Quick Note: The following table lists growth stocks with the most upside price appreciation potential versus consensus Wall Street Price Targets. To make the list, a minimum of 20% revenue growth rate is required (for this year and next). Enjoy!
Small, Under-the-Radar, High-Growth, High-TAM, SaaS Stock
The Software-as-a-Service company we review in this report has a lot of attractive qualities, including a leadership position in a large total addressable market (“TAM”) where growth is being driven by increasing cloud-based connectivity (i.e. the Internet of Things (“IoT”)). It’s also a “smid” sized company ($2.7B market cap) and trades at a compelling 3.1x forward sales. In this report, we review the business, the growth opportunity, the valuation and the risks. We conclude with our strong opinion on investing.
Ares Capital: Big-Yield BDC, Fortifying for the Storm
Ares Capital is a popular big-dividend (9.7% yield) BDC. It has a long track record of success in providing capital (financing) to diverse middle market companies. However, on a go-forward basis, you cannot feasibly underwrite all 490 portfolio companies Ares works with. Fortunately, Ares does it for you, and they’re good at it. Also fortunately, you do have the ability to assess the current market environment (i.e. the big macroeconomic challenges that are coming) and how it will affect Ares’ unique business (we also do this for you in this report). And after reviewing Ares in detail (i.e. the business, the financials, the risks), we conclude with our strong opinion on investing.
Quick Note: Non-Mega-Cap Chip-Stock Data
Quick Note: A lot of mumblings about mega-cap stocks due for some mean reversion and underperformance in 2024, following an amazing 2023 (so far). In the semiconductor space (i.e. chip stocks), mega-caps like Nvidia and AMD have dominated, and for good reason (i.e. their tie in to explosive growth in data centers related to Artificial Intelligence demand for chips). In this quick note, we share data on 60 chips stocks (including large, mid and small caps), and some thoughts on which names could benefit in 2024.
Quick Note: 100 Big-Yield REITs, Down Big
Quick Note: Sharing data on over 100 big-yield REITs, sorted by industry group. As you can see, performance has been horrendous over the last two years, for some groups more than others. The unusual 1-2-3 punch or rising interest rates, an uncertain economy and the winds of secular change (for example, work-from-home and online shopping) have all played a big part.
Quick Note: Big-Yield CEFs, Watchlist Data
Quick Note: Briefly sharing some updated data on big-yield CEFs on our watchlist. You’ll note a few standout for bigger than normal discounts and smaller than normal premiums (as per z-scores). Returns have been healthy for equity CEFs, but weak for bond CEFs (as interest rates have been rising). However, the interest rate environment is changing, and so are the opportunities going forward for bonds.
Eli Lilly: Despite Big Risks, Business is Strong
Indianapolis-based pharmaceuticals company, Eli Lilly (LLY) is a great business firing on all cylinders. Over the last five years, the shares are up over 400% and the dividend has more than doubled. And looking forward, the FDA’s new approval of diabetes drug, Mounjaro, to also address weight loss, gives Lilly added upside. However, the company faces a few big risks. In this report, we review the business, its blockbuster drugs, the dividend, share repurchases, valuation and the big risks. We conclude with our strong opinion on investing.
Visa: Big Dividend Hike, Massive Share Repurchases
Technology-driven payment processor, Visa (V), recently announced another big dividend hike (15.6%) and a massive $25B share repurchase program. And this industry-leading company is benefiting form the enormous digital payments secular trend. It also has one of the most impressive net profit margins you’re ever going to see. In this report, we review the business, the market opportunity, the valuation, the dividend and the risks. We conclude with our strong opinion on investing.
Realty Income: Only the Strong Survive
Realty Income shares are down 15% this year while the S&P 500 is up 15%. Aside from the strong performance of the “Super 7” mega-cap stocks that have driven the index higher, Realty Income (and REITs in general) have been plagued by higher interest rates and a changing real estate landscape. In this report, we review Realty Income’s business strategy (i.e. growth through acquisition), the big macroeconomic and secular headwinds the industry faces, dividend safety, valuation and risks. We conclude with our strong opinion on investing.
Top 10 Growth Stocks: Fear Creates Opportunity (November Update)
The market is turning ugly. Stocks are down as investors fear higher rates, and the fed remains petrified over inflation. However fear brings opportunity, especially as a few massive secular trends (such as digitization, the great cloud migration and Artificial Intelligence) remain fully intact. In this report, we share data on over 50 high-growth stocks (many of which are recently down big), and then briefly review the macroeconomic environment (including rates, monetary policy and secular trends). Finally, we rank our top 10 growth stocks, starting with #10 and counting down to our top ideas.
