6 Stocks To Buy Now

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6 Stocks To Buy Now

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As we move further into 2024, several stocks stand out with strong potential for value and growth. Morningstar analysts have identified six key companies that offer significant opportunities across different sectors. Let’s dive in and explore these investment picks!

Let’s dive in.

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6 Stocks To Buy Now

Yum China: Fast-Food Expansion in China

• 56% Undervalued: Yum China’s stock trades 56% below its fair value of $76 per share, making it an attractive buy for value investors.

• Vast Market Opportunity: The Chinese restaurant market is a fragmented $700 billion industry, providing Yum China with plenty of room to grow.

• Secular Growth Drivers: Longer working hours, rising disposable income, and shrinking family sizes in urban China are fueling fast-food demand.

• Strong Brand Recognition: With powerful brand presence and an unmatched supply chain, Yum China is well-positioned to lead in China’s fast-food sector.

• Overcoming Challenges: Despite real estate and economic slowdowns, Yum China’s long-term potential makes it a solid investment for 2024.

Estee Lauder: Premium Beauty Powerhouse

• 49% Undervalued: Estee Lauder is trading at a 49% discount to its fair value of $176 per share, offering significant upside potential.

• Luxury Brand Portfolio: Estee Lauder’s premium beauty brands, including Clinique and Aveda, are benefiting from a global shift toward high-end products.

• Strong Omnichannel Presence: With both a robust digital platform and brick-and-mortar stores, Estee Lauder reaches consumers across multiple channels.

• Growth in Emerging Markets: The company is well-positioned to capitalize on premiumization trends in emerging markets.

• Caution Amid Recession: While macroeconomic headwinds could impact consumer spending, Estee Lauder’s solid brand equity ensures it remains a top contender.

Ambev: Latin America’s Leading Brewer

• 37% Undervalued: Ambev’s stock is 37% below its fair value of $3.60 per share, presenting a prime opportunity for investors.

• Market Leader: As the largest brewer in Latin America, Ambev dominates the beer and beverage markets across the region.

• 3G Capital’s Influence: Backed by 3G Capital, Ambev benefits from cost-cutting measures and efficient operations, leading to high profitability.

• Improving Margins: A reduction in raw material costs by the end of 2024 could increase the company’s gross margin by 3 percentage points.

• Premiumization Trend: Ambev is well-positioned to capture growth in premium beverage categories, boosting both sales and margins.

Zimmer Biomet: Medical Device Leader

• 34% Undervalued: Zimmer Biomet’s stock trades at a 34% discount to its fair value of $175 per share, making it a great pick in the healthcare sector.

• Market Dominance: Zimmer Biomet leads the market in large-joint reconstruction, a space that benefits from aging populations and technological advancements.

• Strong Surgeon Relationships: The company’s close ties with orthopedic surgeons create brand loyalty and high switching costs, solidifying its competitive advantage.

• Innovation Focus: Zimmer Biomet is driving growth through innovative new products and improved execution strategies.

• Aging Demographics: The global aging population is expected to increase demand for joint replacement surgeries, providing a strong growth runway.

Nike: Athletic Apparel Giant

• 33% Undervalued: Nike’s stock is trading at a 33% discount to its fair value of $124 per share, offering a compelling investment opportunity.

• Global Market Leadership: Nike dominates the athletic footwear and apparel markets globally, with top positions in running, basketball, and more.

• Triple Double Strategy: Nike’s plan to double its speed, innovation, and direct-to-consumer connections is driving long-term growth.

• Direct-to-Consumer Focus: Nike’s efforts to increase membership in its mobile apps and streamline product creation times are enhancing its digital presence.

• Resilient Brand: Despite short-term challenges in key markets, Nike’s strong brand and innovative approach make it a long-term winner.

Anheuser-Busch InBev: Brewing Giant with Global Scale

• 32% Undervalued: AB InBev’s stock is trading at a 32% discount to its fair value of $90 per share, presenting a strong value opportunity.

• Massive Global Scale: AB InBev’s vast scale, built through acquisitions like Grupo Modelo and SABMiller, provides significant cost advantages.

• Cost Efficiency Leader: AB InBev is one of the most efficient operators in the beverage industry, consistently outperforming peers in free cash flow generation.

• Debt Reduction Focus: By focusing on deleveraging its balance sheet, AB InBev aims to reduce earnings volatility and improve financial stability.

• Diverse Brand Portfolio: AB InBev’s diversified portfolio of beer brands ensures it remains a dominant player in both emerging and developed markets.

  The Content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.

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