Investors can own as many stocks as they want, whenever they want, and that’s a good thing. After all, more stocks means more diversification. With that in mind, The Motley Fool suggests owning at least 25 different stocks at any given time.
Sometimes it’s interesting to think about which stocks you would buy if you could only buy a small number of them. Such an exercise forces you to identify the most promising risk/return scenarios in the market.
With that in mind, here’s a look at the three stocks I would buy this year if I only had the room and money to add three more stocks to my portfolio. (Of course, these choices only make sense to you if they improve the diversification of your portfolio rather than making it less balanced.)
1. MercadoLibre
Free market (NASDAQ:MELI) is often called the Amazon from Latin America. The comparison is not unfair, but it is incomplete.
MercadoLibre is also related to eBay, ShopifyAnd PayPal. Its wide range of tools has helped the company become South America’s leading name in physical stores and e-commerce The company facilitated nearly $41 billion in payments in the first quarter of this year, while serving as an intermediary for $11.4 billion in sales of goods and services. Its revenue of $4.3 billion in the quarter increased 36% from a year earlier, leading to a 71% improvement in net income.
And that’s just the beginning. In many ways, South America today is where North America was some 20 years ago, when high-speed Internet was still relatively new and smartphones were still emerging. state of idea. In the same way that Amazon was in the right place at the right time with the right business model, MercadoLibre is well-positioned to capitalize on the mobile technology boom brewing in the region.
And that East Booming. According to market research firm GSMA, 75 million people in South America have become mobile internet users in the last five years alone, while Canalys reports that the region’s smartphone shipments jumped 26% year-on-year in the first quarter, following 20% growth in the fourth quarter.
Yet only 65% of the continent’s population currently uses a smartphone with wireless broadband capability. The rest are starting to take up the challenge. The GSMA estimates that mobile internet penetration in South America will reach 72% by 2030, with most of these connections expected to be ultra-high-speed 5G.
Because e-commerce is growing alongside consumers’ increasing ability to be online, Americas Market Intelligence predicts that the e-commerce market in Latin America will grow 24% this year, then 21% next year, then d match this pace again in 2017. 2026.
MercadoLibre is probably better placed than any other name to capitalize on this growth.
2. Alphabet
Few investors would deny that Google’s parent company Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) is still a force to be reckoned with. But many people also seem to think its fastest-growing glory days are over. The search engine industry is after all fully mature and full of credible competitors like MicrosoftArtificial intelligence powers Bing.
If you think Alphabet has run out of growth engines to exploit, think again. Its cloud computing business is one example. While it’s a fraction of the size of Amazon and Microsoft’s cloud businesses, the segment still generated 28% revenue growth in the first quarter of this year.
Better yet, Google Cloud is now consistently and significantly profitable, generating $900 million in operating profits in the three months ending in March. Mordor Intelligence predicts that the global cloud computing market will experience annualized growth of over 16% through 2029. Alphabet’s cloud segment is therefore extremely promising in terms of profits.
Ratings agency Nielsen says the company’s YouTube service is watched more in the U.S. than conventional streaming services like Netflix Or Walt DisneyIt’s Hulu and Disney+. YouTube’s revenue improved 21% year over year in the first quarter, as Alphabet continues to figure out how to make it a destination platform in a highly fragmented streaming space and often unprofitable.
Google Search advertising business may not be as stagnant as some think. Its advertising revenue grew more than 14% during the first quarter of the year, helped by the search engine’s sustained reach. According to GlobalStats, Google still powers about 90% of the world’s web searches, as it has for more than a decade.
Alphabet therefore seems more solid than ever. The fact that the stock is moving higher despite many concerns being expressed should tell you everything you need to know about what investors are predicting for its foreseeable future.
3. Bank of America
I would complement my limited number of stock picks for 2024 with a new position in Bank of America (NYSE:BAC).
Not an easy name to get excited about becoming a landlord right now. The stock has underperformed since the start of 2022, hampered by the economic malaise caused by skyrocketing inflation. Although high interest rates generally widen banks’ profit margins, the consequences of this dynamic are reduced demand for loans and more defaults and delinquencies.
Bank of America’s loan loss provisions rose to $1.3 billion in the first quarter, while net interest income fell 3 percent to $14 billion, pushing earnings per share down to $0.83 this year from $0.94 in the first quarter last year. Other businesses such as investment banking and investment management are also struggling.
However, what gets lost in all the noise is that nothing about the current challenges facing the banking sector is new. This is a highly (and predictably) cyclical business tied to an equally predictable cyclical economy.
We don’t know exactly when inflation will finally ease or when the global economy will start to grow again. TO DO Please note, however, that we want to be positioned in BofA before it becomes clear that this recovery is underway. Like most actions, this one tends to move predictively rather than reactively.
In the meantime, you’re signing on to a stock that pays a healthy, reliable dividend. While you can certainly find stocks with a higher dividend yield than Bank of America’s current forward yield of just over 2.4%, this major bank is protecting its business and balance sheet in a way that allows it to continue to finance its dividend payment and increase it.
Its annualized dividend payout of $0.96 per share is less than a third of this year’s expected earnings of $3.25 per share, and even slightly below next year’s estimate of $3.59. That’s a nice cushion for anyone looking for reliable investment income.
Don’t miss this second chance at a potentially lucrative opportunity
Have you ever felt like you missed the boat by buying the best performing stocks? So you’re going to want to hear this.
On rare occasions, our team of expert analysts issues a “Doubled” actions recommendation for companies they believe are about to break out. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:
Amazon: If you invested $1,000 when we doubled down in 2010, you would have $21,765!*
Apple: If you invested $1,000 when we doubled down in 2008, you would have $39,798!*
Netflix: If you invested $1,000 when we doubled down in 2004, you would have $363,957!*
Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.
*Stock Advisor returns June 24, 2024
Bank of America is an advertising partner of The Ascent, a Motley Fool company. Suzanne Frey, an executive at Alphabet, is a member of the board of directors of The Motley Fool. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. James Brumley has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet, Amazon, Bank of America, MercadoLibre, Microsoft, Netflix, PayPal, Shopify, and Walt Disney. The Motley Fool recommends eBay and recommends the following options: long January 2026 $395 calls on Microsoft, short January 2026 $405 calls on Microsoft, short July 2024 $52.50 calls on eBay, and short June 2024 $67.50 calls on PayPal. The Motley Fool has a position in Alphabet, Amazon, Bank of America, MercadoLibre, Microsoft, Netflix, PayPal, Shopify, and Walt Disney. The Motley Fool recommends eBay and recommends the following options: long January 2026 $395 calls on Microsoft, short January 2026 $405 calls on Microsoft, short July 2024 $52.50 calls on eBay, and short June 2024 $67.50 calls on PayPal. disclosure policy.
If I could only buy 3 stocks in 2024, I would choose these was originally published by The Motley Fool
