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The technology-enabled disruption is not new, but it has laid new pathways for several companies. It has also led to several individuals exploring the stock market and learning to pick stocks that will add value to their portfolios. There was a time when the stock market world intimidated investors and did not explore the investment options independently. But with access to so much information in the form of market research, newsletters, and market commentary, it has become easy to identify and pick stocks for your portfolio.
Despite the rising competition in the industry, some companies outperform others, and investors need to monitor them. Investing in an up-and-coming stock at the right time and at the right price point can make a huge difference to the gains.
In this article
Overview of the top up-and-coming stock
Company Stock | Best For |
Chewy | High upside possibility due to the growing pet ownership |
Bill Holdings | Massive upside potential |
Lemonade Inc. | Ready for a breakout |
J&J Snack Foods Corp. | Dividend yield |
Five Below, Inc. | Great mid-cap stock |
Toast Inc. | High growth potential in the restaurant sector |
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Best up-and-coming stock
Here are the six best up-and-coming stocks you need to watch.
Chewy (NYSE: CHWY)
Florida-based pet product company Chewy has a market cap of $10.05 billion. The company went public in 2019 and has seen several ups and downs. It recently reported impressive first-quarter numbers and announced a $500 million share buyback plan. With the rising demand and popularity for pet products, Chewy is set to benefit. Pet ownership has grown over 50% in the past 36 years, which means Chewy is at the right place at the right time.
Bill Holdings (NYSE: BILL)
Bill Holdings is based in California, and it provides automated, cloud-based solutions for financial companies. With the growing importance of the cloud and the transition of several businesses into the cloud, Bill Holdings is set to expand. This up-and-coming stock is trading below $50 and has significantly dropped since the start of the year. However, this dip could be a chance to buy the stock. It reported a strong third quarter with a revenue of $323.03 million.
Lemonade (NYSE: LMND)
Insurance company Lemonade offers a diverse range of coverage options, including pet insurance, renters insurance, term life insurance, car insurance, and homeowners insurance. It differentiates itself from other insurance providers by using AI-powered chatbots to optimise the claim process. It is also expanding across the European market and plans to become cash flow positive by next year. The stock is set for a breakout soon.
J&J Snack Foods Corp. (NASDAQ: JJSF)
J&J Snack Foods Corp is a New Jersey-based manufacturer and distributor of branded snack foods and frozen beverages. The company is a leader and innovator in the industry and has returned close to 8% to investors in the past year. In May, the company posted first-quarter 2024 earnings and reported earnings per share of $0.84 and revenue of $359 million. The stock is trading at $166 today, much lower than the 52-week high of $177.
Five Below, Inc. (NASDAQ: FIVE)
Five Below, Inc. is a specialty value retailer based in Philadelphia. The chain is aimed at teens and tweens, and the retailer has discount stores that sell products that cost up to $5 and an assortment of products from $6 to $25. The shares have offered impressive returns in the past, and the recent financial report is proof of the company's potential. It reported a 12% revenue growth year over year. The numbers prove that the company is working on the right business strategy and has the potential to grow. It has a market cap of $6.61 billion and has partnered with Instacart, a leading grocery platform in North America. Through this partnership, the company aims to expand in the region. The stock has a price target of over $164, an upside from the current level of $112.
Toast Inc. (NYSE: TOST)
An American cloud-based restaurant management software company, Toast Inc., is based in Boston and offers a point-of-sale system, which is built on an Android operating system. The company has a market cap of 12.32 billion, and the stock is trading for $21. It is poised for growth in the ever-expanding restaurant industry. In the first quarter results, the company reported a 31% year-over-year rise in revenue, and the loss stood at $83 million. The company aims to solve the pain points for clients in the industry, and I believe it will see higher margins in the coming years.
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Evergreen stocks
While the up-and-coming stocks can be a great addition to your portfolio, there are some evergreen stocks you need to keep an eye on. Whenever you notice a dip, make your move and load up on them. These are high-value stocks with a solid track record and the potential to beat market returns. If you do not have the funds to invest in them, consider fractional investing. Several online brokers offer fractional investing.
Related: Motley Fool Review
Apple (NASDAQ: APPL)
One of the top tech companies in the world, Apple Inc. hit a $3 trillion market cap and became one of the biggest companies in the world. Its current market cap is $3.18 trillion, and it is the second most-valued company in the world. When it comes to revenue growth and fundamentals, Apple holds a very strong place in the industry, and it will be hard for any tech company to take its position. It is a stock to buy and hold for the long term. It is also one of the top dividend stocks, with an annual dividend yield of 0.48%.
Alphabet (NASDAQ: GOOGL)
Alphabet is another great pick. It is the parent company of Google and one of the top growth stocks in which to invest. We are all aware of Google and its revenue-generating branches. Whether it is YouTube, Google Search, or Cloud, the revenue does not stop. Several efts have also invested in Alphabet stock. For the first quarter, the company posted a 15% growth and returned to double digits. I think the upward momentum has only begun.
