Company / Analytics

Analytics, 03 February 2023

Top-Pick Stocks for February

January has been the pacesetter for the 12 months of the year 85% of the time since world war II. This month being the historical measurement for the year’s performance, 2023 may turn out to be a good year for the stock markets given their year-to-date performance.

After the market went through a stressful 2022 it may be time to see some change as stocks show a probability of taking a turn for the better especially if the upcoming Fed Announcements shift the monetary policy to improve the business outlook.

Some analysts however still expect some turbulence and even expect to witness some new lows in the market.

In this article, we shall look at some of the stocks with a potential upside and our picks to consider for February.

Frontier Digital Ventures Limited

Frontier Digital Ventures Limited is a Malaysia-based company. The Company is an owner and operator of online marketplace businesses (Operating Companies) in underdeveloped, emerging countries or regions. It focuses on property and automotive verticals and general classifieds Websites and opportunities in emerging markets. Its operations include 16 companies operating across 20 markets that lead in their specific markets in various regions including but not limited to Asia, Latin America, the Middle East, and North Africa.

The company’s stock was trading at 0.89 Australian dollars as of the time of writing after a 4.22% rise today. The stock rose by 8.12% in the past five days bringing its total for both this month’s rise and year-to-date rise to 30.88%. This however just went to try and cover its losses from last year when it fell by -3.26% in the past six months and -36.88% in the past 12 months.

Despite this fall Frontier managed to achieve growth in its portfolio of geographically diverse operations in 2022, despite the disruptions caused by Covid-related restrictions. In the third quarter of 2022, Frontier posted record quarterly EBITDA, with all three of its operating regions posting positive EBITDA for the first time concurrently.

IVU Traffic Technologies

IVU traffic technologies have been developing integrated IT systems for efficient and environmentally friendly public transport for over 45 years. Using the IVU suite as its basis, the company develops powerful IT products for bus and rail companies as well IVU Systems for vibrant cities.

Most seasoned long-term investors consider growth in earnings per share a deal maker. IVU Traffic Technologies managed to grow its earnings per share by 14% per year, over three years. If the company sustains this growth it would be a really good incentive for investors. Careful consideration of revenue growth and earnings before interest and taxation (EBIT) margins can help inform a view of the sustainability of the recent profit growth. IVU Traffic Technologies shareholders can take confidence from the fact that EBIT margins are up from 6.0% to 13%, and revenue is growing. Both of which are great metrics to check off for potential growth.

The stock was trading at 17.20 Euros as of the time of writing, after today’s rise of 2.38%. The IUV traffic Technology stock had a terrible year in 2022, recording a fall of almost 13% due to the same problems faced by all markets globally in the same year. This however does not take away the fact that it has grown continually for the past five years by 237.07%. In the past month, it has risen by 4.30%.

Airbnb Inc

Airbnb Inc. is an American company based in San Francisco that operates an online marketplace for short-term homestays and experiences. The company acts as a broker and charges a commission from each booking. The company was founded in 2008 by Brian Chesky, Nathan Blecharczyk, and Joe Gebbia.

Airbnb has become a powerhouse in the travel and tourism industry. It is currently one of the most visited websites in the accommodation and hotels category. It is also one of the most downloaded travel apps. This success comes from its asset-light business model.

Traditional hospitality companies spend millions of dollars plus a lot of time to build hotels. Still, Airbnb sources rental properties from a network of more than 4 million hosts, making it much more efficient for users and investors. It takes minutes to onboard a new host, and it costs far less than building a hotel.

The stock was trading at 113.99 U.S. dollars as of the time of writing. In the last five days, it rose by 7.23% bringing its last month’s rise to 28.95%. This compensates for last year’s -28.90% drop.

Investor’s Note

Sam Stovall, the Chief Investment Strategist of CFRA quoted the saying popularized by the stock traders’ Almanac ‘as goes January, so goes the year.’ This year may have started relatively well but whether it will be in the 85% where January marks the trajectory for the rest of the year or if it will fall in the rare category of the 15% where expectations set at the beginning of the year are dashed in the rest of the months. Only time will tell.

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