Investing alongside you, fellow Foolish investors, here’s a selection of listed companies that some of our contributors have been buying the stock of across the past month!
What it does: Amazon is a tech company that operates in a range of areas including e-commerce, cloud computing, and digital advertising.
One reason I’m bullish here is that the company is focused on becoming more efficient right now. Not only is it cutting jobs, but it is pulling out of unprofitable ventures. This could have a big impact on its bottom line in the years ahead.
Another is that the company is making some interesting moves in the artificial intelligence (AI) space. Recently, it launched a service called ‘Bedrock’ that lets customers build their own generative AI tools (like ChatGPT). This could boost its revenues.
Finally, I also like the fact that after a long period of share-price weakness, the stock is now trending up again. I’m hoping this trend will continue.
Of course, it may not continue. If sentiment towards tech shares deteriorates, there’s a good chance the stock will fall.
In the long run, however, I think it has bags of potential.
Edward Sheldon owns shares in Amazon.
What it does: American Tower is a real estate investment trust (REIT) that owns and operates wireless and broadcast communications infrastructure.
By Ben McPoland. There are expected to be 7.7bn smartphones in the world by 2030, up from an estimated 6.8bn today. And one giant REIT, American Tower (NYSE: AMT), continues to directly benefit from this astonishing growth.
It operates cellphone towers and more recently data centres. In fact, its portfolio contains a staggering 226,000 global communications assets, including more than 43,000 properties in North America and some 182,000 internationally.
Revenue soared from $1.5bn in 2008 to $10.7bn in 2022. But if technologies like virtual reality and self-driving cars ever go mainstream, then demand for 5G infrastructure and data centres should explode higher.
The share price is down 22% over one year, meaning the 3.3% dividend yield is now double the S&P 500 average. One concern is that American Tower does have a fair bit of floating debt, so dividend increases could be constrained while it adjusts its composition of debt.
However, I’ve been buying. I think the dividend could be sustainable for decades as the digitisation of the world accelerates.
Ben McPoland owns shares in American Tower.
What it does: Diageo is one of the world’s biggest drinks manufacturers thanks to brands like Smirnoff and Johnnie Walker.
By Royston Wild. Like billionaire investor Warren Buffett, I’m a big believer in buying quality shares when they fall in value. It’s why I’ve increased my holdings in alcoholic drinks giant Diageo (LSE:DGE) in recent days.
The FTSE 100 company struck its current highs for 2023 of £37.70 per share in late April. Since then it’s dropped 11% in value on worries over slowing sales in North America, falling investor interest in defensive stocks, and uncertainty over the firm’s direction under new chief executive Debra Crew.
I believe that the scale of Diageo’s share-price drop is unwarranted. The firm’s ongoing drive into the premium and non-alcoholic drinks segments should continue to push earnings higher. I also think its huge stable of market-leading brands and wide geographic wingspan make it a winner. Soaring disposable incomes in emerging regions could light a fire under group revenues.
Sure, the company still commands a fatty premium — it trades on a price-to-earnings (P/E) ratio of 19.2 times for the new financial year beginning in July. But I think the drinks maker is worthy of a princely rating.
Royston Wild owns shares in Diageo.
What it does: easyJet is a low-cost airline carrier and package holiday company with a primary focus on European markets.
An 80% improvement in revenue to £2.7bn during the first half of the year and a 41% uptick in passengers to 33.1m are encouraging signs.
Higher fares and costs for ancillary extras, such as baggage, aren’t dissuading holidaymakers so far. The company’s revenue per seat is currently running 20% higher than the prior year.
The business faces risks from possible fuel price shocks in an uncertain geopolitical climate. However, easyJet’s taken steps to mitigate this by hedging 69% of its fuel for the rest of the financial year.
Overall, I think bookings will remain high despite the cost-of-living crisis. After ramping up capacity, easyJet is well positioned to capitalise on this trend. I think the shares could fly higher if the company enjoys a strong summer.
Charlie Carman owns shares in easyJet.
What it does: Intuitive Surgical designs and distributes robotic surgery machines to hospitals and clinics worldwide, enabling minimally invasive care.
As of the end of March this year, 7,779 of its da Vinci machines have been deployed in hospitals and clinics worldwide. However, the firm doesn’t merely sell its machines and move on. Instead, customers constantly have to return to Intuitive and repurchase consumable attachments for these devices, such as scalpels.
This locks hospitals into Intuitive’s ecosystem, creating a highly lucrative razor-and-blade business model. So, it shouldn’t be surprising to hear that growth continues to expand at a double-digit pace, with sales reaching $1.7bn in the first quarter of 2023 alone. $986m of that came from the various instruments and accessories used in combination with its machines.
