Investing alongside you, fellow Foolish investors, here’s a selection of stocks that some of our contributors have been buying across the past month!
Alpha Group International
What it does: Alpha Group is a currency risk management and alternative banking solution for small and medium-sized businesses.
By Zaven Boyrazian. The landscape of the corporate financial world is shifting slowly, with companies like Alpha Group International (LSE:ALPH) making waves. What started out as a currency risk hedging service for international businesses has begun to evolve into a fully-fledged alternative banking solution.
Following the continued double-digit growth across all its segments in its full-year earnings report, I decided to top up my position. And looking at interim results since Alpha is still blasting away.
Total customers are up from 975 to 1,089, and alternative banking accounts jumped 75% to 5,350, pushing total revenue 20% higher to £55m.
With management rapidly expanding headcount, profitability did take a small hit. And the group is no stranger to operational risks. After all, currency risk hedging can backfire if executed poorly. Not to mention that larger institutions aren’t sitting idly while Alpha attempts to steal market share.
However, cash flow generation remains impressive, and I’m confident that Alpha has plenty more room to grow.
Zaven Boyrazian owns shares in Alpha Group International.
What it does: Ashtead Group is a major player in the rental equipment market on both sides of the Atlantic Ocean.
By Royston Wild. I’ve used recent share price weakness as an opportunity to top up my holdings in Ashtead Group (LSE:AHT). This is the second time in three months that I’ve used some spare cash to increase my position in the FTSE 100 firm.
Shares in the rental equipment business are suffering on signs that the US economy is cooling (Ashtead makes the lion’s share of its earnings Stateside). A stream of interest rate hikes are having a clear impact, and the Federal Reserve may not be done yet following higher-than-expected inflation in August.
But this doesn’t deter my enthusiasm for the stock. I invest for the long term and expect the company to generate excellent returns as it expands. Ashtead’s strong balance sheet certainly gives it scope to continue growing through acquisitions. Its net debt to EBITDA ratio stands at just 1.6 times.
The FTSE company trades on a forward price-to-earnings (P/E) ratio of just 14.5 times. This is well below historical norms and makes the stock a brilliant bargain buy right now.
Royston Wild owns shares in Ashtead.
What it does: easyJet is a British multinational low-cost airline group. It operates domestic and international services on almost a thousand routes across Europe.
By John Choong: easyJet (LSE: EZJ) shares have fallen off their highs this year and remain firmly below their pre-pandemic levels. As such, I’ve been taking this opportunity to buy more shares of the stock as travel demand continues to rebound strongly. easyJet recently posted record profits, and its holiday business is scaling up fast. And with the stock at attractive valuations, I can even see a path back to the FTSE 100 which would boost its share price.
Nonetheless, risks do linger from higher fuel costs and airport disruptions. But easyJet’s strong cost discipline from fuel hedges and robust demand suggest it can power through these challenges without seeing a dent in its profit growth. With the stock down 17% from its peak, I believe easyJet shares still have plenty of room to run as demand for travel shows no signs of cooling despite the cost-of-living crisis.
John Choong has positions in easyJet.
What it does: Hargreaves Lansdown is a Bristol-based brokerage, providing the UK’s most-used investment platform.
By Dr James Fox. I’ve recently topped up on Hargreaves Lansdown (LSE:HL.), and it’s now my largest holding. I’d been forecasting that earnings would come in hot this year, and they did. Underlying diluted earnings per share rose 47% to 74.3p, way ahead of consensus.
While there was an uptick in investor activity towards the end of the period, the real tailwind was returns on cash. Hargreaves lends its clients’ cash out to the market, thus benefiting when interest rates are elevated.
However, I’m investing for the ‘optimal conditions’ which I expect to be achieved over the medium term. With interest rates moderating to 2-3% over three years, Hargreaves still expects to achieve a 150-190 basis point margin on clients’ cash deposits at that level.
This should be complemented by improving investor sentiment, although, as the firm highlighted, an uncertain economic backdrop could continue to hamper client growth which fell to 67k for FY2023.
James Fox owns shares in Hargreaves Lansdown.
What it does: JD Wetherspoon operates a chain of pubs and a smaller hotel business, primarily in the UK
Why did I decide to buy even though the shares had already become markedly more expensive than a few months ago?
Despite the rise, the shares remained 46% cheaper than five years ago. Yet in many ways I think Spoons is in better shape than it was back then. Sales have hit a record high. The company’s value focus should help it win more custom as the economy struggles. I also expect more competitors to shutter their outlets, something that could help Spoons build market share.
It faces many of the same pressures they do, such as high energy prices and difficulties finding staff. On balance, though, I see the shares as a bargain given the company’s proven business model and large customer base.
Christopher Ruane owns shares in JD Wetherspoon.
Pershing Square Holdings
What it does: Pershing Square is a holding company that gives investors exposure to the hedge fund run by Bill Ackman.
In early 2020, his $27m hedge against the threat of Covid-19 turned into a mind-blowing $2.6bn windfall as markets went into meltdown. This 100-fold return in one month helped deliver a 70% return in his fund that year.
Now, there are many risks here. Chief among them is the extreme concentration of the portfolio (currently just 8 stocks). So, like with Warren Buffett, who has around 47% of Berkshire Hathaway‘s stock portfolio in just Apple, investors need to have confidence in Ackman’s investing acumen.
I do, and it’s apt to mention Buffett because Ackman has said that he wants to be remembered as having a long-term investing record similar to the Oracle of Omaha’s. He therefore sees Pershing moving towards the Berkshire model of owning whole businesses as well as stocks in future.
Therefore, I’ve bought the stock in my SIPP to see how much shareholder value Ackman can create over the next three decades.
Ben McPoland owns shares in Apple and Pershing Square Holdings.
What it does: Safestore is the UK’s largest self-storage unit provider, with 131 stores nationwide.
By Charlie Keough. After a 14% drop in the last month and over 20% year to date, I decided to open a small position in Safestore (LSE: SAFE). And despite its decline, I think there’s plenty to like about the stock.
Firstly, it looks cheap, with a price-to-earnings ratio of just 5.7. On top of this, it also offers a dividend yield of over 4%. In the last decade, its dividend has experienced a major 400% increase.
The firm has grown strongly in the last few years. And with its dominance in the UK market asserted, it’s now looking overseas into European expansion.
Its debt is the biggest concern I have with the stock. With interest rates at levels not seen for years, the impact of this on the price of property could also harm the business.
However, with strong growth and a passive income to tie me over, I saw it as a smart time to buy more of the stock.
Charlie Keough owns shares in Safestore.
What it does: Snowflake is a technology company that offers cloud-based data storage and analytics services via a Software-as-a-Service (SaaS) model.
One is that I see the company as a great play on the cloud computing/data revolution. In the years ahead, demand for cloud-based data storage and analytics services is only going to increase.
Another is that the company’s rate of growth is impressive. Last quarter (ended 31 July), revenue came in at $640m, up 37% year on year.
I also like the fact that there are big-name investors on board here. This is a stock that is owned by Warren Buffett, Brad Gerstner (Altimeter Capital), and Scottish investment management firm Baillie Gifford.
The valuation here is a key risk. This is an expensive stock with a high price-to-earnings (P/E) ratio.
However, with the share price currently about 60% below its highs, I think it’s a good time to be buying for my portfolio.
Edward Sheldon owns shares in Snowflake