We recently published a list of 12 Best Performing Cheap Stocks in 2024. In this article, we are going to take a look at where QuantaSing Group Limited (NASDAQ:QSG) stands against other best performing cheap stocks in 2024.
As we step into the final quarter of 2024, the financial markets continue to navigate a complex terrain shaped by a mix of optimism and uncertainty. The latest jobs report for September came in stronger than expected, signaling resilience in the U.S. labor market and leading many investors to reassess their expectations regarding the Federal Reserve’s monetary policy. This report has led traders to largely eliminate the possibility of a more significant rate cut, now forecasting an 87% chance of a quarter-point reduction in the near future. Despite these concerns, analysts are generally optimistic about the broader market’s prospects as we head towards year-end, thanks to promising earnings growth and stabilizing economic indicators.
Goldman Sachs, one of the leading voices on Wall Street, recently revised its target for a major stock market index upward, projecting that the index will reach 6,000 by the end of 2024. This forecast implies a 4.3% upside from current levels and reflects the bank’s confidence in sustained earnings growth throughout the remainder of the year. The bank also sees a longer-term target of 6,300 for the index, which would represent a 9.5% gain over the next 12 months. Chief U.S. equity strategist David Kostin noted that despite near-term volatility, factors like a recovery in the semiconductor cycle and easing cost pressures are likely to boost margins across multiple sectors. Such bullish sentiment suggests that investors looking for value opportunities might find them in underperforming but fundamentally sound sectors.
One area that stands out in terms of valuations and future potential is the biopharmaceutical industry. Experts like Karen Firestone, a seasoned investor and regular contributor to CNBC, highlight that despite the sector’s recent struggles, it presents an attractive entry point for long-term investors. Large pharmaceutical companies are trading at lower price-to-earnings ratios compared to the broader market, offering robust profit margins and potential for AI-driven breakthroughs in drug development. While some big names have rallied on the back of their blockbuster obesity drugs, the broader biopharma sector remains relatively undervalued.
This favorable setup is not confined to biopharma alone. The technology and consumer discretionary sectors, which were hit hard earlier this year, are also starting to show signs of life. According to FactSet, analysts expect the major stock index to post its fifth consecutive quarter of earnings growth in the third quarter, projecting a 4.2% expansion year-over-year. This suggests that sectors with solid growth fundamentals could outperform as economic conditions stabilize. At the same time, energy stocks, particularly those within the communication services sector, have received a higher percentage of “buy” ratings, reflecting optimism around their capacity to deliver gains in the coming months.
While there’s a lot of chatter around high-growth sectors, value investors are eyeing cheap stocks that have managed to deliver impressive returns. The biopharmaceutical sector is a case in point, where low valuations, high margins, and the potential integration of AI into drug discovery make it a compelling area for investment. Analysts suggest that companies with robust balance sheets and pricing power are best positioned to withstand potential economic headwinds and capitalize on emerging growth opportunities.
In addition, some strategists believe that broader market gains could extend beyond 2024, particularly if the Federal Reserve manages to engineer a “soft landing” by controlling inflation without triggering a recession. With the presidential election looming in 2025, historical data shows that major stock indices tend to perform well during election years, further supporting a cautiously optimistic outlook for equities.
Given these dynamics, it’s evident that while the market landscape is marked by volatility and economic uncertainties, there are still promising opportunities to be found. In the following sections, we delve into 12 of the best-performing cheap stocks of 2024, which have outpaced broader market indices and offer attractive entry points for investors looking to navigate these uncertain times with a focus on long-term gains.
Our Methodology
For this article, we used Finviz stock screener to look for companies having forward Price to Earnings (P/E) ratio of less than 15. We then selected the top 12 stocks with the best year-to-date performance. Additionally, we reviewed data from approximately 912 elite hedge funds tracked by Insider Monkey during the second quarter of 2024 to determine hedge fund ownership for each company. The stocks are ranked in ascending order of their year-to-date performance.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
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QuantaSing Group Limited (NASDAQ:QSG)
Number of Hedge Fund Holders: 2
Year to date Share Price Gain: 155.77%
Forward Price to Earnings (P/E) Ratio: 8.17
QuantaSing Group Limited (NASDAQ:QSG), headquartered in Beijing, was founded in 2019 and operates through two primary segments: Learning Service and Consumer Business. QuantaSing offers a variety of online courses aimed at enhancing financial literacy, skills upgrading, and leisure activities for adult learners under several brands such as QiNiu, JiangZhen, and QianChi. The company’s adaptability and evolving business model have positioned it for continued success, making it a strong candidate for investors looking at affordable yet promising stocks in 2024.
In the fourth quarter of fiscal year 2024, QuantaSing Group Limited (NASDAQ:QSG) posted solid financial results, demonstrating its potential for long-term growth. The company achieved total revenues of RMB 1,000.1 million, representing a year-over-year increase of 20.7%, primarily driven by its skill-enhancing courses. More importantly, the adjusted net income reached a historical high of RMB 193.6 million, a substantial improvement from RMB 90.4 million in the same period last year. This robust financial performance underscores the effectiveness of QuantaSing Group Limited (NASDAQ:QSG) strategic focus on adult learning and its transition to serving the growing needs of China’s silver economy.
QuantaSing Group Limited (NASDAQ:QSG) pivot towards the silver economy, which encompasses services tailored to the elderly population, is a significant driver of its future growth. The silver economy in China, valued at RMB 14.4 trillion in 2023, presents a vast market opportunity, which QuantaSing is well-positioned to capitalize on. The company’s offerings, including health and wellness courses, traditional Chinese medicine, and cultural activities, cater to the unique needs of the aging population. Additionally, its innovative offline initiatives, such as study tours and wellness programs, have helped increase user engagement and retention, contributing to the company’s expanding user base of 137.6 million registered users.
Furthermore, QuantaSing Group Limited (NASDAQ:QSG) strong liquidity position, with cash and cash equivalents totaling RMB 1,026.3 million as of June 30, 2024, provides it with the financial flexibility to invest in its strategic initiatives. The company’s ability to grow revenue and maintain a healthy balance sheet makes it a compelling investment opportunity among cheap stocks in 2024.
Overall, QSG ranks 9th on our list of best performing cheap stocks in 2024. While we acknowledge the potential of QSG to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than QSG but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.