This e-commerce solutions company is one of the best-growing publicly traded companies

We recently created a list 12 best upcoming stocks to buy according to hedge funds in this article we discuss specific emerging stocks, GigaCloud Technology Inc. (NASDAQ:GTC)..

Despite concerns surrounding the market over the past few years, the broader market performed exceptionally well, and by mid-May, the S&P 500 reached new record highs, surpassing 5,300 points. While bearish sentiment has prevailed in the broader market since 2022, and even after strong results in 2023, many analysts have withdrawn their statements and now expect a positive future. At the end of 2024, UBS and BMO expect the index to reach 5,600, Wells Fargo expects it to close the year at 5,535, and even one of the most bearish analysts, Morgan Stanley’s Mike Wilson, raised the target to 5,400 from a pre-4,500 level.

Interest rate forecasts

For several years, the main topic of discussion on the markets has been interest rate increases and decreases. In 2023, many analysts predicted as many as six cuts in 2024, but those forecasts have weakened over time with hotter-than-expected inflation data. At the Federal Reserve’s May 1 meeting, Chairman Jerome Powell was hesitant to provide a specific deadline for making any decision on interest rate cuts and said the Fed needed more data before taking any step. However, the president signaled that the chances of salary increases are unlikely. Some experts also believe that there may be no interest rate cuts this year, as we wrote about in our previous article on stocks of the best soaps and cleaning products.

According to CME’s FedWatch tool, 98.9% of the market expects interest rates to remain the same at the June Fed meeting, and 1.1% think the Fed could raise rates by 25 basis points (bps). Morgan Stanley expects rate cuts to start at 25 basis points in September as they expect inflation to start falling, which could give the Fed enough confidence to start cutting interest rates. The FedWatch tool shows that in September, 51.6% of the market expects no interest rate cuts, 42.8% expect a 25-bp cut, 5% expect a 50-bp cut, and 0.6% think there will be 25 bp higher than the current level of 5.25-5.5%.

The story continues

Market growth potential in the face of tightening policy

We have seen another slowdown in the market recently as the broader market contracted by 1.5% from May 27-30. However, some experts still expect growth and believe that the market is in good shape.

On May 29, former chief investment strategist of The Leuthold Group and Wells Capital Management Jim Paulsen told CNBC that he was optimistic about the economy and emphasized its resilience despite previous predictions of a recession and challenges such as inverted yield curves. He highlighted the strength of corporate balance sheets, overall economic health, liquidity and positive recent earnings reports. He also acknowledged that tightening policies such as higher yields, a stronger dollar, a lower fiscal deficit-to-GDP ratio, moderate monetary growth and a shrinking balance sheet would ultimately slow the economy and reduce inflation. Paulsen predicts that inflation will fall below 3%, creating favorable conditions for the market and suggesting the potential for further increases. Moreover, Paulsen noted that inflation has actually fallen compared to 9% in 2022, and added that he doesn’t think the Fed’s 2% inflation target is needed for “all to be well.”

This e-commerce solutions company is one of the best-growing publicly traded companies

Our methodology

For this article, we used Yahoo Finance’s stock screener to identify over 400 companies that have seen revenue growth of at least 40% year-over-year and have a market capitalization of more than $300 million. We then narrowed our list to 12 companies that have seen increased hedge fund sentiment from Q4 2023 to Q1 2024, have positive analyst sentiment, and have seen consistent revenue growth. We’ve listed the top-performing stocks in ascending order of hedge fund sentiment.

Hedge fund data was pulled from Insider Monkey’s database of 919 elite hedge funds as of Q1 2024. Why do we care about the stocks hedge funds flock to? The reason is simple: our research has shown that we can outperform the market by imitating the stocks of the best hedge funds. Our quarterly newsletter strategy covers 14 small- and large-cap stocks each quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).

This e-commerce solutions company is one of the best-growing publicly traded companies

GigaCloud Technology Inc. (NASDAQ:GTC)

Year-on-year revenue growth in Q3 2023: 39.2%

Year-on-year revenue growth in Q4 2023: 94.8%

Year-on-year revenue growth in Q1 2024: 96.5%

Number of hedge fund holders: 13

GigaCloud Technology Inc. (NASDAQ:GCT), formerly known as Oriental Standard Human Resources Holdings Limited, is a California-based company that offers comprehensive B2B e-commerce solutions for large shipments.

On May 22, Maxim initiated a report for GigaCloud Technology Inc. (NASDAQ:GCT) with a Buy rating and a $69 price target. GigaCloud Technology Inc. (NASDAQ:GCT) is trading at a trailing twelve-month price-to-earnings multiple of 11.8x, which is well below the technology sector’s average PE ratio of 41.57.

Despite a nearly 8% year-over-year decline in retail furniture sales in the first quarter of 2024, GigaCloud Technology Inc. (NASDAQ:GCT) posted its highest-ever first-quarter results, marking its fifth consecutive quarter of revenue growth. These results underscore the company’s ability to drive sustainable and profitable growth even in the face of declining consumer spending. Moreover, the company’s total revenue almost doubled to $251 million in the first quarter of 2024, another 2.4% increase compared to the fourth quarter of 2023, which is usually the strongest period due to seasonal trends and is characterized by a solid growth trajectory. Revenue from GigaCloud Technology Inc.’s 3P services. (NASDAQ:GCT) grew 92%, and off-platform e-commerce product revenue grew nearly 200% year-over-year. Such impressive financial results reflect the company’s effective operational strategy and market position.

Gross value of goods on the GigaCloud Technology Inc. market. (NASDAQ:GCT) grew 64% year-over-year to $908 million for the trailing 12 months as of March 31. The number of active 3P sellers increased by 44%, while the number of active buyers increased by 29%. These indicators point to a healthy and growing market, driven by a growing supplier base and a diversified product portfolio.

According to our database, 13 hedge funds held shares in GigaCloud Technology Inc. during the first quarter. (NASDAQ:GCT), and the total value of the position was USD 33.391 million.

GigaCloud Technology Inc. (NASDAQ:GCT) ranks eleventh on our list of top growing stocks to buy. To find other promising stocks that hedge funds and analysts like, check out our free report on: The 12 best upcoming stocks to buy, according to hedge funds.

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Disclosure. Nothing. This article was originally published on Insider Monkey.