Top 5 Buys October 2024 🏰
5 Quality Businesses at a fair price ⚖️
Hi there partner!👋
Welcome to the October edition of Top 5 Buys ✅
You can access our Top 10 Buys 2024 list as a premium member here.
In this article, we will discuss our top stock picks for October 2024.
Let’s get into it 👇
The Market Sentiment: Greed is good.
The Fear to Greed index is pointing at the low end of greed, indicating that investors are willing to take on more risky assets and debt.
The S&P 500 is in a strong up-trend
The S&P 500 is in all-time high territory with an incredible uptrend this year.
The index is trading well above its 200-day moving average which was briefly touched in August.
What is a Good Buy? 🧠
We emphasize understanding the fundamentals before investing. If you prefer an in-depth analysis, check out our guide, trusted by over 300 investors. We also offer a free valuation cheat sheet for a straightforward approach to determining a company’s intrinsic value.
We assess a company's quality based on its business model, revenue generation, margins, return on capital, management, and competitive advantages. We then analyze its historical valuation to identify attractive buying opportunities.
Disclaimer: This is not investment advice. Always conduct your due diligence and make your own investment decisions.
Now, let's get into it 👇🏻
Top 5 Buys October 2024 💎
Wise PLC (OTC: W 0.00%↑ PLCF) 💳
Wise (formerly TransferWise) offers international money transfers and financial services for personal and business users, emphasizing transparency and low fees. Using real exchange rates, Wise’s digital platform streamlines cross-border payments and integrates multi-currency accounts, facilitating a global financial experience with fast and secure transactions.
Key fundamentals:
Gross Margin: 78.2%
Operating Margin: 34.1%
Return on Equity (ROE): 19.6%
Revenue growth (3Y): 49.7%
Earnings per share growth (3Y): 123%
Forward PE: 19.8
Why we like Wise PLC: The business model is highly scalable with a digital-first approach. Their transparent and cost-effective value proposition is appealing to a large segment of the money transfer markets. Wise is already active in +170 countries and has a strong market position and a known brand. The potential for Wise to continue to expand globally is still large, providing a large TAM potential. The massive growth in recent years compared with a high return on capital makes this an attractive investment opportunity.
Simple Discounted Cash Flow Analysis
Fair value estimate £9.96
Current price: £7
Upside: +42.3%
Expected CAGR: 15.5%
Assa Abloy (OTC: $ASAZF) 🔑
Assa Abloy is a market leader in access solutions, including door security, entrance automation, and digital identity solutions. Assa serves clients globally, driving innovation in multiple segments: building security and convenience, and integrating smart technology into locks, doors, and access control systems to enhance safety across sectors from residential to commercial.
Key fundamentals:
Gross Margin: 41.4%
Operating Margin: 16.5%
Return on Equity (ROE): 15.9%
Revenue growth (3Y): 16.7%
Earnings per share growth (3Y): 18%
Forward PE: 21.9
Why we like Assa Abloy: Assa is a strong market leader with sustainable organic growth and a well-executed acquisition strategy. The growing demand for door-opening solutions and specialized entrance automation technologies makes Assa an attractive investment case. Consistent growth and high return on invested capital make Assa a high-quality business to consider.
Simple Discounted Cash Flow Analysis
Fair value estimate $425.16
Current price: $334.1
Upside: +27.25%
Expected CAGR: 13%