Top Performing Stocks YTD, Sorted by Market Cap
AGNC: Tempting 18.5% Yield, Know the Big Risks
AGNC is a mortgage REIT that offers a tempting 18.5% Yield. We typically don’t invest in mortgage REITs (because of the risks), unless they offer a particularly compelling opportunity, like AGNC seems to be right now. In this report, we review the business, the market environment, the current valuation, dividend safety and risks. We conclude with our strong opinion on investing.
Monolithic Power: 40 Top Chip Stocks, Ranked
The world is being “digitized,” and besides software, semiconductors are the "nuts and bolts" making it all happen (in datacenters, on devices, in the cloud and just about everywhere else too, considering the expansive "Internet of Things" ("IoT")). In this report, we share data on 40+ top semiconductor stocks, ranked by net profit margins (a particularly important metric in the currently challenging macroeconomic environment). We have a special focus on Monolithic Power Systems (MPWR) an "offense-and-defense" chip stock, including a review of its business, financials, valuation and risks. We conclude with our strong opinion on investing in semiconductors in general, and Monolithic Power in particular.
100 High-Growth "Digital Revolution" Stocks, Down Big
The digital revolution is perhaps the biggest secular trend today, and it is likely to continue (to the benefit of select companies) for many years to come. For example, software and semiconductors stocks are two big beneficiaries. In this quick note, we share data on over 100 software and semiconductor stocks with high growth (i.e. 12% revenue growth expectations for next year), plus we’ve included the “Super 7” mega-caps for comparison purposes too.
Despite 28 Years of Dividend Growth, This Materials Company is Hated
With an increasingly strong tie in to alternative energy, this materials company is absolutely hated right now. The shares are ~60% below their 52-week high, yet the dividend is safe (and growing for 28 consecutive years), and the shares are very undervalued. In this update, we review why the shares are down (plenty of news), what we believe the shares are actually worth (they have significant upside) and why we think the stock offers a rare (and highly attractive) opportunity for healthy dividend growth and dramatic share price appreciation.
PIMCO Bond CEFs: A Big Price Rally is Coming
With real interest rates finally turning positive (inflation has slowed) and fed rate hikes arguably over, there could be incentive for investors to move out of equities (i.e. putting selling pressure on stocks) and into fixed income. One area that may benefit significantly is bond Closed-End Funds. In particular, many bond CEFs currently trade at unusually low market prices as compared to their net asset values (as evidenced by the many very negative z-scores across the space).
Big Data: Climbing “The Wall of Worry,” Attractive long-term play in AI / ML
Like a lot of stocks that started trading publicly during the pandemic bubble, there has been a lot of skepticism associated with the one we review in this report. For example, naysayers decried that it wasn’t profitable (now it is), the company could never successfully expand from government to commercial (now it has), stock-based compensation was too high (now it’s not) and the whole big-data theme was dramatically overblown (however, machine learning and artificial intelligence are now big revenue growth drivers). In this report, we review the business, the financials, current valuation and risks. We conclude with our strong opinion on investing.
Innovative Staples Stock—Disrupting a Big Market
The innovative consumer staples stock we review in this report is involved in the creation, promotion, and distribution of functional beverages, liquid supplements and protein bars. We analyze its business model, market opportunity, financials, valuation and risks. And then conclude with our strong opinion on investing.
AI Will Supercharge This Attractive High-Growth SaaS Stock
The SaaS (Software-as-a-Service) business we review in this report was already benefiting dramatically from its leadership position in the massive digital revolution megatrend (which, by the way, is still in its early innings). However, by the very nature of the business (the company has immense well-organized data), Artificial Intelligence (“AI”) technologies will supercharge the value it brings to clients and the growth rate of its profits. In this report, we briefly review the business, its growth and valuation, and then conclude with our strong opinion on investing.
Meta AI: Sustaining the Money-Printing Machine?
Meta (META) makes money through advertising on its four main assets, Facebook, Instagram, WhatsApp and Threads (they’re all basically communications aps). But how will the business be disrupted by newly emerging (and rapidly accelerating) Artificial Intelligence (“AI”) technologies? We answer that question in this report, as well as review Meta’s growth, valuation and competitive advantages. We conclude with our strong opinion on investing.