Investing alongside you, fellow Foolish investors, here’s a selection of stocks that some of our contributors have been buying across the past month!
Alphabet
What it does: Alphabet is the operator of Google and a leading innovator in advanced technology, including AI.
By Oliver Rodzianko. I recently increased my Alphabet (NASDAQ:GOOGL) holdings by 33%. I consider the firm to have an immense moat in online search and data. Additionally, I think its AI is going to be highly valuable over the long term.
Even considering the recent troubles with its Gemini model, where users have experienced counterfactual responses, the share price is too good for me to ignore.
Usually, technology firms trade at a valuation which is way higher than Google’s. I’m pleasantly surprised by this, and I consider the shares 20% undervalued.
Also, Alphabet is one of billionaire Bill Ackman’s biggest holdings. So, I’m pretty confident the investment is going to perform well over the long term.
However, I think the organisation could use a little more internal efficiency. Hopefully, its further integration of AI in the workplace will drive this, and the returns could be even better in the future than they have in the recent past.
Oliver Rodzianko owns shares in Alphabet.
Apple
What it does: Apple is a technology company that specialises in smartphones, computers, laptops, and tablets.
By Edward Sheldon, CFA. Apple (NASDAQ:AAPL) shares have pulled back recently and I have been buying a few more of them for my portfolio.
I’m not expecting Apple’s share price to surge in the near term. At the moment, the company is not generating a lot of revenue growth. Meanwhile, its valuation still looks quite full (the price-to-earnings ratio is about 24).
However, taking a longer-term view, I believe the shares still have a lot of potential. Around the world, Apple has around 1.5bn iPhone users. So, just wait until the company launches an artificial intelligence-enabled smartphone. I reckon this could propel revenues, and the share price, much higher.
I’ll point out that competition from rivals does present a risk, especially in China, where other brands such as Huawei and Oppo are having a lot of success.
I’m comfortable with this risk though. I’m backing Apple to fend off the competition and remain a top player in the global smartphone market.
Edward Sheldon owns shares in Apple.
Apple
What it does: Apple is a world leader in the consumer electronics industry. It’s best known for its production of the iPhone and iMac.
By Charlie Keough. Apple (NASDAQ: AAPL) was one of the first stocks that I ever purchased. Over the years, I’ve gradually been adding to my position.
I most recently bought some more shares for a few reasons. Firstly, I remain bullish on what Apple can do in the artificial intelligence space in the years to come.
It also recently upped its dividend payout to $0.25 per share, a 4% rise. Alongside that, it announced an additional share buyback programme worth $110bn, the largest ever buyback authorisation by a US company.
Flagging sales continue to be the biggest threat to the business. In China, which represented nearly 20% of Apple’s sales last year, revenues have taken a hit as spending has hit the brakes.
Nevertheless, Warren Buffett recently said the iPhone was potentially “the greatest product, of all time”. It’s for reasons like that I plan to hold the stock for a very long time.
Charlie Keough owns shares in Apple.
CRH
What it does: CRH is the largest supplier of building materials like asphalt and cement in North America and Europe.
By Royston Wild. Shares in CRH (LSE:CRH) have trended lower as expectations of interest rate cuts in the US have dwindled.
The building products supplier sources three-quarters of earnings from the States. So muted action from the Federal Reserve in the coming months could be a big drag on the company.
Yet this hasn’t dulled my appetite for the FTSE 100 stock. CRH — which supplies a wide range of building products in 29 countries — has significant long-term growth potential.
CRH should benefit from phenomena like rising urbanisation and decarbonisation across its global markets, and soaring infrastructure spending in the US.
Ongoing M&A activity gives it an excellent opportunity to capitalise on these trends, too. It made 22 fresh acquisitions in 2023 alone.
City analysts believe CRH’s share price will rebound strongly in the short term, too. The company has an average 12-month price target of £74.60 based on 19 brokers’ forecasts, up markedly from current levels.
Royston Wild owns shares in CRH.
Serco
What it does: FTSE 250 member Serco is an outsourcing group providing services in areas such as immigration, justice, healthcare and defence.
By Roland Head. Outsourcing group Serco (LSE: SRP) says it won £4.6bn of new business last year, supporting a year-end order book of £13.6bn.
The outlook for new contract wins also seems to be strong. Management says that Serco’s pipeline of potential new work rose by 28% to £10.1bn during the second half of last year – the highest level in a decade.
My analysis of Serco’s 2023 accounts suggests the group is on a solid financial footing at the moment. Debt levels are down and last year’s numbers show good cash generation, with improved profit margins.
The main risk I can see is that Serco could run into problems with a major contract, incurring big losses. I don’t see any sign of this at the moment, though.
Indeed, Serco shares look decent value to me on 12 times earnings. I think they could have further to go, and recently added them to my portfolio.
Roland Head owns shares in Serco.
TSMC
What it does: Taiwan Semiconductor Manufacturing Company (TSMC) is the world’s largest contract chip manufacturer.
By Ben McPoland. I recently added to my holding in TSMC (NYSE: TSM). Unlike rivals Intel and Samsung, it doesn’t design its own chips. Instead, it just manufactures them for others, including tech giants like Tesla, Nvidia and Apple.
This means it is agnostic as to who wins the AI race. If this technology is really going to transform every industry long term, then TSMC should certainly benefit.
In Q1, revenue grew 13% year on year to $18.8bn, while its net profit margin was an incredible 38%. The firm’s CEO said: “Almost all the AI innovators are working with TSMC to address the insatiable AI-related demand for energy-efficient computing power.”
Now, the firm is still seeing weaker demand in smartphones and electric vehicles. So one risk here is a slowdown in the AI boom, which could harm projected revenue growth.
However, TSMC remains a key enabler of the whole digital revolution. I don’t expect that to change. Meanwhile, the stock looks very reasonably priced at 20 times forecast earnings.
Ben McPoland owns shares in Tesla and TSMC.