The stock has increased more than 43% in the past year and is trading close to $178 today. It is a good stock to own for the long haul.
Netflix (NASDAQ: NFLX)
Netflix has become a household name, and the company is a cash-generating machine. It made the most of the pandemic but saw a significant dip in users, after which it started exploring in-game ads and other revenue alternatives. The subscription streaming and production service company saw an excellent first quarter and beat profit expectations as the ad-tier subscriptions increased. It remains one of the evergreen stock picks for its long-term potential. The stock has a 52-week high of $664 and is currently trading for $652.
Tesla (NASDAQ: TSLA)
Clean energy company Tesla is next on our list of evergreen stocks. The market volatility has impacted all stocks, making it a good time to take your picks. One of the top companies in the world, Tesla's stock has been down 25% in the year and is trading for $184. The stock was once as high as $1,200, after which it went for a stock split in 2022. Despite inflation and supply chain issues, Tesla remains a high-growth stock. The company missed analyst expectations in the quarterly results and reported a drop in the gross profit margin due to slowing EV demand.
Related: How to Buy Tesla Stock – Pay No Fees
Amazon (NASDAQ: AMZN)
Amazon is all things e-commerce, and there is no stopping the company. A household name today, Amazon has successfully transformed the way we shop. It also offers cloud computing, artificial intelligence, and digital streaming services. Amazon reported an exceptional quarter and beat estimates. It is up 26% in the past six months and is trading at $187 today. Investors need to remember that Amazon is so much more than just e-commerce, which is why the stock has ample growth potential. Several mutual funds have also invested in Amazon stock.
Disney (NYSE: DIS)
The Walt Disney Company also offers a streaming service, which is popular among the famous Walt Disney Studios. The company has various sources of revenue, and its quarterly results have been impressive. Its experience segment saw impressive growth and reported a 7% jump in the segment. As the world gears up for more travel, its parks and experiences segment will continue to bring in more money. The stock is up 10% in the year and is trading close to $100 today. This could be a signal to load up on the stock before it skyrockets.
Microsoft (NASDAQ: MSFT)
Microsoft is another evergreen stock that holds space in your retirement portfolio. Microsoft is a tech giant that always impresses investors with solid fundamentals and dividends. The company recently reported earnings and beat estimates. It generates impressive cash flow used for research and development activities. Like other tech giants, Microsoft has several revenue streams and is known for its personal computers, laptops, and software. The company reported better-than-expected results despite high inflation and slowing PC demand. It is also the biggest beneficiary of the Artificial Intelligence boom.
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Best up-and-coming stock summary
Company Stock | Price (as of close June 13, 2024) | 52-week high | 52-week low | Market cap |
Chewy | $23.20 | $40.78 | $14.68 | $10.11B |
Bill Holdings | $49.41 | $139.50 | $49.06 | $5.24B |
Lemonade Inc. | $15.43 | $24.81 | $10.26 | $1.09B |
J&J Snack Foods Corp. | $166.34 | $177.71 | $133.23 | $3.22B |
Five Below, Inc. | $112.78 | $216.18 | $106.21 | $6.22B |
Toast Inc. | $21.50 | $27.90 | $13.76 | $11.93B |
FAQs
How to pick the best stocks to buy?
Whenever you start investing, your goal should be picking businesses that have solid fundamentals and the stock should have value. Research the business and understand the fair value of the stock before you give it space in your portfolio. The more research you do, the better stocks you will be able to pick.
What is the difference between up-and-coming stocks and evergreen stocks?
In this guide we have picked the top up-and-coming stocks and the top evergreen stocks. Up-and-coming stocks are the lesser-known stocks with high growth potential. They look promising and can generate solid returns for you. In contrast, evergreen stocks, as the name suggests are those companies that have a strong history and stellar fundamentals. These companies are already doing well in the industry and hold the top position in the sector but the stock is currently down due to market volatility which makes it a good time to buy.
What are small-cap and mid-cap stocks?
Stocks are classified based on the market capitalization of the company and they can be divided into small-cap, mid-cap, and large-cap stocks. Small-cap stocks are businesses that have a market cap between $300 million and $2 billion. Mid-cap companies have a market cap of between $2 billion and $10 billion while large-cap companies have a market cap of more than $10 billion.
The bottom line
The stock market is a great place to make money, but you must choose the right investments for your portfolio. Do not make buying decisions based on a hot tip or market movements. Keep your emotions aside and look for stocks that have solid potential. Invest in the up-and-coming stocks and balance the portfolio with a few evergreen stocks to generate a steady income through dividends while watching your portfolio grow with time. Try to diversify your portfolio with bonds, crypto, and real estate investment trusts (REITs) to reduce risk and increase returns.
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Editor
Vandita Jadeja is a financial writer and editor at Joywallet. She loves to read and write about money and brings a decade of experience from the financial industry.
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