By monthly tradition, you’ll get an update on our Best Buys of the month.
What’s going on in the markets? And what are our favorite stocks?
Let’s become a little bit wiser today.
March 2025
In March, the S&P 500 decreased by 5.8%.
April didn’t start very well either (is this an understatement?).
The Fear & Greed Index indicates that we are currently in ‘Extreme Fear’ Mode.
The last two times the Fear and Greed Index was so low (extreme fear)?
September 2008 (during the Financial Crisis)
March 2020 (COVID-19 Pandemic)
Perfect. This is exactly what we want to see.
Market declines offer great opportunities to rational investors.
That’s exactly why we will add significantly to Our Portfolio next week (unless the market sharply recovers).
Best & Worst Performers
This overview shows you the best and worst performers in our investable universe.
Worst performers
The cheaper we can buy great companies, the better.
Novo Nordisk might start to become interesting for investors with a higher risk appetite.
Best performers
It’s great seeing that one of Our Positions did very well in April:
Spotlight: Terravest ($TSE:TVK)
How does the company make money?
TerraVest makes money by building and selling equipment used to heat buildings, store gases, and transport fuels.
For example, they make propane tanks, gas trailers, and heating systems that are used in homes, farms, and industrial sites.
Terravest also grows by buying other companies to expand their products and boost sales.TerraVest is a very steady, boring business. They benefit from very predictable cash flows.
The company grows its business by buying other small companies. Management of Terravest is known as a great capital allocator.
Most top managers have skin in the game.
This means:
They earn more if the company does well
They are motivated to help the company grow
In total, insiders own 21% of the business.
People who worked closely with the CEO Dustin Haw refer to him as a ‘star’.
The fundamentals of Terravest look like this:
Debt/Equity: 0.7x
Net Profit Margin: 8.2%
ROIC: 11.6%
Forward PE: 25.2x
Expected Long-Term EPS Growth: > 15%
CAGR since IPO in 2016: 42.8%
Since 2012, Terravest’s stock has returned 8,000% to shareholders:
Best Buys April 2025
Now let’s dive into our favorite stocks for April 2025.
I only mention companies that can’t be found within the Portfolio today.
I love the companies within our Portfolio, and I think most are still (significantly) undervalued.
As already mentioned, we will probably add to some positions next week.
5. KKR ($KKR)
How does the company make money?
KKR earns money by managing investments for clients and taking a share of the profits from private equity deals.As we just bought another Private Equity company, I wouldn’t immediately add a second one to Our Portfolio.
However, the fact that KKR declined almost 50% (!) from its peak is interesting.
I recently read the book ‘What It Takes: Lessons in the Pursuit of Excellence’ from Stephen Schwarzman, the founder of Blackstone.
Private Equity is a very interesting niche, and when done well, returns can be very lucrative.
The goal of KKR? Create a mini Berkshire Hathaway. They want to invest in great businesses they can own forever.
4. Zoetis ($ZTS)
How does the company make money?
Zoetis sells medicines and vaccines for pets and farm animals to vets and animal owners.Here’s a sad truth: we are spending more and more time alone.
In 2003, people spent 5 hours a day alone on average. And today? Around 7 hours.
In 2022, about 29% of homes in the U.S. had just one person living in them.
Back in 1960, it was only about 13%.
Loneliness is a serious threat to our society.
Here are a few root causes:
People are living longer
Many wait longer to get married
More people want to be independent
One way to offset loneliness?
Own a pet.
Pets are treated as full family members nowadays.
A company that benefits from this is Zoetis. They sell medicines and vaccines for pets and farm animals to vets and animal owners.
Since the beginning of 2024, the stock declined by roughly 25%.
This is surprising because 2024 was a strong year. Free Cash Flow even increased by 41.8%!
Today, Zoetis trades at a Forward PE of 24.9x, one of the lowest PE valuations in the past 10 years.
Now let’s dive into the Top 3.