The Daily Top Stock Picks. Make More Informed Decisions!
Today's stock picks by Matt Kacur and Lorne Steinberg are UMG-AMS, UL-N, NKE-N, APH-N, CBOE-Q, MSFT-Q.
An exchange for stocks, ETFs, and crypto. Smaller than NYSE or NASD, yet still a $26B market cap and the most exciting. Focuses on derivatives. ROC profile is phenomenal. Likes the space in general. Trades at 19x EV/EBITDA. Great chart, steadily moves up and to the right. Growth was 20% last quarter. Yield is 1.02%.
(Analysts’ price target is $250.88)Revenue is so consistent. Everything it does is recurring revenue. 18% revenue growth for one of the largest companies on the planet, best recurring revenue model ever built. On the leading edge of everything. Product suite is unbelievable. Stock buybacks. Might well be his favourite Mag 7. Yield is 0.63%.
(Analysts’ price target is $623.23)The largest music publisher in the world (i.e. Beatles, Drake, Taylor Swift, Rolling Stones, Lady Gaga, U2). Music is a huge growth and cash flow business. Spotify is raising its rates to pay UMG more. So, there's profit growth. Other revenues come from video games, fitness and social media. Cash flow is growing strongly. They will soon get a US stock listing. Pays a 2% dividend that should grow.
New management has made this a growth business again. Earnings and margins are rising. Cost structure is fantastic. Are in 190 countries. Are spinning off their ice cream business which should create shareholder value. Trades at 17x PE and pays a 3.3% dividend. One of the fastest growing consumer products companies.
(Analysts’ price target is $69.60)The largest sneaker company in the world. Almost zero debt. Are still buying backs shares and paying dividends. They changed CEOs and ditched his distribution strategy. ON is a competitor, but Nike has the money to produce competitive products. Are cleaning out past inventories which will impact the next few quarters, but earnings should double in the next few years. Shares are cheap now.
(Analysts’ price target is $77.54)
Premium contentENVA provides consumer credit services in the US and Brazil. Recently reported earnings showed a 28% increase in originations and 48% increase in EPS. Cash reserves are growing, partially thru increased debt and shares are being bought back. It trades at 11x earnings, 2.1x book and supports a ROE of 21%. We recommend setting a stop-loss at $77, looking to achieve $131 -- upside potential of 25%. Yield 0%
(Analysts’ price target is $131.12)Premium contentHCI, based in Florida, provides property and casualty insurance. Analysts expect to see earnings up over 6% when reported this week. Previously reported premiums were up 24% on the year. It trades at 14x earnings, under 3x book and supports a ROE of 28%. Cash reserves are growing, while debt is retired and shares bought back. We recommend setting a stop-loss at $100, looking to achieve $181 -- upside potential of 28%. Yield 1.1%
(Analysts’ price target is $202.50)Premium contentFaced with recently reported loss of customers, CMCSA is taking drastic steps to increase offerings to its customers. Analysts expect this will stem the tide and allow the company to regain growth. Despite all this, cash reserves are growing while shares are aggressively bought back -- albeit on the back on some increase in debt. It trades at 7x earnings, 1.2x book and supports a ROE of 25%. We recommend setting a stop-loss at $26, looking to achieve $40 -- upside potential of 22%. Yield 3.9%
(Analysts’ price target is $39.84)Premium contentHighlights from their July 23 report: sales of $96 billion, up 14%' operating margins of 32%, flat year over year; Google Cloud expanded revenues by 32% as AI-driven demand for cloud infrastructure remained solid; YouTube ad revenue rose 13% to $9.8 billion; and Google Search grew 12% year-over-year, up from 10% growth last quarter, despite the rise of chatGPT. Other metrics in its favour: 20.87x PE, lowest among the Mag 7 and far from the S&P's 25.9x, and a beta of 1.0, calm for a megatech company.
Premium contentThe bears won on July 11 when ATD suddenly called off the $46 billion deal. Days later, the company revived its share buyback program to the tune of $7.1 billion. Shares bounced back. I was in the bear camp and now see ATD as a stock to enter now before it sets its sight on another take-out target. True, the U.S.'s rising June CPI print raises legitimate concern about the state of the U.S. consumer looking forward. Forbes reported a 4.3% sales decline YOY last February in American convenience stores.
Premium contentResMed has beaten earnings four straight quarters, and its 31.2x PE is nowhere near its 2021 high of 74.5x. However, the street projects a lower future PE of 27.69x. The most recent EPS of $8.91 was 37.09% more than the previous year. Its ROE of 25.81% ranks among the highest in medical equipment where the average is 9.66%. A bonus is that the company operates within the U.S., so is protected from tariffs. Paying a dividend of only 0.76%, ResMed is one for growth, not income.
Investment portfolio consisting of public stocks and private companies. His firm really likes private equity. Stock dipped when handover to new CEO was announced, but nothing else has changed. That's why he likes the stock now. Greg Abel's been there since 2011 under Buffett's tutelage, so it should be smooth sailing. He sees a parallel with AAPL, when Tim Cook took over from Steve Jobs.
Doesn't pay a dividend, but will generate a quarter billion dollars in dividends alone this year, which get reinvested back into the business. That's pretty decent growth right there.
Main reason to invest today is its purchase of HSBC Canada a year or so ago. Analysts haven't yet fully priced in the synergies from that acquisition. It now has more of a global platform. More global capabilities means you attract more global investors and more recurring revenues.
Interprovincial barriers coming down in Canada and a higher infrastructure spend will promote growth in Canada, and the banks will benefit. Yield is 3.50%.
Yes, those earnings were disappointing. Still came ahead of what was expected, but not to the same tune as MSFT's or GOOG's. Just a matter of time before it ramps up again. Will continue spending on data centres, and this will pay off.
Sees a parallel to Q2 earnings for MSFT last year. Azure disappointed, stock dropped ~10-15%. Since then, it's up ~25-30%. Same thing should happen to AMZN in about a year.
This is the one of the group that's going to do the best going forward. With an understanding of tariffs going forward, AMZN will price accordingly; so the e-commerce side of the business will be more refined and its outlook better. No dividend.
What are the best stocks to buy today?
According to Matt Kacur and Lorne Steinberg, the best stocks to buy today are UMG-AMS, UL-N, NKE-N, APH-N, CBOE-Q, MSFT-Q.
Electronic equipment and sensors. Aerospace, data centres. Valuation isn't perfect, and it's certainly run up quite a bit. This company has beat the "fade" (when revenue and ROC drop off) for a very long time and doesn't see that changing. He's willing to pay up for a company of this quality. Yield is 0.61%.
(Analysts’ price target is $113.50)