Looking for stocks for your portfolio? These stocks are getting a boost from recent acquisitions.
It is very difficult to find the ideal stock for a portfolio. However, we can use the tips of Wall Street analysts for inspiration. Let's take a look at which 3 stocks they currently like, while at the same time are not so well known.
There are about 8,000 stocks currently trading on US exchanges, that's a lot right? Most retail investors often only turn their attention to popular and well-known stocks. So it doesn't hurt to take a look at analyst picks from time to time, as there may be some interesting stocks you may not have heard of. So today, let's take a look at 2 stocks that are both not so well known and popular, and that Wall Street analysts like.
Marriott Vacations $VAC
Marriott Vacations is an American company founded in 1984, specializing in the management of vacation properties under the Ritz-Carlton Destination Club and Marriott brands. With a significant presence in the premium segment of the market, this company offers its customers the opportunity to own luxury vacation properties at the most desirable destinations around the world.
The company is primarily engaged in the sale of luxury vacation properties, but also offers a range of services associated with the operation of these properties. These services may include, for example, property maintenance, rental services, etc. It is therefore clear that a stable revenue base will come from these services.
In order to better understand how the company operates, we need to specify what its customers are likely to look like. What is clear is that these properties are bought mostly by wealthy people who do not have the money to live there. These customers only use their properties seasonally. In the off-season, they usually offer these properties for rent. The other thing that is important here is the fact that even though the customers only use the property seasonally, the property must be maintained year round. This is the responsibility of the Marriott company, which not only makes a profit from the sale of the property, but also collects income from the maintenance of the property, for example.
Last year, the company reported revenues of USD 4.66 billion, an increase of around 20% year-on-year. In terms of net profit, the company reported a net profit of EUR 391 million. This represents a huge increase of around 700% compared to the previous period.
One of the advantages the company has is that it operates in the luxury goods segment, which tends to be recession-proof. Another advantage is the company's strong and established brand, and with it its wide range of properties and destinations.
What may not be entirely favourable for the company is the high interest rates, which may partially limit the demand for real estate. The other disadvantage I see here is the dependence on the travel industry and also the potentially increasing competition.
This company was recently looked at by 5 analysts from major financial institutions who agreed on an average price target of $194.
Topgolf Callaway $MODG-2.4%
Topgolf Callaway was founded in 1982. It is a leading global manufacturer of golf equipment. The company's primary product is the manufacture and sale of golf clubs and balls. However, the company also sells all golf related accessories such as bags, gloves and hats. The company also manufactures apparel through its subsidiary Callaway Apparel and golf shoes through its subsidiary Cuater.
In 2021, the company acquired Top Golf, which operates a network of golf centers, through an acquisition. This acquisition has further diversified the Company's portfolio, while creating a stable component of the Company's revenue that is derived from the use of the aforementioned golf centers.
The company posted revenues of USD 4 billion last year, an increase of around 28% year-on-year, and generated a net profit of USD 157 million. This represents a year-on-year decline of around 50%. This drop was due to a large increase in general and administrative expenses.
One of the company's main strengths is its innovative technology and design, which are very popular with golfers.
On the other hand, it is a company that operates in a very specific industry and is therefore heavily dependent on the popularity of golf. Another thing that may not play into the company's hands is the competition in this industry.
Recently, a total of 7 analysts have looked at this company, with several of them being from large financial institutions. These 7 analysts agreed on an average price target of $36.
Conclusion
As we can see, these companies are not that well known in the stock market, despite the fact that they have been with us for a long time. It is companies like these that analysts of large companies don't pay that much attention to because it may not pay off. So here we had the opportunity to find at least these 2 stocks that are worth analysts' attention.
In the first case, there is likely to be optimism on the part of analysts about a potential cut in interest rates, which could help the company if demand for its properties increases.
In the second case, it is likely to be optimism about the recent acquisition of Top Golf, which may bring the company additional stable revenue through payments for the use of golf facilities and golf clubs.
While analysts see potential here, it is important to do thorough research on the companies in question and consider all potential risks. But these stocks can serve as good inspiration for analysis.
WARNING: I am not a financial advisor, and this material does not serve as a financial or investment recommendation. The content of this material is purely informational.
