10 Wide-Moat Stocks on Sale
Undervalued high-quality stocks may be just the ticket in a choppy market.
OT: Stock and Investment Talk
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I struggle with this wide moat concept.10 Wide-Moat Stocks on Sale
Undervalued high-quality stocks may be just the ticket in a choppy market.www.morningstar.com
How is Campbell's soup wide moat?
I've heard auto's is not wide moat, but canned foods is?
I think it’s less sector specific and more company specific compared to its competitors.
It’s got a competitive advantage compared to the competition. So it’s place is kind of protected like a wide moat around a castle offers protection.
CPB, KHC, GIS, K..etc…may be wide moat companies but they’re not big growth ones. Frankly, if not for inflation I’d worry about even no growth or very low growth.
The trend has been towards natural and organic and a lot of these guys don’t have a big line up of those products although they have been trying. Since there’s inflation I wonder how much that hurts the natural and organic trend. So do people downgrade to those well known brands these guys own. I wonder though will people go right past the mid tier and go right down to private label brands. Those also have bigger margins for the stores so you wonder if those get promoted more too.
Not the mix of stocks I was expecting. I think of moats in terms of little to no competition. That’s why I’m thinking about Align and Match. Also looking at Zoetis if it drops some more.
I think of it partially as a high barrier of entry to operate at a high level in whatever space. Little or no competition is great but if the barrier to entry is low then the moat really isn't that wide and can disappear.
If you watch that show Shark Tank, it's like what Kevin often says to an entrepreneur ...."what's to stop such and such big company from coming in and doing the same thing (assuming nothing proprietary) and crushing you like a cockroach" etc... ie no moat.
Goldman Sachs just upgraded Match to “buy” from “neutral,” saying it would benefit from “structural industry tailwinds” in the years ahead. Up in the pre market. Glad I pulled the trigger.
For those looking to add more GOOGL to their pile, do so soon!
From JC's daily update:
From JC's daily update:
- Cowen still likes Alphabet (GOOGL) and takes price target to $3,500 from $3,360... this is a big call because the ad buys are being limited more by iOS... owned by the club...
Google is my single largest position. It’s virtually unstoppable from a business perspective. Only real risk is regulatory.
I have some CBP stock, one of the value stocks I picked up recently. 3.27% dividend, 14.4 PE and almost 20% below the high. Brought at $43.4 - Jan 3 up over 4% already.
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Earnings for the Big Techs coming out shortly, MSFT Jan 25 and the rest FB, GOOG, AMZN and APPL coming out Feb 1-2. Expect them all to rise the next two weeks.
Earnings of those tech companies are usually strong. It's just a matter of are they strong enough? Often they are.
I don't own many ETF's or mutual funds. We have some in retirement accounts and HSA accounts, but most of our taxable accounts are strictly stocks only. I generally have 3 large buckets of stocks and then smaller buckets within those buckets. I have stocks that I have owned for a long time such as AAPL, AMZN, etc. I consider these my stable long term stocks. I generally use a vanguard account to stash these stocks. Vanguard is nice for long term investors because they do their best to prevent people from day trading. They update their tickers slowly and they don't even show you the daily gains. The second large bucket is stocks that are transitioning to the long term bucket. This is where I put stocks like TSLA. The third bucket is the short term trading stocks. This is the high beta stocks that I am hoping will deliver substantial alpha. This is where the fintech, EV starters, battery companies, etc come in. I would say that this bucket is about 20-25% of my overall portfolio.
I'm not so familiar with it, but there was a surge in pet ownership through the early-mid stages of the pandemic right, so that looks like it helped propel it. YoY comps might have been hard to match after that but maybe it's getting through that and comps coming up might be easier to beat. It does look like it's been making lower highs since it peaked Feb of last year. 52 week low today.
Made money a couple qtr's ago, but did not in the most recent 2 qtrs. Not projected to make money till 2024. Price to sales of only 2.37x, and growth is looking good.
Still as a non earnings company, I'd stay away for awhiles at least.
HII is company I've owned for a year or so, and it' been stagnant. Defense sector, builds nuclear subs.
Pretty cheap, at 14ishx P/E. Stock price is currently $195. and that is still down below it's pre-covid level, and down from it's ATH's in early 2018(a level it has tested a couple times since) of around $260.
Now 2018 was also it's ath for earnings, and those earnings have decreased since. EPS in 2020 was 17.14. In 2021 it was 13.53. So we can see why the stock is down.
But projected earnings are projected to grow nicely in the upcoming years. 2024 projected to be $22.10 per share. Put a 14x multiple on that and you're looking at a $300 stock. 50% upside from here.
Now that does go back to something I brought up yesterday, that being, how much confidence can we have in those earnings projections. I would think gov't contracts would provide a high level confidence? Though I do wonder about input costs given subs would be very material dependent.
Having been flat for a year this is one which is reaching a cross roads in my protfolio. But those projections make me think I was merely early. I might add to it.
And as pressure continues on the tech sector, this one would at least provide a fairly safe haven.
Pretty cheap, at 14ishx P/E. Stock price is currently $195. and that is still down below it's pre-covid level, and down from it's ATH's in early 2018(a level it has tested a couple times since) of around $260.
Now 2018 was also it's ath for earnings, and those earnings have decreased since. EPS in 2020 was 17.14. In 2021 it was 13.53. So we can see why the stock is down.
But projected earnings are projected to grow nicely in the upcoming years. 2024 projected to be $22.10 per share. Put a 14x multiple on that and you're looking at a $300 stock. 50% upside from here.
Now that does go back to something I brought up yesterday, that being, how much confidence can we have in those earnings projections. I would think gov't contracts would provide a high level confidence? Though I do wonder about input costs given subs would be very material dependent.
