My favorite stocks for 2024
Start your 2024 the right way
2024 is just around the corner.
Are you still looking for investment inspiration?
Here are my favorite stocks for 2024.
Favorite stocks 2024
20. Mastercard ($MA)
Company Profile
Mastercard operates a payment network that connects banks, merchants, and cardholders.
They make money by charging fees to banks for using their network to process transactions.
Mastercard doesn't issue credit cards directly. Instead, they work with banks that issue cards with the Mastercard logo.
Investment rationale
Duopoly together with Visa ($V)
Pricing power and a very wide moat
Strong track record in creating shareholder value
19. Automatic Data Processing ($ADP)
Company Profile
Automatic Data Processing (ADP) is an American company that helps other companies manage their employees' payroll and human resources.
They provide services to handle things like paying employees, tracking work hours, and managing benefits.
ADP makes money by charging businesses for using their payroll and HR services.
Investment rationale
Excellent management with a great company culture
Example of a wonderful company at a fair price
Return since 1990: +8,477% (CAGR: 14.0%)
18. Judges Scientific ($JDG)
Company Profile
Judges Scientific is a company that acquires and operates businesses in the scientific instruments sector.
They own and manage a portfolio of companies that design, manufacture, and sell specialized scientific instruments and equipment used in research and industry.
Judges Scientific makes money by growing these acquired companies, which serve various scientific fields, such as physics, chemistry, and materials science.
Investment rationale
Excellent owner-operator stock. Founder David Cicurel is still the CEO today
Great margins and capital allocation skills
Judges Scientific is a 100-bagger since 2003
17. Watsco ($WSO)
Company Profile
Watsco is a company that specializes in distributing air conditioning, heating, and refrigeration equipment.
They work with contractors and dealers, providing them with the products and support needed for installing and maintaining HVAC (heating, ventilation, and air conditioning) systems.
Investment rationale
Albert Nahmad has been the CEO for over 50 (!) years
Serial acquirer with a decentralized business model
One of the strongest-performing American stocks over the past 30 years
16. Pool Corporation ($POOL)
Company Profile
Pool Corporation is a company that distributes swimming pools and related products.
They provide a wide range of items, including pool and spa equipment, chemicals, cleaning accessories, and outdoor living products.
Pool's business model involves being a wholesale distributor, connecting manufacturers of pool-related products with retailers and service providers.
Investment rationale
85% of their revenue is recurring in nature
Pool Corp. has won market share virtually every year over the past 2 decades
Return since 1995: +57,216% (CAGR: 25.2%)
15. Games Workshop ($GAW)
Company Profile
Games Workshop designs and sells games, miniatures, and accessories for hobbyists.
They make money by selling their products directly to customers through their own stores and website, keeping tight control over their brand, and fostering a dedicated community of gamers.
Investment rationale
Strong market leader in a niche
Management puts the creation of shareholder value first
Trading at a PE multiple of 22.4x (not too expensive)
14. Copart ($CPRT)
Company Profile
Copart is a company that operates an online marketplace for buying and selling used and salvaged vehicles.
They connect sellers, including insurance companies and individuals, with buyers like automotive recyclers, dismantlers, and other businesses.
Copart's business model involves facilitating the auction and logistics process for damaged and salvaged vehicles, providing a platform for efficient transactions in the automotive salvage industry.
Investment rationale
Superior business model compared to peers
Investing heavily in future growth
Very profitable (FCF Margin > 20%) and great capital allocator (ROIC > 30%)
13. Autozone ($AZO)
Company Profile
AutoZone is a retail company that sells automotive parts and accessories. They have stores where customers can purchase items like car batteries, brake pads, oil filters, and other auto-related products.
AutoZone provides a convenient and accessible retail environment for vehicle owners to buy the parts and accessories they need for automotive maintenance and repairs.
Investment rationale
Very wide network of retail stores
Strong brand recognition
Autozone bought back 50% of its outstanding shares since 2014
12. Fortinet ($FTNT)
Company Profile
Fortinet is a cybersecurity company that provides network security solutions and services.
The company offers a comprehensive suite of cybersecurity products, including firewalls, antivirus software, intrusion prevention systems, and other security technologies.
Fortinet targets businesses and organizations, helping them protect their networks and data from cyber threats.
Investment rationale
Global leader in cybersecurity and networking solutions
Very profitable business with plenty of growth opportunities
The best-listed cybersecurity stock if you ask me
11. Inter Parfums ($IPAR)
Company Profile
Inter Parfums is a company that operates in the fragrance industry.
The company is active in the creation, manufacturing, and distribution of prestige and mass-market fragrances.
Inter Parfums collaborates with well-known brands to develop and produce a wide range of perfumes and beauty products.
Investment rationale
Strong brand portfolio with plenty of licensing agreements
The cybersecurity market will grow very attractively in the future
CAGR since 1991: 17,751% (CAGR: 17.4%)
Overview
That’s for today.
Here’s an overview of the 10 companies mentioned (click on the picture to expand):
On Sunday, I’ll reveal my final 10 picks for 2024 (only for Premium Subscribers).
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Happy Compounding!
Pieter (Compounding Quality)
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