Growth investing is back, although the top choices in 2024 are not limited to the technology sector. The energy sector is surging, and so is CES Energy Solutions (TSX: CEU). Healthcare stocks have been steady thus far this year, although Healwell AI (TSX: AIDX) is soaring above its sector peers.
If you have $5,000 to invest, these are two of the best growth stocks right now. As the investment landscape improves with the rate-cutting cycle, both could deliver far superior returns than their current market-beating gains.
CES Energy is a vital player in North America’s oil and gas equipment and services industry. Healwell AI is a fast-rising healthcare technology company that utilizes artificial intelligence and data science for preventative care and early disease detection.
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Vital industry player
CES Energy, a $1.8 billion oil and gas company, manufactures advanced consumable fluids and specialty chemical solutions that clients in the U.S. and Canada use throughout the life-cycle of the oilfield. Performance-wise, the small-cap energy stock is up 123% year-to-date.
Also, at $7.61 per share, the overall return in 3 years is 348.5%. The stock also pays a modest 1.6% dividend. Market analysts recommend a ‘buy to strong buy’ rating.
The company’s two core business segments, Drilling Fluids and Production & Specialty Chemicals, generate most of its revenues. CES Energy derives incremental revenues from Environmental and Transport, a complementary and supporting business segment.
In Q1 2024, revenue increased 6% to $588.6 million versus Q1 2023, while net income jumped 65% year-over-year to $54.4 million. Because of the strong financial performance, robust activity levels, and higher contribution margins, free cash flow (FCF) reached $57.4 million, representing a 278% jump from a year ago.
The vertically integrated business model is a competitive advantage. It is capex-light and asset-light, which enables CES Energy to generate significant surplus FCF. Management maintains an optimistic outlook for the rest of 2024. The positive factors for the business include stable upstream activity, increased service intensity levels, and strong commodity pricing in North America.
CES Energy Solutions benefits from stable end markets and improving trends lately. The drilling fluid requirements (vertical and horizontal wells) are increasing. More importantly, 82% of its customer base are public companies, 80% of which have market caps between $10 billion and $70 billion.
Unstoppable growth
Healwell AI’s upward momentum is unstoppable. At only $2.45 per share, this growth stock has risen 228.7% from year-end 2023. The $409.5 million physician-led company develops and acquires technology and clinical sciences to boost its capabilities in improving healthcare and saving lives.
WELL Health Technologies (TSX: WELL), Canada’s largest owner and operator of outpatient health clinics, is a strategic partner. Healwell AI is in the red but is already on the road to profitability. Its CEO, Dr. Alexander Dobranowski, said, “We’re incredibly optimistic about our future trajectory, driven by a combination of organic growth and strategic mergers and acquisitions.”
Dr. Dobranowski adds that the robust acquisition pipeline positions Healwell for substantial expansion. He expects the current revenue run-rate of over $20 million to exceed $40 million annually.
Windfall for less
CES Energy Solutions and Healwell AI are genuine high-growth stocks. You can earn a considerable windfall from an investment of as little as $5,000.
