Share buybacks to hit the HIGHEST level in years

Join TradeAlgo's Free Live Trading Session ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ [EARN WHILE YOU LEARN! JOIN OUR FREE LIVE TRADING SESSION!]( Hello investor, Share buybacks to hit the HIGHEST level in years Strong earnings continued to carry the stock market. We are wrapping up the earnings season, and there were several high-profile companies that disappointed. But it almost didn’t matter. Why? The Magnificent Seven is projected to deliver almost 50% profit growth this year, which is way above the other 193 companies in the S&P 500 with just under 1% growth forecast. As long as the Magnificent Seven goes, the stock market is poised to keep rallying. - “We continue to see a path higher for stock prices as long as fundamental conditions remain stable and profit growth remains on a positive trend,” said Anthony Saglimbene at Ameriprise. - “Elevated interest rates and sticky inflation, along with the Fed holding monetary policy at restrictive levels for longer than most expected at the start of the year, introduce some added risks.” For now, Wall Street is ignoring concerning signs of lower GDP growth with high inflation. Fed bank of Minneapolis President Neel Kashkari said yesterday that rates will probably stay unchanged “for an extended period of time.” Share buybacks are back in style. It could boost stock prices, as about a sixth of the $934 billion in estimated share repurchases this year are expected to happen in May and June, said Goldman Sachs Group’s Scott Rubner. You can see that it would be one of the highest in the last few years in the graphic below: (Source: Bloomberg) On the other hand, Bank of America said client groups (institutional clients, hedge funds and retail investors) sold a net $4.6 billion of US stocks in the five-day period ended Friday. So, there is still a risk for stocks to pull back in the next few weeks. Trade cautiously. A Boring (But Potentially Elite) Stock to Own for Years Today’s Stock Pick: Core & Main (CNM) Have you ever heard of Core & Main? Unlikely. However, the company has been indispensable to the communities of America. It is the leading specialty distributor with a focus on water, wastewater, storm drainage and fire protection products, and related services. In other words, these are key items that nearly every town needs to be fully functional. The #1 investment thesis: Core & Main operates in a highly fragmentated market with a $39 billion addressable market. And guess what? It is one of just two national distributors in an industry that scale matters. (Source: Core & Main) Can you guess the best growth playbook for a company operating in a fragmented market? Yep, acquisitions. By simply picking up local providers, Core & Main has a clear growth path. As you can see from the graphic above, the company owns just 17% of the market. And it has a proven history of growing through acquisitions over the years. According to CEO Steve LeClair, the company typically adds 2% to 5% of sales growth annually through acquisitions. - “We have a robust pipeline and a proven playbook we utilize in pursuing and executing acquisitions. Our acquisitions have historically delivered 2 percentage points to 5 percentage points of sales growth annually and we are confident in our ability to deliver similar results over the long-term.” (Source: Core & Main) Growing margins: Core & Main expects its adjusted EBITDA and margin to grow by 12% CAGR from FY23E to FY28E (or five years from now). Even though its net sales will grow high single digits each year in the same period, rising margins are going to do wonders to the EPS. (Source: Core & Main) But the biggest key is its cash flow conversion. The company sets a target of converting about 60% to 70% operating cash flow conversion which it expects to hit this year. That’s a huge number. Bottom line: Core & Main doesn’t need to pull a miracle to become a sensational stock. All it has to do is to follow its playbook of acquiring companies in a highly fragmented market. And grow sales organically. This is a low-risk stock with a solid upside. Add this to your portfolio. [EARN WHILE YOU LEARN! JOIN OUR FREE LIVE TRADING SESSION!](       © All Rights Reserved, Trade Alliance [Unsubscribe]( | [Manage Preferences](