Stocks to buy

3 Top Stocks to Buy This Winter for Sizzling Summer Gains

The Bulls are back in charge on Wall Street. Major stock indices like the S&P 500 and Dow have powered to new highs recently, with the tech-heavy Nasdaq poised to follow. After months of solid job growth, strong consumer spending, and GDP expansion, we may be on the cusp of a new bull market. Add in impending Fed rate cuts to keep inflation around target and stoke even more economic growth, and we have the ingredients for stocks to continue sizzling.

That’s why now is the time to do some shopping for stocks that could really pay off by summer, if current trends persist. I’m looking for fundamentally-sound companies that haven’t yet seen their share prices catch up to their underlying performance. Snap these stocks up while they’re still bargains, and you could be sitting on some nice gains when beach season rolls around. Here are three to consider right now.

GigaCloud Technology (GCT)

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GigaCloud Technology (NASDAQ:GCT) is up nearly 50% since I last recommended it in December, but I believe there’s ample upside left. At current valuations, the stock remains a steal compared to its growth and profitability.

GigaCloud helps businesses buy, sell, ship, store, and deliver products globally through its AI and cloud-based solutions. And while most consumer discretionary companies have seen declining financials, GigaCloud has stayed profitable since 2019 with steady revenue growth and a positive outlook.

As a facilitator rather than a direct retailer, the company is poised to see its growth accelerate in the current environment. Analysts estimate nearly 40% revenue growth ahead in 2023 and 32% in 2024. The company’s earnings per share are also expected to climb 50% over the 2023-2025 time frame. And with room for the company to expand its product line beyond furniture, I think even stronger growth is attainable.

With industry-leading 13.6% net margins, earnings continuing to plow through estimates (beat by a whopping 55% last quarter), and revenue also outpacing estimates, GigaCloud continues to outperform. I believe with easier macro conditions, this outperformance will persist.

SurgePays (SURG)

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SurgePays (NASDAQ:SURG) has yet to truly surge, but stellar financials and immense growth runway make me bullish on its prospects in the coming months.

The fintech space has struggled in recent years, explaining its lag. However, SurgePays swung to a Q4 2022 profit while steadily growing its revenue. Analysts expect 14% sales growth in 2023 and 5.4% in 2024. This high-upside fintech seems like a steal, trading at just 4-times forward earnings and 0.8-times sales.

By providing underbanked groups with financial and telecom services, SurgePays taps into an enormous underserved market. Its software products also help businesses manage sales and connect with customers. With ample room for growth, I believe SURG stock can rocket higher once rate cuts enable more marketing and partnerships.

With 2.3-times more cash than debt, the company’s current valuation makes SURG stock very compelling. Once macro conditions improve for fintech stocks, I expect SurgePays can finally live up to its name.

Zymeworks (ZYME)

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Zymeworks (NASDAQ:ZYME) develops innovative new medicines for cancer and other serious diseases, using specialized software to design potent protein therapeutics.

Yes, it operates in the volatile biotech realm and is posting losses. However, as I’ve noted since November 2023, Zymeworks boasts tremendous cash reserves that provide a substantial buffer.

With $295 million in cash against only $26 million in total debt, the company has ample funding to weather losses for years and advance its pipeline. Despite losing $28 million in Q3, Zymeworks still has more than 10 quarters of cash burn left, at its current run rate.

Revenue growth has admittedly been uneven, but should pick up in a big way over the long-term. I believe Zymeworks can easily triple sales over the next five years, especially as it continues to ink major partnerships. Case in point: the company recently beat Q3 revenue estimates by more than 14%.

So, while the path to growth may be volatile, I remain confident in Zymework’s long-term trajectory. Once pipelines advance and macro conditions improve, this stock could quickly bounce back to previous highs and far beyond.

On the date of publication, Omor Ibne Ehsan 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.

Omor Ibne Ehsan is a writer at InvestorPlace. He is a self-taught investor with a focus on growth and cyclical stocks that have strong fundamentals, value, and long-term potential. He also has an interest in high-risk, high-reward investments such as cryptocurrencies and penny stocks. You can follow him on LinkedIn.

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