Investing alongside you, fellow Foolish investors, here’s a selection of stocks that some of our contributors have been buying across the past month!
Crocs
What it does: Crocs is the owner and distributor of footwear sold internationally under brands including Crocs and HeyDude.
By Christopher Ruane. I do not like Crocs (NASDAQ: CROX) shoes. But I do like the business.
Last year the iconic footwear firm saw revenues climb 14% while net income surged 46% to $793m. The current market capitalisation of $9bn makes the shares look cheap in my opinion.
The business benefits from strong international revenue growth (24% in the first quarter), positive momentum for the Crocs brand and increasing sales in other product lines such as HeyDude. I think there could be more value in this company than the current share price suggests.
Generic rivals to its core range of simple footwear is an ongoing risk to sales and profits. A weak retail environment in the US market could also hurt demand.
But Crocs is highly profitable and has a well-established business I think could keep growing. It is paying down debt and I expect it to continue buying back shares this year.
Christopher Ruane owns shares in Crocs.
Joby Aviation
What it does: Joby Aviation is an electric vertical take-off and landing (eVTOL) aircraft company building an air taxi service.
By Ben McPoland. I recently bought a few more shares of Joby Aviation (NYSE: JOBY). The Toyota-backed firm has built an electric air taxi designed to carry a pilot and four passengers. These eVTOLs fly at speeds of up to 200 mph and are near-silent, meaning there’s far less pollution and noise.
It plans to begin its ride-hailing service next year, initially in New York and Los Angeles. With partners Delta Air lines and Uber, it aims to reduce commutes between John F. Kennedy Airport and nearby areas from 1 hour to 7 minutes.
It has also signed an exclusive agreement to provide air taxi services in Dubai and sell aircraft to Mukamalah, the aviation arm of Saudi Aramco, which will introduce eVTOL aircraft to Saudi Arabia. Joby also delivered the first ever electric air taxi to the US Department of Defence last year.
Now, this is a high-risk stock because the innovative company is pre-revenue and still has to get the final sign-off from regulators to begin commercial operations. Perhaps there will be delays. But the firm remains well-capitalised, with $924m in cash on the balance sheet at the end of March.
Ben McPoland owns shares in Joby Aviation.
Realty Income
What it does: Realty Income is a US real estate investment trust that leases a portfolio of retail properties.
By Stephen Wright. I’ve been buying shares in Realty Income (NYSE:O) recently. The company has an outstanding track record of dividend increases and I think it can be a good source of income going forward.
The current dividend yield is 6%. That’s high compared to where it has been over the last decade and I think there’s a real opportunity at the moment.
Things have been tough in the industry lately. And the latest news is that Walgreens Boots Alliance – one of the companies biggest tenants – is planning on closing some of its stores.
Walgreens might be one of Realty Income’s largest tenants, but it only accounts for around 2.5% of the total rent. As a result, the impact on the overall portfolio should be limited.
That’s the benefit of leasing to a diversified tenant base. It makes the company resilient and puts it in a good position to keep increasing its dividend going forward.
Stephen Wright owns shares in Realty Income.
Unilever
What it does: Unilever is a multinational consumer goods company. It has over 400 brands, including 30 Power Brands.
By Charlie Keough. I snapped up some shares in FTSE 100 giant Unilever (LSE: ULVR) last month. There are a few reasons why.
Firstly, I want to bulk out my portfolio with defensive stocks. I want the majority of my holdings to be companies that have the potential to provide steady returns over the long run. Unilever fits the bill.
I also think the stock looks like decent value at the moment, trading on 20.2 times earnings and below its historical average.
Then there’s its dividend yield. At 3.4%, it’s far from the highest in my portfolio. But it’s reliable. And to me, that’s incredibly important.
The risks are that Unilever tends to sell higher-end goods, which come at a price. Therefore, during a cost-of-living crisis, there’s the ongoing threat that consumers switch to cheaper non-branded alternatives.
But Unilever has strong branding and this gives it an edge. This showed in its latest results, where for the first quarter the business posted 4.4% underlying sales growth and 2.2% underlying volume growth.
Charlie Keough owns shares in Unilever.
Vesuvius
What it does: Vesuvius is a market leader in metal flow engineering, providing solutions to handle molten metal in iron and steel foundries.
By Roland Head. I added FTSE 250 member Vesuvius (LSE: VSVS) to my portfolio recently. In my view, this 108-year-old business looks decent value right now.
In a trading update in May, CEO Patrick André confirmed that he expected 2024 results to be in line with existing expectations.
Broker forecasts suggest profits are expected to return to modest growth in 2024, after last year’s decline. City analysts are predicting stronger earnings growth in 2025.
The big risk here is the company’s cyclical exposure. Demand for Vesuvius’s services is linked global construction and industrial activity. If this slows in major markets such as the USA or India, results could disappoint.
Personally, I think a cautious outlook is already priced in. I bought the shares on less than 10 times 2024 forecast earnings, with a well-supported 5.2% dividend yield.
At this level, I’m happy to collect the income and wait for market conditions to improve.
Roland Head owns shares in Vesuvius.
Xtrackers MSCI World Momentum UCITS ETF
What it does: Xtrackers MSCI World Momentum UCITS ETF invests in global shares that exhibit strong price momentum.
By Royston Wild. I’ve been seeking ways to diversify my portfolio in recent months. I’ve been looking for ways to manage risk and to grab a slice of some exciting investment opportunities.
Xtrackers MSCI World Momentum UCITS ETF (LSE:XDEM) is an exchange-traded fund (or ETF) I feel enables me to do this effectively. It holds shares in almost 350 different companies.
The fund is focused on the US — as I type, a whopping 68.5% of its capital is tied into New York-listed companies. Its five largest holdings are Nvidia, Meta, Amazon, Broadcom and Eli Lilly.
But as its name implies, it also takes a pan-global approach and has holdings in Japanese, German, Dutch and Danish stocks, among others. It also offers exposure to many sectors like semiconductors, software, banks and mining, providing my portfolio with added diversification.
As you can see, this Xtrackers product is highly exposed to several cyclical sectors. So if interest rates remain high, I could endure disappointing returns in the near term.
But over time, I think the fund could be an effective way to hit my investment goals.
Royston Wild owns Xtrackers MSCI World Momentum UCITS ETF.
