Mastercard, Plug Power, Match, N-able, and Oatly are among the best stocks to buy now according to some analysts.
“We still see a lot of upside,” said Wolfe analyst Steve Fleishman in a recent initiation note on the hydrogen fuel cell company.
Shares of the company have increased by more than 99 percent in the last year as the company seeks to capitalize on the transition to clean energy.
“We believe PLUG is the best-positioned name in the US hydrogen space, with broad fuel cell and electrolyzer product lines, further vertical integration along the value chain, and a series of key commercial relationships,” he said.
Fleishman stated that the company is in such good shape that he sees “multiple avenues for growth.”
“Plug already has a large materials handling business, as well as electrolyzers, fuel cells, and hydrogen production and distribution,” Fleishman wrote.
Plug is also a big winner from the recently passed infrastructure bill, according to the company.
Furthermore, Fleishman stated that, while other hydrogen companies are currently just “concept stocks,” Plug is likely to be the first to emerge with true growth potential.
According to William Blair analyst Jason Ader in his initiation note earlier this week, the sky is the limit for managed service provider software vendor N-able.
Since making its public trading debut on July 20 and completing its spinoff from information technology infrastructure firm SolarWinds, N-able shares have risen roughly 15%.
According to Ader, N-able is the right company at the right time, as many small businesses look to strengthen their digital security in the aftermath of the coronavirus.
“The challenge is that rising technology complexity, increasing security threats, and maintaining in-house IT expertise are beyond the comfort zone for many [small midsize businesses], resulting in the need for outside help and fueling growth in the [managed service provider] market,” he explained.
According to Ader, the company has “multiple avenues for N-able to sustain and potentially accelerate revenue growth,” including strong market penetration and new product launches.
The company also stated that N-special able’s remote monitoring and management software, known as RMM, is “best in class.”
Meanwhile, the digital transformation of small businesses continues, and this is one stock that is simply too appealing to pass up, he wrote.
According to a recent note from investment firm Guggenheim, buy the weakness in the Swedish oats products company.
Oatly shares are down about 14 percent since they began trading in late May, but analyst Laurent Grandet advises investors not to give up on the stock just yet.
Grandet wrote that the company is “uniquely positioned” because of its commitment to “sustainability, science-based oat expertise and manufacturing competitive advantage, and disruptive marketing.”
According to Grandet, consistent double-digit annual sales growth is also in the company’s future, as long as the company continues its aggressive capacity expansion.
The firm also praised Oatly’s second-quarter earnings released in mid-August, calling them “strong” and “generally consistent with what the company communicated during the IPO roadshow process.”
Grandet believes that the company’s better-than-expected earnings results should assuage investor concerns after an activist short seller accused the company of overstating revenue, which Oatly categorically denied.
“We see Oatly as a long-term growth story that is just getting started, with a 74 percent [compound annual growth rate] through FY23, based on our estimates, which is well above packaged food peers,” he wrote.
“The 2H pent-up demand thesis appears to be on track, with some caution still baked into 4Q guidance.” Given demographic tailwinds and increased adoption of online dating among the 620M global online singles ages 18 to 65, we see a long and growing runway (excluding China). Match’s diverse brand portfolio contributes to network effects and increases the value of online dating for consumers, while also providing MTCH with multiple growth opportunities.”
Cowen – Mastercard, Outperform rating
“We remain confident that MA has ‘future-proofed’ the business model, allowing it to benefit from new flows and solutions….” MA sees BNPL (buy now, pay later) as a complement to current payment options and as a growth driver as a single transaction becomes multiple. Future growth drivers include broadening acceptance to make the solution more widely available and developing ecosystem rules… B2B is the largest untapped new flow opportunity, with multiple avenues for growth including both the shift toward electronic payments and cash/check and addressing pain points in A/P flows.”
