High-beta stocks often shine during bull markets, delivering exceptional returns to investors ready to embrace risk. These stocks, typically from emerging or high-growth sectors, are ideal for aggressive growth strategies. With their volatility and rapid price swings, they appeal to those seeking short-term gains.

Hence, aggressive investors might consider high-beta picks like Spotify Technology S.A. (SPOT), HCA Healthcare, Inc. (HCA), and DoorDash, Inc. (DASH), all boasting a 60-month beta above 1.50.

Economic activity has seen modest expansion across most regions since early October, with moderate expectations across sectors. Despite persistent inflation, markets are anticipating a quarter-point rate cut, with current rates at 4.50%-4.75% and further reductions expected to bolster the economy. Businesses remain optimistic about improved demand in the near term, despite ongoing challenges.

Meanwhile, the current bull market offers favorable conditions for investors. Historically, bull markets lasting two years often extend into the third year, though risks like inflation and geopolitical tensions may influence future performance. For aggressive investors, high-beta stocks, which react significantly to market movements and amplify profits during economic booms, present an attractive opportunity.

With these favorable trends in mind this December, let’s analyze the fundamental aspects of the three high-beta picks.

Spotify Technology S.A. (SPOT)

Based in Luxembourg, Luxembourg, SPOT and its subsidiaries provide audio streaming services worldwide. They operate through two segments: Premium and Ad-Supported.

In terms of the trailing-12-month asset turnover ratio, SPOT’s 1.66x is 236.4% higher than the 0.49x industry average. Also, its trailing-12-month Return on Common Equity and Return on Total Assets of 20.70% and 6.64% are 387.4% and 284% higher than the industry averages of 4.25% and 1.673%, respectively.

For the third quarter ending September 30, 2024, SPOT’s revenue increased by 18.8% year-over-year to €3.99 billion ($4.19 billion). The company’s gross profit rose 40.1% from the prior-year period to €1.24 billion ($1.30 billion). During the same period, its net income attributable to owners of the parent was €300 million ($315.25 million) or €1.45 per share, up 361.5% and 339.4% year-over-year, respectively.

For the quarter ending December 31, 2024, SPOT’s revenue is expected to increase 9.9% year-over-year to $4.34 billion. Its EPS for the quarter ending March 31, 2025, is expected to increase 81.3% year-over-year to $1.88. SPOT’s stock has gained 167.4% year-to-date to close the last trading session at $502.38. Its 60-month beta is 1.61.

SPOT’s POWR Ratings reflect strong prospects. It has an overall rating of B, translating to a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

It has an A grade for Growth and a B for Quality. It is ranked #2 out of 4 stocks in the Entertainment - Radio industry. Beyond what we stated above, we have also rated SPOT for Value, Momentum, Stability, and Sentiment. Get all ratings of SPOT here.

HCA Healthcare, Inc. (HCA)

HCA and its subsidiaries, provide healthcare services in the United States. It operates general and acute care hospitals that offer medical and surgical services, including inpatient care, intensive care, cardiac care, diagnostic, and emergency services; and outpatient services, such as outpatient surgery, laboratory, radiology, respiratory therapy, cardiology, and physical therapy.

In terms of the trailing-12-month EBITDA margin, HCA’s 19.75% is 245.9% higher than the 5.71% industry average. Likewise, its 5.96% trailing-12-month levered FCF margin is 172.3% higher than the 2.19% industry average. Furthermore, its 1.22x trailing-12-month asset turnover ratio is 193.9% higher than the 0.42x industry average.

During the fiscal third quarter that ended September 30, 2024, HCA’s revenues increased 7.9% year-over-year to $17.49 billion. Its adjusted net income attributable to HCA was $1.27 billion, up 18.1% from the prior-year quarter, while its adjusted earnings per share rose 25.3% year-over-year to $4.90. Additionally, its adjusted EBITDA grew to $3.27 billion from the year-ago value.

Street expects HCA’s EPS and revenue for the quarter ending December 31, 2024, to increase 4.4% and 5.4% year-over-year to $6.16 and $18.23 billion, respectively. It surpassed the consensus EPS estimates in three of the trailing four quarters. Over the past year, the stock has gained 26% to close the last trading session at $324.09. Its 60-month beta is 1.64.

It’s no surprise that HCA has an overall rating of B, which translates to a Buy in our proprietary POWR Ratings system.

It has a B grade for Value, Stability, and Quality. Within the B-rated Medical - Hospitals industry, it is ranked #3 out of 10 stocks. To access additional grades for HCA’s Growth, Momentum, and Sentiment ratings, click here.

DoorDash, Inc. (DASH)

DASH is a global platform that links merchants, consumers, and contractors, offering marketplaces (DoorDash, Wolt), membership products (DashPass), delivery fulfillment (Drive), and e-commerce tools (Storefront, Bbot) to support order fulfillment, customer acquisition, and digital ordering solutions.

On November 26, 2024, DASH Canada and Walmart Canada announced a nationwide partnership, enabling on-demand delivery of groceries and general merchandise from over 300 Walmart Supercentres across 10 provinces. The collaboration provides Canadians with affordable, convenient shopping options through DASH’s app and website.

On November 18, 2024, DASH announced new holiday features, including a redesigned shopping experience, gifting options with personalized notes, and discounts on DashPass for SNAP/EBT recipients. The platform also introduced bundled multi-store orders, holiday deals, and exclusive partnerships to simplify and save time on shopping and gifting this season.

In terms of the trailing-12-month gross profit margin, DASH’s 48.78% is 28.3% higher than the 38.04% industry average. Also, its 18.31% trailing-12-month levered FCF margin is 296.3% higher than the 4.62% industry average.

In the fiscal third quarter that ended on September 30, 2024, DASH’s revenues increased 25% year-over-year to $2.71 billion. Its income from operations was $107 million, compared to a loss from operations of $108 million in the year-ago quarter.

Similarly, its net income attributable to DASH and net income per share attributable to Class A and Class B stockholders stood at $162 million and $0.38, respectively, compared to a net loss and net loss per share of $73 million and $0.19 in the year-ago quarter.

Analysts expect DASH’s revenue for the quarter ending December 31, 2024, to increase 23.1% year-over-year to $2.84 billion. Its EPS for the same quarter is expected to grow 122.1% year-over-year to $0.93. It surpassed the Street EPS estimates in three of the trailing four quarters. Over the past year, DASH’s stock has gained 79.8% to close the last trading session at $176.88. Its 60-month beta is 1.70.

DASH’s POWR Ratings reflect strong prospects. It has an overall rating of B, translating to a Buy in our proprietary rating system.

It has an A grade for Growth and a B for Sentiment and Quality. It is ranked #8 out of 24 stocks in the Internet - Services industry. To see DASH’s Value, Momentum, and Stability ratings, click here.

What To Do Next?

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SPOT shares were trading at $490.51 per share on Thursday afternoon, down $11.87 (-2.36%). Year-to-date, SPOT has gained 161.03%, versus a 29.21% rise in the benchmark S&P 500 index during the same period.

Abhishek embarked on his professional journey as a financial journalist due to his keen interest in discerning the fundamental factors that influence the future performance of financial instruments.

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