Every month, we ask our freelance writers to share their top US stocks with investors — here’s what they would like to buy for February!
[Just beginning your investing journey? Check out our guide on how to start investing in the UK.]
Crispr Therapeutics
What it does: Crispr Therapeutics is a biotechnology firm utilising CRISPR gene editing to develop treatments.
By Dr James Fox. Crispr Therapeutics (NASDAQ:CRSP) has made headlines in recent months as it became the first company to have a gene-editing treatment approved for use in the UK, US, and elsewhere in the world.
So why am I bullish on Crispr Therapeutics? After all, the stock is up 25.7% over the past 12 months.
Well, I’m bullish because I don’t think the company’s future earnings have been fully priced in. Casgevy, Crispr’s treatment for sickle cell disease and beta thalassemia, is expected to cost $2.1m and is targeted toward extreme cases of the disease.
As such, assuming the first patient cohort will be around 16,000-20,000 individuals, the treatment could achieve sales in excess of $40bn. Given the 40-60 split between Crispr and Vertex, Crispr’s share of revenues would be three times its current market value.
There are some concerns about the efficacy of Casgevy over the long run, but to date, the data suggests this treatment is going to change thousands of lives for the better.
James Fox owns shares in Crispr Therapeutics.
Mettler-Toledo International
What it does: Mettler-Toledo is a leading global manufacturer of precision instruments and services for use in laboratories and manufacturing.
By Ben McPoland. As I write, shares of precision instrument specialist Mettler-Toledo (NYSE: MTD) have fallen 28% in two years. They’ve struggled due to tough year-on-year revenue comparisons and a large drop-off in sales in China. There’s a risk this trend could continue as the Chinese economy remains fragile.
However, this high-quality business should bounce back. Its largest division, Laboratory, sells things like pipettes, thermal analysis systems and other tailor-made instruments. Its Industrial unit makes vehicle scales.
Importantly, the firm’s precision weighing instruments are critical in long-term growth markets like biotech R&D and the manufacturing of semiconductors and electric vehicles. Its software analyses and transfers all this data into its customers’ management information systems.
Meanwhile, the firm remains extremely profitable. Indeed, its return on invested capital (ROIC) – which measure a company’s efficiency in generating returns – is a mind-boggling 45%. That ROIC is among the highest in the world.
Mettler-Toledo doesn’t issue dividends. Instead, it utilises its robust free cash flow to repurchase approximately 3% of its outstanding shares each year. Trading at 28 times free cash flow, the stock is currently the cheapest it’s been in years.
Ben McPoland does not own shares of Mettler-Toledo International.
Salesforce
What it does: Salesforce is a leader in enterprise cloud computing, helping to improve commerce using advanced technology.
By Oliver Rodzianko. Salesforce (NYSE:CRM) may not be a hidden investment, but it seems to be a good stock to consider buying.
Artificial intelligence is becoming more mainstream, including in retail operations. Salesforce is primed to capitalise on this.
The company has had a strong 16% annual revenue growth rate over the last three years. However, the firm’s valuation is potentially its biggest risk.
The market has priced the shares for perfection, with a price-to-earnings ratio based on future earnings estimates of around 30.
Nonetheless, I think the firm’s emphasis on data integration and artificial intelligence with customer relationships will be the key to its continued excellent performance.
I can see Salesforce continuing to do particularly well in an economy that has become more automated.
While I haven’t bought the shares yet, it’s right at the top of my watchlist. Its next earnings results should be in February; I’ll be watching closely.
Oliver Rodzianko does not own shares in Salesforce.
Uber Technologies
What it does: Uber is one of the largest providers of rideshare/mobility services in the world with around 130m users across approximately 70 countries.
By Edward Sheldon, CFA. Uber (NYSE: UBER) is a growth stock I’m really bullish on today.
For starters, profits are really starting to motor higher. This year, the company is expected to generate a net profit of $2.4bn, up from an estimate of $816m for 2023.
Secondly, the company has recently introduced digital ads within its app. I expect these advertising services to make a meaningful contribution to the company’s top and bottom line in the years ahead.
Third, the company is doing some really interesting things with self-driving cars in the US, in partnership with Alphabet‘s Waymo. In the long run, this partnership could have some exciting – and lucrative – implications.
It’s worth pointing out that Uber shares have had a great run over the last 12 months (they’ve more than doubled in price). So, there is always the chance of some profit taking in the short term.
Taking a long-term view, however, I reckon this stock has a lot of potential.
Edward Sheldon owns shares in Uber Technologies and Alphabet