Wolfe Plug Power, Outperform rating
Most hydrogen names are currently concept stocks with small existing businesses, but they have huge growth potential as hydrogen becomes a driving force in the energy transition. We believe that Plug will be among the first to transition from a stock with a “story” to one with meaningful positive cash flow and long-term growth. Vertical integration and multiple growth paths… Plug already has a large materials handling business, as well as electrolyzers, fuel cells, and hydrogen production and distribution… We believe that PLUG is the best-positioned name in the US hydrogen space, with broad fuel cell and electrolyzer product lines, additional vertical integration along the value chain, and a number of key commercial relationships.
Outperform rating for N-able – William Blair
N-able provides a purpose-built SaaS suite for MSPs, anchored by best-in-class remote monitoring and management (RMM) software that serves as a sort of central nervous system for MSP stacks. We see numerous opportunities for N-able to sustain and potentially accelerate revenue growth. The challenge is that rising technology complexity, increasing security threats, and maintaining in-house IT expertise are out of reach for many SMBs, necessitating the need for outside assistance and fueling growth in the MSP market.”
Buy rating for Oatly – Guggenheim
“Oatly Group reported a strong second quarter that was broadly consistent with what the company communicated during the IPO roadshow process and was mostly in line with our and consensus estimates….” We continue to believe that Oatly is uniquely positioned with a defensible market position, owing to its emphasis on sustainability, science-based oat expertise and manufacturing competitive advantage, and disruptive marketing with a unique ‘in-your-face’ brand message to challenge the status quo. We see Oatly as a long-term growth story that is just getting started, with a 74 percent CAGR through FY23, according to our estimates, which is well above packaged food peers.”
Buffett best stock list
According to IRS data obtained by ProPublica, Weschler, now 59, managed to achieve a whopping 300,000 percent gain in his personal retirement account from 1983, when he started his first job, to the end of 2018.
Weschler told the Washington Post’s Allan Sloan that there is no direct overlap between his personal investments and the opportunities he seeks at his day job at Berkshire Hathaway. He told Sloan that his picks for the conglomerate usually have a minimum value of $500 million and do not require Berkshire to have a stake of 10% or more.
As of early 2019, Weschler, who joined Berkshire Hathaway in 2012, was in charge of $13 billion of the conglomerate’s $300 billion equity portfolio. A $500 million investment would amount to less than 5% of a $13 billion portfolio. In other words, a wager of less than $500 million would be insufficient to have a significant impact on the overall portfolio.
This bare minimum effectively excludes Weschler from the entire small-cap universe, where he found some of his winning bets for personal investments.
“The best bargains over the last year and today are in smaller and mid-cap companies that were once large but have been crushed. “He has far too much capital,” said Bill Smead, chief investment officer at Smead Capital Management and a Berkshire shareholder.
Weschler’s hands were effectively tied behind his back by ′′Buffett. He couldn’t do for Berkshire Hathaway what had made him famous as one of the world’s greatest investors,” Smead said.
Weschler did not respond to a request for comment.
Weschler disclosed a nearly 6% personal stake in Dillard’s, which has a $4 billion market cap, in October 2020. The stock has increased by more than 200 percent this year as a result of the economic reopening.
According to regulatory filings, Weschler also personally purchased Optical Cable Corporation in recent years. With a market capitalization of only $27 million, the company has gained 35% so far this year.
Berkshire’s smallest investment is in EW Scripps, which has a market cap of $1.3 billion. The conglomerate acquired a 30% stake in the media company in the first quarter of 2021, which required regulatory approval.
“His bets must be large enough to have an outsized impact on portfolio performance, but small enough to withstand a catastrophic loss,” said James Shanahan, Berkshire analyst at Edward Jones.
Although Weschler may not be able to go bargain-hunting for Berkshire, he did assist in the selection of stocks that drove growth in Berkshire’s portfolio.
Many believe that Weschler or Buffett’s other investment aide, Todd Combs, orchestrated many bets that deviated from Berkshire tradition in recent years. The conglomerate added a slew of IPO and pre-IPO investments, including StoneCo and Nubank of Brazil, Snowflake, and Paytm, India’s largest digital payments start-up. These stakes are all centered on Weschler’s sweet spot of $500 million.
Berkshire’s investments in Apple and Amazon were also most likely influenced by Weschler and Combs, holdings that played a key role in generating alpha and yielded billions of dollars in return.