Tuesday's best stock ideas (Oct 24)

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Our AI read and summarized 213 articles and found:

  • A banking technology firm with a huge moat and upside after selling off an underperforming asset (stock idea)

  • Ben Graham’s top ten tips

  • An Italian banking group with a 13% dividend (stock idea)

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FEATURED TRADES

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ANALYST REPORT

🥇 Bank of Nova Scotia: Results Starting To Improve

Bank of Nova Scotia is a global financial services provider. The bank has five business segments: Canadian banking, international banking, global wealth management, global banking and markets, and other. It offers a range of advice, products, and services, including personal and commercial banking, wealth management and private banking, corporate and investment banking, and capital markets. The bank's international operations span numerous countries and are more concentrated in Central and South America.

Ticker: $BNS | Price: $42 | Price Target: $54 (+29%) | Timeframe: N/A

🏦 Banking | 📈 Bullish Idea

The author makes a compelling case that Bank of Nova Scotia, Canada's most international bank, is undervalued trading below book value and at just 10x earnings. While its international exposure adds risk, it also provides higher growth potential versus domestic peers. The bank operates in the attractive, protected Canadian market with strong positions in mortgages, auto lending, and wealth management. Though efficiency gains have been delayed by ongoing investments, the author believes Bank of Nova Scotia can achieve mid-teens returns on equity. With shares undervalued on both price-to-book and P/E metrics, the author sees significant upside even assuming just low double-digit returns. Macroeconomic risks in Canada are present but manageable, and new CEO Scott Thompson may catalyze improved performance. Overall the author sees Bank of Nova Scotia as offering an attractive risk-reward profile.

Read the full article here (paywall). Read time: 7 min

SEEKING ALPHA

🥈 Jabil: Beyond The Surface, Value And Growth At Your Fingertips

Jabil Inc. is one of the leading providers of worldwide manufacturing services and solutions, specialized in electronics design, production and product management services to various industries

Ticker: $JBL | Price: $125.31 | Price Target: $170.10 (+38%) | Timeframe: N/A

🏭 Manufacturing | ⚡️ Electronics | 📈 Bullish Idea

The author elaborates on the several reasons why Jabil Inc. (JBL) is an attractive investment opportunity. The first is the company's potential to benefit from the re-shoring trend, stimulated by logistics considerations and government interventions. Secondly, the rising demand for outsourcing in the semiconductor and healthcare sectors, combined with JBL's strong partnership with Johnson & Johnson, puts the company in a promising position for sustained growth. Thirdly, the company's participation in high-growth sectors, especially Electric Vehicles, promises significant expansion. Forthly, JBL's strategic alliances with Amazon and its focus on AI and machine learning also lend to its investment appeal. Despite the risk of customer concentration and potential supply chain shortages, the author strongly believes in the compelling nature of JBL's diverse, technologically adept and well-established client relationships and hence initiates a Strong Buy recommendation with a target price of $170.10.

Read the full article here (5 free per month). Read time: 8 min

ANALYST REPORT

🥉 Fidelity National Information Services: Tracking a Bit Ahead of Expectations

Fidelity National Information Services’ legacy operations provide core processing and ancillary services to banks, but its business has expanded over time. By acquiring Sungard in 2015, the company now provides record-keeping and other services to investment firms. With the acquisition of Worldpay in 2019, FIS now provides payment processing services for merchants and holds leading positions in the United States and United Kingdom. About a fourth of revenue is generated outside North America.

Ticker: $FIS | Price: $50.24 | Price Target: $76 (+51%) | Timeframe: N/A

🏦 Banking Technology | 📈 Bullish Idea

The author makes a compelling case that FIS is undervalued after deciding to sell a 55% stake in its Worldpay merchant acquiring business to GTCR. This allows FIS to retain exposure to Worldpay's growth potential under new ownership, while reorienting itself around its stable, recurring revenue bank technology business which benefits from a narrow moat. Though FIS sold Worldpay at a relatively depressed 9.8x EBITDA valuation, the author believes going private may enable faster turnaround of Worldpay's challenges. Meanwhile, FIS' bank tech business warrants a premium given its entrenched position providing mission-critical infrastructure to banks. New leadership at FIS is focused on addressing past operational issues that have hindered performance. The Worldpay sale also provides cash for shareholder returns. Risks exist around limited transparency into Worldpay's turnaround progress, but the author believes FIS shares are undervalued based on the quality and stability of its core bank technology business. With a renewed focus, the author sees an attractive risk-reward profile in FIS stock.

