revenue increase by 14% and the Super Bowl was a major factor, contributing 23% to this growth.
Sports programming also made positive contributions. These include college basketball from the National Collegiate Athletic Association and the National Football League playoffs.
Additionally, direct-to-consumer advertising increased by 31%. It was propelled by Pluto TV and Paramount+, and further supported by the effects of Super Bowl LVIII. Indeed, this expansion demonstrates the edge of multi-platform advertising approaches and the appeal of the content offered to marketers.
In Q1 2024, Paramount Global produced $209 million in free cash flow, a solid increase of over $750 million over Q1 2023. PARA earns its spot on this list of top stocks at 52-week lows ldue to its solid advertising revenue growth, debt reduction and improved free cash flow.
SoFi (SOFI)
SoFi (NASDAQ:SOFI) operates in the digital financial services sector. The corporation increased its tangible book value for the seventh consecutive quarter by $608 million to $4.1 billion. This expansion demonstrates its sound financial standing and capacity for more growth.
The overall capital ratio increased by 2% from the previous quarter to 17.3% in Q1 2024, well beyond the requirement of 10.5%. This improved financial position offers a strong base for expansion and risk control.
In Q1 2024, the firm added 8.1 million new members. With 622,000 new members in the last quarter alone, this is a significant 44% growth over the prior year. Members' use of new products has increased significantly. During the quarter, there were 989,000 new product additions. Significantly, the financial services sector accounted for 93% of these additions, demonstrating good cross-selling skills and strengthening member relationships.
In short, SoFi's presence on the top stocks at 52-week lows list is supported by its robust financial health. This is reflected in consecutive growth in tangible book value and a substantial increase in its member base.
— Yiannis Zourmpanos
Source: Investor Place
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