Having been flat for a year this is one which is reaching a cross roads in my protfolio. But those projections make me think I was merely early. I might add to it.
And as pressure continues on the tech sector, this one would at least provide a fairly safe haven.
Sold my RBLX yesterday. Glad I did, down 8% today.
Sold just out of the money calls on AI and SOFI. Well, let's just say I can close out those calls today pretty cheap.
I know I should be out of these type stocks, but I continue to let them bite me in the ass.
Sold just out of the money calls on AI and SOFI. Well, let's just say I can close out those calls today pretty cheap.
I know I should be out of these type stocks, but I continue to let them bite me in the ass.
MRVL is under $80. Buy? Sold MTTR this morning at break even. Needed more cash for higher conviction plays (GOOGL and NOW).
Great buying day again, love when emotions get the better of people. LOL!
I wouldn't call this emotional. I think this is the start of a correction. You'll get some dead cat bounces along the way but I don't believe we've hit bottom.
I think it is very emotional. Company earnings are getting better. The economy is getting better. Any "correction" will be temporary, especially when inflation declines quicker than expected. This is setting up perfectly for serious gains (if you taking advantage of these artificial buying opportunities).
I'm hoping for the same! LOL
My new account is 100% tech. 14 stocks. So, I'm putting my money where my mouth is.
MRVL has a 50X PE with 33% expected growth yoy into 2023(it's reports 4th qtr 2022 early march).
PEG ratio of 1.6ish. Little pricey still, and the way the market is selling off. I'd maybe wait.
QCOM I think is the buy right now.
@RUAldo
Guy Adami picks PINS for his final trade tonight.
Notes that support level from 2018 or whenever.
Aside from the super values I think the entirety of the market is at risk for a correction in the near term, but PINS does look good.
Tim Seymour picks twtr. But can it ever turn a profit?
Guy Adami picks PINS for his final trade tonight.
Notes that support level from 2018 or whenever.
Aside from the super values I think the entirety of the market is at risk for a correction in the near term, but PINS does look good.
Tim Seymour picks twtr. But can it ever turn a profit?
Yes, I was looking at the MRVL chart. It was trading in the 60s/low 70s before a nice pop, which I assume was due to an earnings beat. Makes me think you are right.....can go down some more. I will continue to track.
From a few months ago:
Fair Value and Profit Drivers | Updated Nov 05, 2021
Our $67 fair value estimate represents an enterprise value/sales and enterprise value/EBITDA multiples of 12 and 53, respectively, versus our 2022 estimates. We project 2021 revenue growth of 52% as lower user growth is likely to be more than offset by strong growth in user monetization. Also, we suspect the accelerated transition to e-commerce has brought more shoppers and advertisers to the platform more quickly. We now model 22% 10-year compound annual growth for revenue, which results in revenue of $6.8 billion in 2025 and $12.5 billion in 2030. By 2030, we estimate Pinterest will have approximately 2% of the global digital advertising market.
We expect pinner growth will decelerate, as we don't see much upside in U.S. user growth, offsetting continued growth internationally. We estimate average total users will hit 719 million by 2030 from 459 million in 2020, representing average annual growth of 6%. In our view, given that most Pinterest users access the app with the intention of finding various products or ideas, making them attractive to advertisers, monetization of pinners will outpace user growth. Video content also continues to grow on Pinterest, which we think will attract both direct response and brand advertisers, especially during an economic recovery, likely at higher ad rates. We anticipate average annual revenue per user to increase 16% annually through 2030. Due to the consumption-driven economy in the U.S., we expect ad dollars allocated to Pinterest to grow in the U.S. despite the firm's decelerating U.S. user count. Growth in international users, led by Europe, will also be accommodated by higher average revenue per international user.
With strong top-line growth and Pinterest's network effect and data economic moat sources, we expect gross margin and operating margin expansion during the next 10 years. As Pinterest enhances its ad selling system to handle more transactions in real time and to make it more programmatic, or "self-service," costs associated with ads sold should decline and gross margins are likely to expand. We assume gross margins of 78% and 79% in 2025 and 2030, respectively, higher than the 73% earned in 2020. We expect operating margin expansion to 34% by 2030 from operating losses in 2020.
Talked SNAP recently.
Stock has cut in half.
Still over 100x P/E, so absolutely part of the high multiple sell off.
But eps growth projected to be about 60% yoy, into 2022. And expected to double yoy into 2023. And then 80ish% yoy into 2024.
Confidence level of those projections? I do not know, but it has a foot in the metaverse which may not be in those projections, so maybe those projections are underselling those long outlook earnings.
Now I do think this thing likely continues to sell off, but this does look like one to watch.
Stock has cut in half.
Still over 100x P/E, so absolutely part of the high multiple sell off.
But eps growth projected to be about 60% yoy, into 2022. And expected to double yoy into 2023. And then 80ish% yoy into 2024.
Confidence level of those projections? I do not know, but it has a foot in the metaverse which may not be in those projections, so maybe those projections are underselling those long outlook earnings.
Now I do think this thing likely continues to sell off, but this does look like one to watch.
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FYI - just one data point, but from Cramer's morning email:
- Snap (SNAP) downgraded buy to hold at Cowen... says impacted by IOS 14.5 measurement and response, hard compares, shrinking valuation... $75 price target down to $45...
Good let those downgrades knock it down some more then swoop in.
I don't see any support until $25, but man if it gets there, I'm in.
Edit: it was down 10% today that was probably due to that downgrade?
I hope you have some cash on the side (or dump lower conviction stocks). This is when the money is made. LOL!
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