Read the full article here (paywall). Read time: 8 min

POLL - FEATURED TRADES
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Which featured trade idea was your favorite?

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Yesterday’s Poll Results (link):

🟩🟩🟩⬜️⬜️ Bank of America ($BAC) [47%]

🟨🟨⬜️⬜️⬜️ Kosmos Energy ($KOS) [30%]

🟥⬜️⬜️⬜️⬜️ InterActiveCorp ($IAC) [23%]

Your Thoughts:

  • 💻 emoj*** ($IAC): All were compelling from very different risk perspectives, but from world activity risk perspectives, IAC has a plus with the pending Turo IPO.

Keep reading until the end of the email for the bonus stock ideas!

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DAILY QUIZ
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Which company is known for its "Direct Listing" on the NYSE in 2018, bypassing the traditional IPO process?

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Yesterday’s Question (link): Which company's faulty ignition switches led to a major recall and controversy in 2014?

Answer: General Motors (they had to recall 29M cars in North America)

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WEEKLY TOURNAMENT

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🏆 This Week’s Leaderboard

  1. jakem**** (49 points)

  2. dwhit*** (49 points)

  3. joel.**** (49 points)

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BONUS STOCK IDEAS

The Bonus Stock Ideas section tends to include more unique trade ideas: short ideas, OTC stocks, foreign stocks, special situations, etc. These are for more adventurous/advanced investors.

TWITTER

BFF Group ($BFF.IM)

BFF Banking Group is the largest independent specialty finance group in Italy and a leading player in Europe, specialized in the management and non-recourse factoring of trade receivables due from the Public Administrations, securities services, bank and corporate payments.

Ticker: $BFF.MI | Price: $8.94 | Price Target: $17.88 (+100%) | Timeframe: end of 2026

🏦 Banking | 🇮🇹 Italy | 📈 Bullish Idea

BFF Group ($BFF.IM), which I've posted about before continues to be our largest position. Combination of cheap starting multiple (~7x 1-yr forward PE, ~13% dividend yield), IMMENSE anti-fragility (macro scaries leads to higher factoring volumes by customers, whilst higher rates for longer will lead to a material benefit to it's bond book and factoring & lending income) and conservative CMD targets to FY26e which if achieved will see the stock double. >15% annual EPS growth and a 13% dividend yield gets you to >25% IRR's with no re-rate).

Read the full article here. Read time: 1 min

TWITTER

Lufax Holdings is one of the cheapest US-listed stocks

Lufax Holdings is a holding company mainly engaged in providing financial services for small and micro enterprises.

Ticker: $LU | Price: $0.97 | Price Target: $2.91 (+200%) | Timeframe: N/A

🏦 Financial Services | 🇨🇳 China | 📈 Bullish Idea

The author makes a compelling case that Lufax, a Chinese financial services company, is significantly undervalued trading at just 0.17x price-to-book value and below net current asset value. With $9.6 billion in cash compared to a $2.1 billion market cap and solid consumer finance fundamentals, Lufax appears poised to recover as the Chinese economy stabilizes. While earnings have declined and the dividend may face further cuts, Lufax focuses primarily on SME lending and holds a consumer finance license, enabling growth potential. With PingAn as a major shareholder, fraud risk seems limited. Despite risks from regulation and financial crises, the author sees Lufax as among the cheapest US-listed stocks and warranting at least a 3x return based on normalizing fundamentals and reducing discounts.

Read the full article here. Read time: 2 min

TWITTER

Sesa ($SES.MI)

Sesa SpA is active in the distribution of Information Technology (IT) for business sector and end users. It offers technology solutions, digital services and business applications to enterprises and organizations. The Company operates in four business sectors, including Value Added Distribution (VAD), Software and System Integration (SSI), Business Services (BS) and Corporate.

Ticker: $SES.MI | Price: $94.05 | Price Target: N/A | Timeframe: N/A

💻 IT Services | 🇮🇹 Italy | 📈 Bullish Idea

Sesa ($SES.IM): Italian IT Services provider which can grow organically at >10% for the forseeable future given digitization secular tailwinds, government subsidies and continued market share gains from share donors like Atos and TD Synnex. Can add another +5% of top-line growth annually from continuing their rapid serial acquisition story. EBITDA margins will expand to >8% due to operating leverage and a continued focus on acquiring higher-margin businesses. Trades on a eFCF yield of 9% w/ eFCFPS growth of >15%.

Read the full article here. Read time: 1 min

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