It is a good idea to look back at the previous year’s biggest winners to see what you missed, understand what is moving, and see if it all makes sense. 2024 was a year of speculative growth stocks. Few have earnings, track records, or moats. All have huge potential, most are first movers. They are also expensive and many have seen their biggest move in the fourth quarter. There are none that I would buy at this price and plenty I would buy on a selloff.
The top five best-performing stocks in 2024 as listed by Bespoke were:
GeneDX (WGS) provides advanced genetic testing and analysis to support precision medicine and healthcare solutions. It was up 2,684%. WGS is currently losing money and has a price-to-sales. (P/S) ratio of about 8.
Rigetti Computing (RGTI) is a company that rode the quantum wave. They make quantum computing systems. It was up 1,626%. RGTI has no earnings, is burning through $60 million a year, and has $92 million in cash. The market cap is $4.2 billion.
Sezzle (SEZL) is a company that offers financing solutions for e-commerce platforms and retailers. It was up 1,142%. SEZL is worth $1.4 billion in market cap and has a trailing PE of 27. The company saw revenue grow 77% and earnings grow over 1000% year over year. They trade 6.81 times sales.
Dave (DAVE) created a personal finance app that helps users manage their money and build credit. Dave was up 1,026% in 2024. Dave has a $1.1 billion market cap, a forward PE of 17, and 40% revenue growth. EBITA was at $18 million.
SoundHound AI (SOUN) develops AI-powered voice recognition and conversational intelligence solutions for businesses. The company did a moonshot over the past few months and is up 969% for the year.
SoundHound trades at 90 times sales and is undoubtedly expensive. The potential is that some company like McDonalds will roll out their product in all drive-throughs, in which case, the sky is the limit.
SOUN currently has a market cap of $7.47 billion. The risk is that some gorilla like Microsoft (MSFT), Oracle (ORCL) or Google ( GOOGL) will simply announce they have the same product and render them useless. Think about Slack versus Teams.
Our Picks
Of the top 20 best-performing stocks last year, my cut brother, Brit Ryle recommended two of them.
The first was NuScale Power (SMR) which rode the nuclear wave. They develop modular nuclear reactor technology. It was up 453% this year.
The second winner was Rocket Lab (RKLB), a company that makes rockets and launches small satellites into space. Rocket Lab was up 375% this year.
And, yours truly got two picks in the top 20. I recommended MicroStrategy (MSTR) based on the Bitcoin halving phenomenon. MSTR is an old tech company that leveraged its shares to buy as much Bitcoin as possible. It ended the year up 379% though we sold half for 716% gains at the top.
MSTR has a forward PE of over 4,000 but it doesn’t matter because it all has to do with how Bitcoin trades.
My second winner was Palantir (PLTR), up 349% for the year. Palantir is a data analytics company that uses AI for government and enterprise use. This stock is greatly overvalued and should be avoided at all costs. They have a trailing PE of 378 and a profit margin of 18%.
All the best,
Christian DeHaemer
Outsider Club
Brits Bulls:
https://www.outsiderclub.com/beware-wall-st-bulls/
Let the Hate Flow Through You:
https://www.outsiderclub.com/a-contrarian-dream-stock/
Why Am I So Fat in the Middle Now:
https://www.outsiderclub.com/the-next-crisis/
