How will stock market trading fare in 2024? Trends.be asks stock market observers about their preferred securities. This week: Rudy De Groodt, senior equity specialist at BNP Paribas Fortis Private Banking & Wealth Management.
1/ Ear
“After a very weak 2022 and a stabilization of both the intrinsic value and the stock price in 2023, 2024 could well be the year of Sofina’s resurrection.
“With interest rates falling, the private equity markets gradually thawing and the subsiding of the negative news flow around participations such as Byju’s, which the market has implicitly already written down completely, there are a number of powerful catalysts for the still significant holding discount of 20 percent reduction.
“Moreover, we expect that Sofina, as a traditional Belgian proxy for the Nasdaq, which is still fueled by generative artificial intelligence, will finally be able to catch up with a delay. Don’t forget that Sofina probably has the highest AI content on the Brussels stock exchange through its direct and indirect participations.
“Based on the too cheap valuation and the positioning of the group in a number of mega trends for this decade, all lights are gradually giving the green light for a revaluation of the share.”
2/ D’Ieteren Group
“This sustainable mobility player remains an interesting investment company in Brussels. In addition to the crown jewel Belron, which will remain a source of value creation in the portfolio for a long time, the other platform companies are also increasingly emerging as powerful growth and profit engines for the coming years.
“D’Ieteren’s rock-solid balance sheet also offers sufficient room to add one or two new growth platforms to the portfolio.
“Although the group is well on its way to exceeding its strong ambition by 2025, the share is still trading at a high holding discount of more than 30 percent. In other words: investors only pay for the value of Belron and get the rest of the portfolio for free.
“Here too, we expect a reduction in the significant undervaluation in the course of 2024.”
3/ Salesforce
“This American global market leader in CRM business software will remain one of our technology favorites in 2024 to respond to AI outside the Magnificent Seven. In the software segment, the group uses generative AI in all its cloud platforms for customer relationship management.
“After a period in which the operating profit margin has risen sharply, mainly due to self-help, we gradually expect a monetization of all those AI applications. As a result, we see an acceleration in turnover growth from 10 to 15 percent and a further increase in the operating profit margin from 30 to 35 percent. Despite the sharp price climb, that scenario still offers a lot of upside potential.”
4/ Microsoft
“With Magnificent Seven member Microsoft, we have chosen a defensive and dominant technology player in various segments, such as productivity software for computers, cloud computing via Microsoft Azure, gaming and cybersecurity.
“Thanks to the collaboration with OpenAI and the integration of generative AI into all the group’s applications, we expect accelerated revenue and profit growth in the coming years.
“With the rock-solid balance sheet, we also see continued significant share buybacks. Despite the increased share price, we still find the valuation of this AI player interesting as a long-term investment.”
5/ Veolia
“French Veolia benefits from trends such as urbanization, infrastructure investments, ecologically responsible water management, waste recycling and increasing legal regulations in favor of a more circular economy.
“A large part of Veolia’s activity is also in line with the EU taxonomy around water. The increased geographic footprint and strengthening of the water business following the Suez acquisition will support earnings, along with cost control, synergy and good resilience during economic uncertainty.
“Veolia will launch a number of deep dives organize its activities to eliminate the undervaluation of certain assets. Given Veolia’s substantial (and successful) operational diversification, this should help the sum-of the-partsreduction.”
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Read more about the favorite shares in our file
2024-02-12 21:37:43
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