Top stock ideas for October 3rd

The author of the article is bullish on PGT Innovations (PGTI) because it creates windows and doors designed to protect against hurricane-force winds and debris, a need that consistently arises due to the recurring threat of hurricanes and tropical storms. The company is on its way to becoming a mid-cap company, with a market cap of $1.57 billion, only $430 million short of the official $2 billion market cap defining mid-cap companies. The author believes PGTI can achieve this within a year, given its low valuation and strong expected earnings growth. The outlook for growth is positive due to the expected 9.1% annual growth of the impact-resistant glass market, the 4.4% annual growth of the global window and doors market, and the company's strategic initiatives such as product diversification, geographic expansions, and partnerships. Despite the risk of spikes in raw material prices causing reduced profit margins, the author is optimistic about PGTI's potential to continue growing along with the expected industry growth. The one-year price target given by analysts is $35, which is 29% higher than the current price. The author believes this is achievable and that the low valuation of the stock and strong expected earnings growth are likely to drive the stock to reach this price target within the stipulated timeframe.

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

The author of the article maintains a 'Buy' rating for FMC Corporation despite the fall in its stock price by nearly 45% since an earlier bullish article. Even though the agricultural sector has faced significant challenges, like inventory de-stocking, increased interest rates, and adverse market conditions, the author sees these as temporary roadblocks. FMC's innovative product lineup and robust product pipeline are deemed resilient in the face of these challenges with signs of recovery evident as indicated by the 43% growth in new product sales in North America. The company's statements during a recent conference highlight improvements in inventories and retail levels. The author cites expectations of EBITDA margin expansion driven by input cost tailwinds, pricing adjustments, better product mix, and disciplined operating expenses. The company also boasts of a healthy balance sheet with a projected fall in net debt to 1.9x EBITDA next year. The company is expected to see a 14x EBITDA valuation as the market demand improves, with its stock value projected at approximately $131, doubling from its present level. The journey may have its challenges, but the author expects a doubling over the next 2-3 years.

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

Should I occasionally include these technical analysis short-term trade ideas?

FLEX has been volatile over the years, cratering to $1 in late 2008 and then recovering to almost $20 by early 2018. The stock then was pounded again, falling to $7 in October 2018. After a rally, the shares undercut 2018 lows during the pandemic. By early 2021, FLEX had rallied back to its early 2018 highs. The stock went sideways until October 2022 and then broke out to recovery highs in November. The shares hit $25 in January 2023, traced out a flag back to the 50-day, and then popped to $29 in July. FLEX now appears to be tracing out another bull flag. Moving average support is at $24.50, and we would put a stop-loss just below there. We would take profits at $30, with larger long-term gains possible.

Read the full article here (paywall). Read time: 2 min

The author believes Croda shares have limited downside given the low P/E of 24x 2023 earnings, which are expected to be a cyclical trough due to industry-wide destocking and the shrinkage of one-time COVID-related sales; there are signs of sequential improvement like Consumer Care volumes starting to recover from early-2023 lows. Over the long-term, the author expects Croda's earnings to rebound in 2024 and resume mid-to-high single digit growth, driven by its Consumer and Life Sciences segments achieving their margin and growth targets. The author also sees potential for a dramatic upward re-rating if investor sentiment turns more positive or a strategic acquirer emerges to buy Croda. Assuming only a modest 2023-26 EPS CAGR of 9% and a 2026 P/E of 28x, the author's base case forecasts a 58% total return by end-2026 (15.6% annualized), making Croda attractive given the limited downside.

Read the full article here. Read time: 9 min

The author provides a detailed overview of Portuguese hospitality company Ibersol, which operates a variety of food and drink franchises such as Pizza Hut, KFC, and Taco Bell in Portugal, Spain, and Angola. The author is bullish on Ibersol, and interestingly, the company's management are the largest shareholders, owning over 50% of the shares. The past few years have seen the company undergo significant changes, most notably selling off their Burger King restaurants last year for an amount equivalent to 80% of the company's enterprise value at the time. The funds from this sale have been used for various purposes, including share buybacks, debt repayment, and both organic and inorganic growth. The company also recently raised additional capital during the COVID-19 pandemic, which notably impacted their business. Despite these challenges, the company's core numbers remain strong, and the author is optimistic about their future potential. The author highlights the company's steady growth, strong performance in their concessions sector, consistent strategy, and positive impact from recent major transactions as key drivers of bullish sentiment.

Read the full article here. Read time: 5 min

Reply (Ticker: REY) has exhibited robust growth since its IPO in 2000 with revenue and EPS registering 10-year CAGRs of 14% and 20% respectively, a testament to its growth and high capital efficiency. The company's balance sheet remains healthy with low leverage and a net cash position that provides room for further investments, M&A and dividends. With the founding Rizzante Family still owning nearly 40% of the outstanding shares, the company demonstrates stability and its commitment to growth. In light of the growing demand for IT solutions, where the industry is projected to grow at a CAGR of 14% reaching USD 4.7 trillion in 2027, Reply is well positioned with a diverse range of services offered to various sectors. Strategic acquisitions and the ability to access additional customers, new markets and new talents and capabilities have further cemented Reply's growth prospects. Despite the lack of a mentioned price target or timeline, the author appears bullish due to the company's strong performance metrics, diverse offerings and prosperous market

Read the full article here (paywall). Read time: 7 min