Best stock ideas for September 27

Prescience Point is highly optimistic about AerSale Corporation (ASLE), projecting a bullish outlook due to impending Federal Aviation Administration (FAA) approval and initial orders (including a large order of at least 250 units) for AerAware, which they believe will boost its shares beyond $20 in the next 30-45 days, eventually propelling them to $45.90 over the next 12-18 months. The belief is that ASLE’s shares will almost triple during this period, driven by exponential rise in AerAware sales and a reacceleration of the growth in its core business. Significant insider buying, specifically a massive $2.2m share purchase by the CEO, reinforces this positive outlook. The company's developing product, AerAware - an enhanced flight vision system (EFVS), is on the verge of commercialization after four years of extensive testing with the FAA. Once approved, it will hold a monopoly position for several years. Recent, massive feedstock purchases indicate positive growth in the core business. FAA approval and an initial, large order for AerAware are expected to give ASLE's shares a drastic uplift in the short term, with potential for longer-term growth beyond $100 within three years. Despite potential risks like FAA certification delays and increased FAA scrutiny, the pending approval, competitive landscape, and strong market demand underline the potential for massive growth in ASLE’s stock.

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Equity analyst Suryansh Sharma believes U.S. real estate investment trusts, especially Vornado Realty (VNO), are due for a recovery. Sharma argues that the recent correction in REITs' share prices, largely due to higher interest rate worries and pandemic stress, overshoots market reality which presents an opportunity for patient investors. Dividend yields are now notably higher than historical averages. While the industrial REIT sector looks fairly valued, other sectors like offices, hotels, and malls appear discounted. Sharma identifies Vornado's ability to maintain a high-quality portfolio in markets with high potential capital appreciation as key to its long-term success. He acknowledges the challenges posed by pandemic-induced shifts in workplace dynamics, particularly in the office spaces market. Despite these challenges, Sharma asserts that office spaces will remain central to workplace strategies, with Vornado's Manhattan-focused portfolio poised to benefit from its vibrant business environment. Vornado's shares are currently trading at a discount of approximately 25% to Sharma's fair value estimate. However, risks include elevated levels of supply in Manhattan and reduced demand due to the proliferation of remote work trends. Concerns also lie around Vornado's retail portfolio struggling with an ongoing shift towards e-commerce. Yet, Sharma maintains his bullish stance on Vornado Realty.

Read the full article here (paywall). Read time: 14 min

The author of the article suggests that Invesco Ltd., an investment management company, is a worthwhile investment. The author presents a bullish view of IVZ despite seeing outflows in the first half of 2023. It has reportedly positive inflows from ETFs and Fixed income and its net outflows of ~$5B don't tend to cause durability issues when considering its total asset base of $1.5T. Invesco has strengthened its position as the 4th largest ETF issuer with its flagship fund the Nasdaq 100 ETF, QQQ, being key to its branding and fund-cross-sale strategy. Invesco trades at a substantial discount to BlackRock -- the asset management industry's golden standard. Despite some capital allocation issues such as the OppenheimerFunds acquisition, Invesco maintains that the effect has been priced in. The author suggests the market is underestimating the challenge of building a book of $1.5T AUM. The author acknowledges criticisms against Invesco, but ensures that the preferred shares relative to the OppenheimerFunds acquisition and the supposed debt tied to CIPs don't weigh down Invesco's financials. Coupled with satisfactory management actions, a good leverage ratio, and a 5.5% dividend, the author recommends Invesco as a simple and effective investment.

Read the full article here. Read time: 4 min

The author reiterates a 'Strong Buy' rating for Disney (DIS), despite recent performance not meeting expectations due to the ongoing transformation process under CEO Bob Iger. Amidst macroeconomic uncertainties, Disney has shown improved financial performance, with transformation plans leading to an expanded operating margin from 11.4% to 12.2%. The author expresses confidence in the strategic goals of the transformation, largely backed by Disney’s diversified portfolio and strong brand recognition. The Direct-To-Customer business unit also showed promise with sustained profitability. Despite losing subscribers due to price increases, the author supports Disney’s focus on quality content. The current risks include an increasingly constrained consumer spending capacity due to high interest rates and inflation, and potential issues with CEO transition in 2026. However, the author's valuation implies that Disney is severely undervalued with a 49% upside potential, making the stock a 'Strong Buy' despite noted risks.

Read the full article here (5 free per month). Read time: 4 min

The author argues that Corteva (NYSE:CTVA), a global leader in seeds and crop protection, is undervalued with a potential upside of close to 50%. They provide a bullish outlook, despite the company's competitive industry and recent headwinds. The author attributes Corteva's potential success to its innovative approach to addressing food scarcity, limited arable land, and greenhouse gas emissions. The development of the Enlist E3 soybean — a solution to hard-to-kill weeds that does not suffer from the herbicide drift problem that plagues other herbicides — is seen as a game-changer, expected to capture at least 55% of soybeans planted in the U.S. this year and potentially 60% next year. The author also noted that despite a 4% decline in organic sales in Q2, the company's earnings grew by 2%, with operating EBITDA margin expanding by nearly 140 basis points. Given Corteva's focus on innovation, strategic vision, and expected growth plans, it is well-positioned for 2024. However, the author also highlighted potential risks such as a potential economic downturn that could push the stock price down to $40.

Read the full article here (5 free per month). Read time: 5 min

The article is bullish on AutoZone, highlighting its leading position in the U.S. auto parts retail market, extensive store network, and strong growth in its commercial business. AutoZone's systematic expansion strategy, diversified product offering, investment in technology and distribution capabilities, and strengths in attracting DIY and do-it-for-me (DIFM) customers are key factors for its growing market share. Furthermore, AutoZone's plans for international expansion, primarily in Mexico and Brazil, add to its growth prospects. The author acknowledges the risks posed by Electric Vehicle adoption and the maintenance needs they present, though they believe AutoZone's strong position and continuous growth will mitigate these potential headwinds. The successful store openings are seen as a promising sign for sustained profitability. The company's share buyback program is also seen as noteworthy.

Read the full article here. Read time: 11 min