With the cost of robotic surgery dropping each year, its adoption has been slowly accelerating. And so far, it looks like Intuitive Surgical will continue to dominate the market for many years to come.
Zaven Boyrazian owns shares in Intuitive Surgical.
What it does: Kraft Heinz is a packaged foods company, best known for its ketchup, cheese, and baked beans.
First of all, it has a business that is easy to understand. Demand for its products is likely to remain steady through macroeconomic fluctuations.
Second, it has a couple of competitive advantages. The first is its size, giving it an edge in terms of costs and the second is its brands, which command space in most supermarkets.
Third, the stock has been selling at a decent price lately. It has a dividend yield above 4% and I think there’s scope for returns to be higher in future.
Inflation remains a risk, but this is subsiding in both the US and the UK. So I’ve been adding to my stake in Warren Buffett’s seventh biggest stock investment.
Stephen Wright owns shares in Kraft Heinz.
What it does: Nvidia is an artificial intelligence (AI) company that manufactures and designs computer hardware and software.
The AI sector is set to boom in the years ahead, with Nvidia leading the revolution.
Its Q1 results showed its potential, with the firm posting a strong set of results. However, it was its forecasts for Q2 that really took the market by storm. For the period, revenue is expected to come in at $11bn, 50% higher than what Wall Street had predicted. In my opinion, this signals just the start of what could be exciting years ahead for the industry and Nvidia.
The stock may look expensive to some, understandably, with a price-to-earnings ratio of over 200. However, this is cheaper than a host of its competitors.
The Nvidia share price has been on a steady rise since its results announcement. And I intend to continuously increase my position in the months ahead. Should the stock dip, I’ll be rushing to buy more.
Charlie Keough owns shares in Nvidia.
The Property Franchise Group
What it does: Property Franchise Group is the second-largest estate agency network in the UK. It operates a range of brands on a franchise model.
Strong growth in lettings activity over the last couple of years mean more than half the company’s income now comes from rentals. This proportion is expected to continue growing.
High profit margins are another attraction. As a franchise business, the group generates fees from franchisees without the cost of running physical branches. Property Franchise’s operating margin was 34% last year.
Profits have doubled since 2019 and management are continually recruiting new franchisees. Notably, the group acquired the Hunters agency brand in 2021.
There are obviously risks in the current market. A big slump would still hit profits. But Property Franchise shares trade on just 12 times forecast earnings, with a 4.4% yield. That looks decent value to me.
Roland Head owns shares in Property Franchise Group.
Taiwan Semiconductor Manufacturing Company
What it does: TSMC is the world’s biggest chip foundry. It manufactures and designs a variety of advanced chips for the world’s largest tech companies.
By John Choong: The recent AI hype has seen the valuations of AI-related stocks rocket in value. This has resulted in many of those stocks also being overvalued. However, there are still a few companies who stand to gain as much as the likes of Nvidia and Microsoft, but are still trading on relatively cheap multiples — and one such company is Taiwan Semiconductor Manufacturing Company (NYSE:TSM).
The foundry is the direct manufacturer and supplier for Nvidia’s chips. As such, it’ll be a direct beneficiary of Nvidia’s tremendous potential in the AI space. And with most of its clients like Apple now moving into smaller nanometre chips (3nm), the gap left behind will be comfortably filled by Nvidia’s demand (5nm).
Pair the above with rebounding chip demand over the next year and beyond, and TSMC can expect its revenues and profits to increase monumentally from here. Considering its current and forward multiples, TSMC stock is extremely cheap in relation to its AI-related peers, and has been one I’ve been buying.
John Choong has positions in TSMC.
What it does: This FTSE 250 company is a British housebuilder, with a private market and affordable homes business.
By Dr James Fox. As a value investor, I’m on the lookout for companies that trade at low multiples, but have a clear route to growth. For me, that’s Vistry Group (LSE:VTY). It trades at just 5.6 times earnings.
Housebuilders, as a whole, are down due to concerns about market. House prices fell 1% over the year, during which cost inflation was running near double digits. But it’s been nowhere as bad as forecast.
For me, the concerns have been more than priced in. Moreover, Vistry has been somewhat insulated by its partnerships or affordable homes business. The government is actually trailing its affordable homes target. So there could be a further boost for this side of the company’s operations.
Of course, even higher interest rates won’t be good for private sales. However, Vistry remains a very attractive opportunity with an above-average 7.2% dividend yield. And that’s why I’ve been buying more.
Dr James Fox owns shares in Vistry Group.