How are stock market trading faring now that interest rates appear to have passed their peak? Trends.be weekly asks stock market observers about their preferred securities.
This week it is the turn of financial economist Tom Simonts. The welcome one Channel Z-guest provides us with his for the second time this year picksbut hastens to say that the previous list is also still ongoing.
1/ D’Ieteren:
- Price: 156 euros
- Price target: 225 euros
The crown jewel Belron benefits from the increasing complexity of car windows, which are usually larger and more curved. The ADAS camera must also be recalibrated each time the windshield is replaced, which results in high margins. With Carlos Brito at the helm, the stock exchange seems to be the obvious next stop. The recent investments in TVH Parts and PHE also deserve attention, because both players in the aftermarket of car parts have a lot of growth margin, including through acquisitions. All together they ensure a strong dividend inflow to D’Ieteren, which can both pamper investors and further boost growth.
2/ Smartphoto
- Price: 25.9 euros
- Price target: 40 euros
Smartphoto is a beast. Compared to a market value of 100 million euros, there will be a turnover of 80 million in 2023. These figures must level out by 2026, with stable or increasing margins. And they have been famous for years: 17.5 percent EBITDA, 15 percent on equity, 30 percent on capital employed and 7 percent on free cash flow. Despite a buyback program of 1.5 million euros in 2023 and a 54 percent higher dividend (1 euro per share), the cash position increases by 5 million euros annually. Count on a new buyback program, a 10 percent higher dividend and continued sales and profit growth. Very unfairly underrated.
3/ AMD
- Price: $119.8
- Price target: $140
There has been weakness in demand for PCs and notebooks for some time, but the data center market has also been in the doldrums for a while. The bottom seems to be near, because customer inventories have shrunk sharply. But above all, AMD will gain market share from Intel and it just launched the MI300X chip as an alternative to Nvidia’s famous AI GPUs. This should help meet the skyrocketing demand, but also make cloud hyperscalers, such as Microsoft and Amazon, less dependent on one supplier.
4/ Samsung Electronics
- Price: $1,381
- Price target: $1,600
Samsung is known as a smartphone manufacturer, but its memory chips (DRAM and NAND) account for about 50 percent of the profit throughout the cycle. The DRAM market is an oligopoly, with a 45 percent market share for Samsung, which is now roughly working its way from the bottom. Furthermore, generative artificial intelligence not only needs powerful processors, but also a pack of memory chips to store the generated data. In the coming years, this should lead to an additional boost in demand for memory semiconductors.
5/ Insulet
- Price: $172.95
- Price target: $300
The weight loss pills from Novo Nordisk and Eli Lilly caused significant weight loss on the stock exchange among companies that treat the consequences of obesity and diabetes. Insulet has lost about 50 percent since May, despite even industry peer Abbott not buying into fears that GLP-1 drugs could sideline its glucose monitoring devices. Without an imminent market implosion, the demand for weight loss pills will go hand in hand with Insulet’s insulin pumps, among others. This is the best-quality and fastest-growing player, which should make 2024 a success after a rating upgrade by S&P and the reconfirmation of profitable growth prospects.
The full file of all favorite stock lists here
Last week:
2023-11-20 19:15:31
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