In the stock market, certain gems often lurk in the shadows, awaiting discovery by savvy investors. As the market enters 2024, three under-the-radar stocks to buy are poised to break free from obscurity and soar to new heights. These companies, spanning the energy, technology and precious metals sectors, are not merely sleeping giants but strategic players with untapped potential.
The first one’s recent conversion to a corporation and strategic acquisition of royalty acreage in the Permian Basin set the stage for unprecedented growth. Meanwhile, the second one’s focus on AI integration and a transformative merger with Webhelp, position it as an industry innovator. On the other hand, the third one’s focus on exploration and operational excellence showcases its prowess in the precious metals arena.
Read more to explore key factors driving the ascent of these sleeper stocks, offering a chance to ride the wave of their potential value growth.
Viper Energy (VNOM)
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Viper Energy’s (NASDAQ:VNOM) rapid growth potential may be supported by conversion to a corporation and increased index fund ownership. The Board of Directors approved the conversion of Viper Energy on November 2, effective November 13. The conversion is expected to deliver increased corporate governance rights to limited partners. It is anticipated to lead to an increase in Viper’s trading liquidity and potential investor universe.
Currently, approximately 2% of Viper’s public float is held by index funds, which is significantly lower than a select group of peers averaging around 30% ownership. The company expects to be eligible for inclusion in major indices such as those managed by Vanguard, S&P and Russell, which could result in a substantial increase in ownership by index funds. That strategic move aligns to expand exposure and attract more institutional investors.
On the other hand, GRP assets and expansion of royalty acquisition will also serve as fundamental strengths. Viper recently closed the GRP acquisition, representing a unique opportunity that aligns with the company’s acquisition criteria. The move checked all the necessary boxes, including accretive to relevant financial metrics. That offers substantial undeveloped inventory for long-term returns and a significant scale.
Strategically, the GRP acquisition has increased Viper’s net royalty acres in the Permian Basin to approximately 32K, with production exceeding 25K barrels of oil per day. That expansion positions Viper as the largest player in the public minerals market, contributing to an unparalleled growth runway.
Finally, the quantity and quality of undeveloped inventory, particularly in the Northern Midland Basin, differentiate the GRP acquisition. Hence, this acquisition supports Viper’s role in consolidating the highly fragmented space and highlights the potential for further growth in the mineral market.
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Concentrix’s (NASDAQ:CNXC) focus on technology-infused services, and AI integration is a crucial aspect of its growth strategy. The company experienced sequential quarterly revenue growth with its digital CX solutions. That suggests the company’s capability to adapt. There is an internal deployment of AI solutions for recruiting, workforce management, smart assist products and quality automation platforms. That suggests Concentrix’s edge in operational efficiency. These AI implementations streamline processes and improve utilization, user experience and effectiveness.
Additionally, Concentrix is actively collaborating with clients to design, build and run generative AI solutions. The company has led in AI, such as achieving 35% efficiency gains and delivering releases 30% faster for a technology client, suggesting a favorable impact of its AI initiatives. Thus, these client-facing AI solutions position Concentrix as an innovative partner in technology-driven transformations.
Furthermore, AI is used in learning bot simulations, AI-based quality automation platforms and cognitive AI bots for client-specific implementations. It reflects Concentrix’s adaptability and responsiveness to industry trends. The company focuses on deploying AI tools across a significant portion of its legacy operations business by year-end, demonstrating a proactive stance toward technology adoption.
On the other hand, the combination with Webhelp is presented as a strategic milestone in Concentrix’s industry. The strategic advantages gained from this combination are expected to drive leadership as a transformative force. The acquisition will bring new expertise, expand the global footprint and reinforce Concentrix’s focus on a supportive and inclusive workforce.
Overall, Concentrix anticipates positive financial returns from the Webhelp combination. These include enhanced revenue growth, profitability and non-GAAP EPS accretion within the first 12 months. There is an expectation of double-digit accretion in the second year. Finally, there may be a realization of cost synergies amounting to $120 million by the third year, highlighting the combination’s financial strength and strategic benefits.
SilverCrest Metals (SILV)
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Focus on growth and exploration provides a fundamental edge to SilverCrest Metals (NYSEAMERICAN:SILV). The allocation of a $10 million exploration budget for Las Chispas reflects the company’s focus on continued growth through exploration. That budget is a strategic investment in converting existing resources into reserves and discovering new mineral ounces, ensuring a sustainable pipeline of valuable assets.
Additionally, SilverCrest Metals actively manages a bullion position, increasing it by $6.1 million in Q3 2023. Using an option strategy to manage risks associated with bullion positions highlights the company’s focus on strategic financial management. Hence, the company targets superior yields while increasing exposure to gold and silver.
Moving on to mining and development rates, there is an increase in underground mining to slightly over 900 metric tons per day, reflecting operational efficiency and successful resource extraction. The adherence to the planned lateral development rate of 34 meters per day underscores the company’s ability to meet production targets.
Further, the Las Chispas plant’s exceeding the expected daily throughput of 1,245 metric tons showcases operational excellence. Similarly, metallurgical recovery remaining solid at approximately 98% for gold and silver indicates a high-efficiency level in mineral processing operations. Also, the average all-in-sustaining cost (ASIC) per ounce of $12.23 per quarter compares favorably to annual guidance. Therefore, managing costs efficiently contributes to maintaining healthy profit margins and financial sustainability.
Finally, strategic stockpile use as a significant contributor to plant feed is prudent, especially as the mine is gradually developed. The expected continuation of this benefit through 2025 ensures a stable and consistent resource feed to the processing plant.
On the date of publication, Yiannis Zourmpanos did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Yiannis Zourmpanos is the founder of Yiazou Capital Research, a stock-market research platform designed to elevate the due diligence process through in-depth business analysis.
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