Investing alongside you, fellow Foolish investors, here’s a selection of stocks that some of our contributors have been buying across the past month!
Atalaya Mining
What it does: Atalaya is a copper miner operating in Spain. Its main asset is the historic Riotinto mine, where production restarted in 2014.
By Roland Head. I recently bought Atalaya Mining (LSE: ATYM) for my portfolio after the company’s stock pulled back from recent highs.
Broker consensus forecasts suggest earnings could rise by about 40% in 2024, leaving the stock on a forecast price-to-earnings multiple of less than 10 times. This valuation is paired with a prospective dividend yield of nearly 4%.
One recent setback is that 2023 production was slightly lower than expected. A repeat of this problem in 2024 could result in earnings dropping below forecasts. A fall in copper prices is another risk.
However, I’m encouraged by the company’s strong net cash position and its plans to move from the AIM market to a LSE Main Market listing. I reckon this could attract new institutional investors, supporting a higher valuation.
Atalaya is probably one of the riskier stocks in my portfolio, but I think this European mining business offers good value at current levels.
Roland Head owns shares in Atalaya Mining.
Dr. Martens
What it does: Dr. Martens is a boot-making company. It sells its products through wholesale and e-commerce outlets.
By Stephen Wright. The Dr. Martens (LSE:DOCS) share price has been falling since its IPO, and has carried on the same way in 2024. It’s reached a point now, though, where I see it as offering enough of a margin of safety to buy the stock for my portfolio.
This isn’t just stock market irrationality. The company has had operational failings in its shift to e-commerce and weak sales in North America have been weighing on revenues and profits.
Of course, there’s a danger that what I see as short-term headwinds could persist for longer than I’m expecting. But I think the company’s brand is genuinely valuable and this gives it decent long-term prospects.
The company announced at its last update that it was expecting revenues to decline this year, but I think that’s already priced into the stock at the moment. So I see it as a bargain and the more it falls, the more I like it.
Stephen Wright owns shares in Dr. Martens.
London Stock Exchange Group
What it does: London Stock Exchange Group is a diversified financial markets infrastructure and data business that operates through three divisions: Data & Analytics, Capital Markets, and Post Trade.
By Edward Sheldon, CFA. London Stock Exchange Group (LSE: LSEG) shares recently experienced a small pullback. And I took advantage of the share price weakness, buying more stock for my portfolio.
There’s a lot to like about this company from an investment perspective, in my view.
For starters, it now has plenty of recurring revenues thanks to its recent acquisition of Refinitiv. Companies with recurring revenues generally command higher valuations than those that have fluctuating revenues.
Secondly, it’s a play on artificial intelligence (AI). Recently, the company formed a partnership with tech giant Microsoft. And thanks to this partnership, it’s soon going to roll out a whole lot of AI-based features for its customers.
Third, the share price trend looks attractive. Not only is the stock in a strong uptrend but it has also recently broken out of a trading range it has been stuck in for several years.
It’s worth pointing out that London Stock Exchange Group does have an above-average valuation. Currently, the P/E ratio here is about 25.
I don’t think that valuation is crazy, however, given that the company is now a major player in the financial data space.
Analysts at Jefferies have a price target of 1,100p. That’s about 20% higher than the current share price.
Edward Sheldon owns shares in London Stock Exchange Group and Microsoft.
PayPal Holdings
What it does: PayPal is a global payment services company with a focus on digital transactions for customers and businesses.
By Oliver Rodzianko. I bought PayPal (NASDAQ:PYPL) stock because it’s down around 80% from its all-time high. While the firm arguably was overvalued at its peak, a fall of such magnitude seems unbalanced to me.
I looked into the financials of the company, and I was surprised. Revenue has been growing at 17% on average every year for the last three years.
Alex Chriss, the new CEO, will be leading an executive team focused on efficiency, profitability and customers.
The company’s earnings per share have already increased from below $2 in 2022 to $3.35 today, but the share price is yet to follow.
Of course, there’s a risk that new operational efforts won’t play out successfully over the long term. That’s why I’m only allocating a small amount of my total portfolio to the shares.
With a price-to-earnings ratio based on future earnings estimates of around 11, this is a steal to me.
Oliver Rodzianko owns shares in PayPal Holdings.
Taiwan Semiconductor Manufacturing Company
What it does: TSMC is the world’s largest semiconductor foundry. It manufactures a variety of advanced chips for third parties around the globe.
By Ben McPoland. I invested in shares of Taiwan Semiconductor Manufacturing Company (NYSE: TSM) in early January. On a company level, it was a bit of a no-brainer, as TSMC is the world’s largest contract chipmaker.
It produces the smallest and most powerful semiconductors for fabless chipmakers – tech firms that outsource manufacturing – such as Apple, Advanced Micro Devices and Nvidia. The fact TSMC never designs chips, only manufactures them, gives it an enduring competitive advantage because it doesn’t compete with its customers.
The main risk with the stock – an invasion of Taiwan by China – is well-documented. But any interruption to TSMC’s factory output would have severe consequences for the whole global economy. And I’m not selling my portfolio just because there is geopolitical risk.
The stock was trading at just 15 times forward earnings when I invested, which I found too cheap to ignore. The company is projecting revenue growth of 20% this year, even as the smartphone and electric vehicle sectors remain weak. This growth is being driven by massive demand for artificial intelligence chips, which is likely to continue for some time.
Ben McPoland owns shares of Apple, Nvidia, and TSMC.
