Best stock ideas for September 6

The author has upgraded their rating for Lamb Weston from hold to buy, citing an attractive valuation after the stock's price dip. Despite the decline in organic volume, strong pricing across channels and strategic shift towards higher-margin businesses should enhance the company's long-term profitability. Additionally, the author refutes bearish arguments regarding soft volume, attributing this to temporary, cyclical factors. Projections point towards a volume recovery over time, leveraging cyclical factors and a potential boost from new production facilities in China and Idaho due by end of fiscal 2024. Although high expectations and weak demand led to a price dip, the author believes that this has reset market expectations and placed the stock below its historical ranges, indicating upside potential. Conservative estimates suggest a 35% one-year upside.

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Joseph Bonner, CFA, maintains a BUY rating for Salesforce Inc. (NYSE: CRM) and raises the target price to $275 from $250, following the 79% increase in non-GAAP operating income on 11% revenue growth in fiscal 2Q24. The company raised its FY24 revenue guidance by $150 million, implying almost 11% growth. Furthermore, Salesforce's January 2023 restructuring plan and changes to the board are believed to have been in response to increased interest from multiple activist investors. Despite the risks such as uncertain macroeconomic conditions which have reduced the demand for Salesforce products, Bonner views the company as a frontrunner in the digital transformation and cloud computing enterprise software market. He indicates that Salesforce's valuation recovery in 2023 from the 2022 market and tech sector selloffs and the recent acceleration of share repurchases point towards positive future performance.

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International Seaways (INSW) is recommended as a STRONG BUY due to favorable market dynamics and strong financial performance, according to the author's analysis. The author highlights the company's increased Time Charter Equivalent (TCE) revenues of 55% YoY in Q2-2023, strong cash flows, and a healthy debt structure. The Q2 revenue increase was powered by an increase in tanker day rates and a mismatch between tanker demand and supply – a factor expected to continue benefiting INSW. The author forecasts increasing oil demand and decreasing inventory levels as factors expected to sustain high tanker day rates. Upon peer comparison, it was noted that INSW was trading at a discount to similar oil/product tanker companies, adding to its attractiveness. However, risks to this outlook include disruptions to tankers' demand/supply dynamics and potential environmental regulations impacting the maritime sector. Despite these considerations, with an average target price of $58.1/share (representing a potential 39% upside), the author believes that INSW's financial strength and market environment make it a solid stock to own.

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The article discusses EQT Corporation, America's largest natural gas producer, with a bullish stance. The author highlights several favorable factors for EQT: increasing natural gas prices propelled by positive fundamentals, efficient operations, potential for LNG expansion, better pipeline access, downside-protected hedges, and a solid balance sheet. Despite a 14% rally in EQT shares since the author's previous article, they see more potential upside, expecting a sustained increase in natural gas prices. They cite a boost in U.S. natural gas production in the Permian Basin and increased demand for LNG fueling EQT's growth. The author points out EQT's efficiency in production and manageable levels of debt, suggesting that investors are in a 'great spot' due to a promising free cash flow outlook and committed strategies towards shareholder return. With these cumulative factors considered, the author considers EQT as a low-risk choice for conservative investors with a potential to soar up to at least $60 if the ongoing oil and gas bull market persists.

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AirIQ is a small-cap, but growing and profitable business based in Pickering, Ontario trading on the TSX Venture exchange and may likely go unnoticed due to its size. The firm boasts high insider ownership and the majority of its revenues are recurring. Despite suffering a setback in sales in 2020 due to industry changes, sales have been reaccelerating and so has the gross profit. Operating margins have remained stable and even increased over time, suggesting a strong management team. AirIQ operates by selling hardware to new and existing customers and then selling recurring revenue software that acts as a platform for businesses to monitor and track their data regarding asset monitoring. Despite its size and relative illiquidity, the business has created value for its shareholders over the long term with total shareholder returns of over 800% in the past decade.

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Cameco Corporation (CCJ), the largest publicly traded uranium producer, has been identified as a crucial player in the global climate goals given its position in the Western uranium supply chain. Amid rising energy demands and geopolitical issues impacting access to stabilised uranium supply, CCJ could become more important as Western nations are heavily reliant on uranium imports from Russia, an unpredictable and geopolitically charged source. Coupled with this advantage, the company recently reported healthy financials, including $2.5 billion in cash and only $1 billion in total debt. The increasing global support for nuclear power, backed by government policies and corporate decisions, suggests the uranium industry needs to invest more in capacity, thus supporting the bull case for Cameco. Furthermore, Cameco has robust long-term delivery commitments extending to 2040, a strategic approach to contracting and production, and it plans to increase production in response to heightened global demand. The author acknowledges valuation challenges associated with predicting future supply shortages but believes that the company's strategic positioning, growth prospects in supplying nuclear energy, and financial strength make it a promising investment. The author suggests a price target of $50 to $60 for the stock within the next 12–24 months.

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