April's Hidden Gems: 3 Overlooked Stocks to Freshen Up Your Portfolio

Core Insights - The article highlights the potential of overlooked stocks in the AI market of 2024, as major tech companies dominate while some growth stocks show signs of cooling off, creating opportunities for investors seeking undervalued options [1] Group 1: Market Overview - The S&P 500 and Nasdaq 100 have gained over 7% year to date (YTD) [1] - Prominent growth stocks are experiencing a decline in stock prices, indicating a potential market rotation towards more affordable options [1] Group 2: Alliance Resource Partners (ARLP) - Alliance Resource Partners is a leading coal producer in the U.S. and is transitioning its business model from coal production to the Oil & Gas royalty business due to challenges in the coal sector [3][4] - In the fourth quarter, ARLP's revenue declined 11% year over year (YOY) to $625 million, with net income down 46% to $115 million [3][4] - The stock has declined 4% YTD, with a dividend yield over 13%, and is currently undervalued at 5.0 times forward earnings and 1.0 times trailing sales, with a 12-month price target of $26.00 suggesting a 28% upside [4] Group 3: Royalty Pharma (RPRX) - Royalty Pharma is a dominant player in the pharmaceutical royalty market, with a pipeline of 45 royalty streams [5][6] - Fourth quarter royalty receipts increased 10% YOY, leading to a 5% YOY revenue increase to $596 million, and net income improved to $494 million from a $456 million loss in the prior year [6][7] - RPRX trades at a discount compared to biopharma peers at 8.6 times forward earnings, with a dividend yield of 2.8% and a 12-month price target of $42.00 implying 44% upside potential [7] Group 4: SPDR Gold Shares (GLD) - SPDR Gold Shares is the world's largest physically backed gold ETF, with $61 billion in assets under management [8] - The ETF serves as a safe-haven asset, particularly attractive during economic uncertainty, and typically exhibits an inverse correlation to equities [8] - GLD has gained over 12% YTD, currently trading above $215, with ongoing concerns in the equity market likely to sustain gold's positive momentum into 2024 [9]