HomeMarket NewsThe Juicy Investment Pickings of April 2024

The Juicy Investment Pickings of April 2024

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Embarking into the realm of investing in 2024, shareholders have been gifted a bountiful 10.2% surge in the illustrious S&P 500 during the initial quarter. This staggering ascent mirrors the average yearly trajectory of the index. Since the conclusive moments of 2022, the S&P 500 has soared to an astounding 36.9%, prompting both concern over market overextension and conviction in further upward mobility.

In the maelstrom of market uncertainties, the unwavering path to wealth accumulation throbs with the beat of investing in steadfast companies and weathering the storms of volatility.

The Phoenix Tale of Toast’s Unyielding Potential

Anders Bylund (Toast): In the recent past, Toast, the divine purveyor of restaurant-management software and payment solutions, grappled with pitfalls. A maligned service fee structure, staff cuts, and a turnover in CEO tugged at investor confidence, plummeting stock values.

With a feast of innovative technologies at its core, Toast’s restaurant management marvel propels forth, unmatched and unrestrained. Despite the stumbles, Toast flaunts accelerating sales and burgeoning profitability. Its user-centric platform shatters the antiquated array of fickle, standalone tools in the culinary domain. Transitioning from catering to smaller businesses, Toast now captivates industry giants like Caribou Coffee, a Panera Bread cohort.

Envisaging a radiant future, Toast’s stock still stands undervalued. Despite a 33% uptick in share prices this year, it hovers over $40 below its peak in November 2021.

Trading merely at 3.4 times sales, while witnessing a 35% spike in sales on a yearly scale according to the latest earnings, Toast emerges as an opulent bargain. In the long haul, Toast is poised to conquer any self-inflicted turbulence, delivering resplendent returns to steadfast investors.

Viking Therapeutics’ Intriguing Allure as an Acquisition Target

Keith Speights (Viking Therapeutics): It would be a seismic shock if the bio-tech marvel, Viking Therapeutics, is not swooped up by a pharmaceutical behemoth before the curtains draw on 2025. While the tantalizing prospect of acquisition isn’t the prime directive to acquire this stock, the factors underpinning its allure as a takeover target render it a compelling proposition for intrepid investors.

Projections from Wall Street tip the obesity drug market to scale the monumental $100 billion summit by 2030. A prospect too lucrative for the majesties of the biopharma cosmos to turn a blind eye to. Viking, thus, emerges as a beacon in the investor’s skyline.

Charting a victory march, Viking unveiled outstanding results from a phase 2 endeavor on the injectable variant of VK2735. Stunningly, patients under the experimental drug witnessed a placebo-adjusted median weight loss up to 13.1% after 13 weeks of treatment. The reigning monarchs of the market—Novo Nordisk’s Wegovy and Eli Lilly’s Zepbound—couldn’t conjure comparable wizardry during their clinical forays.

If this wasn’t enticing enough, Viking recently heralded promising phase 1 achievements for an oral rendition of VK2735. This oral panacea pranced with a placebo-adjusted median weight reduction of 3.3% after a 28-day sojourn, all while flaunting a graceful safety profile.

The saga doesn’t end here. The saga transcends realms, delving into the galaxy of Nonalcoholic Steatohepatitis (NASH), a luscious market beckoning the luminaries of pharmaceutical lore. Viking primps VK2809 in a phase 2 soiree aimed at NASH, already unfurling statistically significant liver-fat shrinkage alongside an impeccable safety dossier. Viking primps itself to unveil 52-week biopsy results by mid-2024.

In the constellation of pipeline contenders, Viking emerges to potentially eclipse its meager $9 billion market cap. Majestic bio-pharma behemoths are likely nodding in agreement.

Brookfield Renewable’s Green Symphony

Neha Chamaria (Brookfield Renewable): The fervent buzz around India recently crescendoed when one of its titanic business conglomerates unfurled a 1-gigawatt capacity at a renewable energy coliseum. No ordinary fete, this gem stands as the world’s grandest renewable energy project, envisioning a colossal 45 GW operational capacity by 2030. India, with its fervent gaze on fulfilling 50% of its power needs from renewable sources by 2030, dances in the vanguard of clean energy ambition.

