Andrew Bary shares his top stock picks for 2024, discussing the state of the stock market, tech stocks, and the potential impact of the Fed cutting rates. They also discuss successful stocks from last year, including Home Builder tote brothers. Top picks for the year ahead include Alibaba, Alphabet, Barric Gold, and Berkshire Hathaway. The chapter also touches on declining COVID vaccine sales, Chevron's performance as an energy company, the ownership structure of Madison Square Garden sports, and stocks with high dividend yields.
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Quick takeaways
Alibaba Group is undervalued despite concerns about investing in China, with impressive financials and strong market position in e-commerce.
Alphabet is a solid investment with attractive valuation and dominant position in the search business, along with growth potential from its cloud business and strategic partnerships.
Barrick Gold presents an opportunity in the gold sector, with a low valuation, strong management, and diverse portfolio of mines.
Chevron is an attractive pick in the energy sector due to compelling valuation, strong reserve base, and potential for increased oil prices.
Hertz Global Holdings offers an interesting investment opportunity with resilience post-bankruptcy, dominant position in the rental car business, and potential for market consolidation.
Deep dives
Overview of the Podcast
In the Barron Street Wise podcast, Andrew Berry discusses his top stock picks for the year ahead. He highlights the strong performance of the stock market in 2023 and the potential for further upside in 2024. Berry shares his analysis of various stocks, including Alibaba Group, Alphabet, Barrick Gold, Chevron, Hertz Global Holdings, Madison Square Garden Sports, Pepsi, Buy on Tech, and U-Haul Holding. He explores the investment potential of each stock, considering factors such as valuation, growth prospects, market dominance, and industry trends.
Alibaba Group
Despite concerns about the risks associated with investing in China, Berry believes Alibaba Group is undervalued. He highlights the company's impressive financials, including earnings growth and a stock price that has remained relatively flat since its IPO. Berry sees the stock as a cheap option on the Chinese market, considering its low price-to-earnings ratio and strong market position in e-commerce.
Alphabet
Berry considers Alphabet to be a strong combination of growth and value. He notes its attractive valuation, trading at around 20 times forward earnings, and its dominant position in the search business. With growth potential from its cloud business and strategic partnerships, Berry sees Alphabet as a solid investment.
Barrick Gold
Berry believes Barrick Gold is well-positioned in the gold sector. The company's stock price, trading around 15-16 times forward earnings, presents an opportunity, particularly if interest rates decline and the Federal Reserve adopts a more accommodative stance. Berry also highlights the company's strong management and diverse portfolio of mines.
Chevron
Berry sees Chevron as an attractive pick in the energy sector. Despite recent underperformance, he believes Chevron's valuation is compelling, with the stock trading at around 10 times forward earnings and offering a 4% dividend yield. Berry expects that the company's strong reserve base and potential for increased oil prices could drive future growth.
Hertz Global Holdings
Berry views Hertz Global Holdings as an interesting investment opportunity. After emerging from bankruptcy, the company has shown resilience and maintains a dominant position in the rental car business. While challenges with EV investments and potential competition exist, the low valuation and market consolidation present upside potential.
Madison Square Garden Sports
Berry considers Madison Square Garden Sports an intriguing investment associated with valuable sports franchises, the New York Knicks and New York Rangers. Despite a complex ownership structure, the stock offers a discount relative to the potential value of the teams. While the Dolan family, which controls the company, has not shown interest in selling, Berry believes there is a possibility for value creation.
Pepsi
Berry sees Pepsi as one of the best consumer franchise stocks. With a reasonable valuation, the company's dominance in the snack industry through Frito-Lay provides a strong foundation. While concerns about the impact of diet drugs on snack consumption exist, Berry believes the consumer love for snacking will persist, making Pepsi an attractive investment.
Buy on Tech
Despite uncertainties surrounding its post-COVID sales, Berry finds Buy on Tech to be an intriguing investment due to its cash-rich position and oncology-focused pipeline. The stock's current price reflects a discount relative to its potential, making it an interesting option.
U-Haul Holding
Berry highlights U-Haul Holding as a dominant player in the self-moving truck rental market. The company's extensive network and brand recognition have created a competitive advantage. With a low profile and family ownership, Berry believes the company could attract attention and potentially deliver shareholder value.
