The best stock ideas for September 1

Topgolf Callaway is perfectly positioned to benefit from the growing golf industry that is rapidly extending beyond traditional golfing venues and reaching new sets of players. The firm has grown its share of hard goods from 14% to 25% and golf balls from 8% to 21% since 2012 thanks to market consolidation. The recent acquisition of Topgolf has massively increased Callaway’s market, as not only does it resemble a mix of bowling alley, nightclub, and driving range, but it also reported revenues in 2021 on par with Callaway’s entire golf equipment business. Topgolf is predicted to add 3-4 million new golf participants for every 11 venues opened and 75% of non-golfers report being interested in trying the sport after using a Topgolf venue. Despite currently trading around $17, investors might be undervaluing the actual potential of the sport's expansion. The intrinsic value of the Callaway share by 2025 is estimated to be around $44, representing an anticipated upside of approximately 150%.

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The author is bullish on Northeast Community Bancorp Inc (NECB) due to its strong operational performance, such as an impressive bottom line and loan growth, driven by rising interest rates. NECB operates in the regional banking industry, offering a diversified portfolio of financial services. A significant proportion of its loans are targeted towards the construction sector, a risk that is mitigated by the incentives for expansion and investment brought on by declining interest rates. The valuation is attractive with a price/book ratio of 0.82, and the author predicts a price target of $24 for FY2023. Furthermore, the author sees potential for an earnings multiple that's the same as the sector, raising the potential for nearly 100% upside. Despite risks associated with a small market cap leading to volatility and a hefty reliance on the construction sector, NECB's appeal lies in its potential to increase dividends, buyback program which could acquire around 10% of the outstanding shares, and overall solid business fundamentals.

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Fleetcor is a tech company growing at double digits whilst trading at historically low multiples, and thus presents an opportune moment for investors interested in potential long-term gains. The company aids businesses in their payment operations (expense management and corporate payments) and has resilient recurring income due to its subscription-based model. They are known for generating value from investments, consistently showcasing a 10% Return on Invested Capital (ROIC) across the decade. The revenue, hampered by the COVID-19 pandemic, is expected to recover with FY2023 projected to witness 12% growth. While Fleetcor bears risks due to its dependence on third-party services and its indebtedness, its competitive advantages built via networks of partners and switching costs for clients promote its sustainability in the market. The company has maintained a customer retention rate of 92% in FY2022. Despite potential competition from Visa and Mastercard in the B2B payment sector, Fleetcor's stronghold of the market and large-enough fragmentation to accommodate competitors reduce such risks. The valuation presents Fleetcor at a fair rate, providing an opportunity for approximately a 19% compound annual growth rate over the next five years, making it an appealing choice for investors.

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Analyst Sean Dunlop maintains a neutral view on Dollar General following the company's lackluster earnings and reduced guidance. The core customer, typically earning less than $40,000 per year, is currently affected by inflation and has cut down on purchases. Despite these challenges, Dunlop considers the issues to be temporary rather than structural, and asserts the company still has much potential. He anticipates that Dollar General's sales will align with the revised guidance. Bullish arguments for Dollar General include its broad network of stores, low prices, and resistance to digital incursion while bearish arguments encompass increasing retail competition and pressure from omnichannel retailers. Dunlop expects margin recovery to continue into 2024 and notes that while the earnings news has negatively impacted the market's perception of Dollar General, its longterm prospects remain promising.

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The author is bullish on Agnico Eagle Mines (NYSE: AEM) due to potential economic weaknesses that could force the Federal Reserve to cut rates, boosting gold prices, and hence, benefiting gold mining companies. The author expects AEM to particularly benefit from this due to its robust operational performance, strong balance sheet, and efficient mines. Despite production costs and challenges unfavorable to physical gold investments, the author believes there's potential in AEM due to its consensus price target being significantly higher than its current value. The projections include a longer-term gold target of $3000, which the author believes would significantly increase AEM's EBITDA. However, this growth is expected to take 2-3 years to realize.

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Tilray (TLRY) is a Canada-based company that cultivates and sells cannabis, exports to the global medical market, and sells CBD and alcohol. It's assumed to witness a consistent annual revenue growth over the next decade due to the acquisition of Hexo, expected price increases of about 3% per year, and the expanding legal markets for Canadian and International medical markets. Despite facing risks such as regulatory challenges and competition from the illicit market, the company is perceived favorably due to its better financial health and profitability than its Canadian peers, strategic SG&A spending, and lean business model. However, threats such as price increase limits due to the existence of illicit markets, potential higher taxes, and oversaturation in the Canadian market persist. Adding to uncertainties, Tilray has a weak balance sheet, yet carries low balance sheet risk, and faces investment quality as fair. The company does not pay dividends or repurchase shares due to the early growth stage of the industry and has not yet achieved a positive free cash flow.

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