Bathed in this resplendent fervor lies Brookfield Renewable, waltzing through 20 nations with green hues lining its path. With shares of both Brookfield Renewable Partners and the corporate entity, Brookfield Renewable Corp., jostling at a 12% and 15% dip respectively over the previous three moons, investors are lured by the verdant prospects of this renewable energy stalwart.

Admirable traits adorn Brookfield Renewable. Its diversified portfolio spans vast territories, embracing hydropower, wind, solar, and energy storage. Steadfast in its resolve, the company eyes investment of a minimum $7 billion in growth projects over the coming quinquennium. A lion’s share of cash flows already sprouts from long-term power contracts, instilling a bedrock of cash-flow stability. Yet, the germinating investments in growth herald swelling cash flows. Oscillating between 2023 and 2028, Brookfield Renewable confer certitude in amplifying funds from operations (FFO) per share by a minimum of 10% annually, breeding ample leeway for augmenting dividends by 5% to 9% each year.

What we witness here is the chronicle of a company treading the fertile domains of a propitious industry. Drenched in a sheet of financial robustness, their cash flows scale steadily, gifting shareholders with richer dividends year on year. At the dawn of this year, Brookfield Renewable unveiled record accolades for 2023, bolstering its dividend by 5%, heralding yet another year of opulence. With both strands of Brookfield Renewable parting with some ground in recent epochs owing to towering interest rates yet flaunting dividends yielding a minimum of 5.8% each, one can’t help but contemplate the allure of harnessing a few shares.

Unveiling the Financial Landscape: UPS and Procter & Gamble Stocks

UPS Stock:

Daniel Foelber (UPS): United Postal Service stock witnessed a rollercoaster ride recently. After its 2024 Investor and Analyst Day on March 26, the company presented a bleak outlook for 2024, leading to a downturn in investor sentiment. Despite projecting a promising 2026 with record revenue of $108 billion to $114 billion and a 13% operating margin, the journey to this milestone seems arduous, prompting many to offload their investments.

Previously riding the wave of pandemic-induced e-commerce growth, UPS found itself struggling to maintain its momentum. While the company delivered impressive results in 2022, its 2023 projections fell short, with revenue totaling just $91 billion and an operating margin of 10.1% against the initially forecasted $97 billion to $99.4 billion in revenue and a 12.8% to 13.6% operating margin.

The Aftermath:

The shift from an outperforming to underperforming status naturally spooked investors, and skepticism looms over UPS’s ability to achieve its 2026 targets. Despite the turbulent waters, UPS management meticulously elucidated the roadmap to recovery, shedding light on the feasibilities of its projections.

With a robust foundation and the backing of long-term growth drivers propelling the e-commerce and package-delivery sectors domestically and globally, UPS presents itself as an enticing investment opportunity, further sweetened by its generous 4.5% dividend yield.

Procter & Gamble Stock:

Demitri Kalogeropoulos (Procter & Gamble): The competitive landscape for consumer staples companies has seen a shift in sentiment on Wall Street, making it prime time to divert attention towards Procter & Gamble (P&G) this April. Welcoming two significant announcements, P&G is gearing up for its third-quarter update on April 19 alongside the unveiling of its 2024 dividend payout.

Despite the deceleration in sales trends, in line with industry peers, P&G’s profitability is on the rise, boasting stellar cash flow and a spike in earnings. Brands like Tide detergent and Pampers diapers have contributed to a 16% profit surge in the most recent quarter.

What to Expect:

Volume trends in April’s earnings report hold the key for P&G’s trajectory, particularly as price hikes begin to stabilize. The company is anticipated to continue its market share gains against competitors like Kimberly-Clark, maintaining its industry-leading operating margin.

Noteworthy is P&G’s impressive streak of 67 consecutive annual dividend hikes, hinting at another profitable April for dividend-seeking investors. With a global sales footprint, efficient operations, and a history of excellence, P&G remains a considerable play for those with a penchant for reliability amid a sluggish sales environment.

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