Growth stocks have been a bit of a roller coaster lately. Sometimes this gives opportunistic investors the opportunity to buy large companies at a discount. On a Fool live episode recorded on March 3Fool contributors Brian Withers and Matt Frankel discuss seven of their most compelling stock ideas for investors today.
Matt Frankel: We recently gave advice on adding our most compelling stocks. I know Brian mentioned the concentration of his portfolio, things like that. I have to think that the most concentrated actions are his higher conviction actions. [laughs]. JP’s specific question says, “Your three or four highest conviction values after this setback.” To that end, I’ll limit this to tech stocks. I would say my highest stock of conviction overall that we talked about today is probably Disney. But it’s not really a technological stock that has shrunk a lot.
I would say, outside of the tech stock pullout, then shut up and let Brian answer it, tech stock pullout, probably Square and Apple are going to be out of those we talked about. I still think Square has just tapped into the ecosystem concept of its financial services business. It doesn’t offer interest-bearing deposit accounts at the moment, it doesn’t offer checking accounts, it doesn’t offer personal loans, it doesn’t offer auto loans, it doesn’t offer mortgages or insurance products, all those other things that can bring into its ecosystem. I think that by gradually adding these products, there will be an incredible network effect. It will work like Apple’s product ecosystem, which I mentioned earlier why I love Apple so much.
If you want to talk about this outside of the stocks we mentioned today, one of my more compelling names is a company called Digital Real Estate Trust, which has fallen a lot lately. It is essentially a real estate action which trades like a technological action. It’s a company that has a bunch of data centers, which is what all these tech stocks, where all of their software as a service and other cloud-based applications and things like that, are houses. physical for these. It has gone back a lot. If you’re looking for a tech game without a ton of downside risk because it’s backed by real estate, this is a business [for you], the stock symbol for this is DLR. It’s one of my favorite stocks after this setback. Brian, what are you looking at? Or are you not looking at your brokerage at all?
Brian Withers: No. There are a bunch of things that look like a good deal right now. Of those we talked about, I would say Twilio is my preferred. I said there are a lot of growth levers and they are extremely innovative and have added to their addressable market over the past few years. This is the kind of business you want to get into that is voluntary and has the ability to expand into adjacent markets.
I would be remiss if I didn’t talk about Free Mercado at 25% off sale today. This one is just a fantastic long-term game in a market that is still in single digits in Latin America e-commerce. Not only e-commerce, MercadoLibre has a fantastic payment platform and they will become a fintech innovator to enable consumers, unbanked and underbanked consumers in the region, to have access to the financial products they want. need.
Finally, just because the coronavirus is ending, just because we’re getting a vaccine and going to see people again in person, doesn’t mean you’re going to need a pen and paper to sign documents. People who adopted DocuSignThe electronic signature platform will not disappear. They will continue to expand their use cases, they will continue to develop their customers. They are about to complete their data center to allow them to get high FedRAMP level approval, which will allow them to enter the DOD. [Department of Defense] and [the] veterans administration. DocuSign is just a solid buy for me. We can’t tell you that. We can’t give you personal advice on the show, but I love the price it is offered. He’s going to come out with profits here on March 11th and I think it’s going to beat. I’m just excited about DocuSign, MercadoLibre, and Twilio over the next five to ten years.
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