Onto some lesser-known names, co-manager West highlights Progeny PGNY, -0.35%, a provider of fertility options for employees of large companies, in a market he sees only 3% or 4% penetrated. “They don’t have to grow at 20% plus anymore, it’s almost impossible because they’re over $100 billion in revenue, but you can grow high single digits to low double digits with their level of margins is a very powerful compound.” Their faith in Meta is down to its reach across platforms, that include Instagram, with more than 3.5 billion users, as it builds three of the four largest networking platforms. Trading at about 14 times 2024 projected earnings, Carlsen says Meta remains “very well capitalized, favorably positioned to re-accelerate revenue, and especially earnings, once advertisers become a little more confident in the macro.” Carlsen said they recently trimmed Meta after the stock bounced from last year’s pullback, but still hold a “meaningful position” in the social-media group. Now they’re pivoting into AI and stand a fairly good chance of displacing some of Google’s stronghold in search,” said Carlsen.Įarnings preview: For Microsoft, AI is the future, but the present is cloudyĪlongside Apple AAPL, +0.19% and Microsoft, the fund also owns Google parent Alphabet GOOGL, +0.53% and AMZN, -0.70%.Īnd then there’s Meta META, -0.05%, which will report on Wednesday, and has been owned by the fund since Facebook’s 2012 IPO. “They did a great job pivoting away from their PC centric business model selling software to client servers…then they pivoted from there into the cloud and have done extremely well. “Most of our companies fall into two categories - open-ended growth opportunities or wide-moat compounders that really dominate a niche,” said West, who says Apple AAPL, +0.19%, one of their holdings, could benefit from 4 or 5 such trends.īuffalo’s top holding is Microsoft MSFT, -1.40%, which they have held since the fund’s inception in 1995, when shares were worth $5 each. Then it’s down to competitive advantages, returns on capital and a strong management team. They look for companies benefiting from “broadly reaching secular growth trends” such as energy efficiency and automation diversified across sectors and based on “common sense,” that play out for the long term, he said.Īlso required, companies that are growing above GDP, with a sizable addressable market and a scalable business model. “The blind spot would be sticking with companies that need outside capital, that are losing money,” said Carlsen. That brings us to our call of the day from Buffalo Growth Fund’s BUFGX, -0.23% (institutional ticker BIIGX, -0.23% ) co-managers Dave Carlsen and Josh West, who talked to MarketWatch about their longstanding faith in some of tech’s biggest names, and offered a couple of new stock ideas.įirst some up-front advice from Carlsen, who warns that some investors may be blind to higher funding costs from rising rates and bank troubles, which means credit will tighten. It’s a jittery setup for stocks on Tuesday, with results coming later from Microsoft and Google parent Alphabet, sandwiched by plenty of other big results and consumer confidence data.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |