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The Top Three Stock Picks from the September Portfolio

    Using our quantitative stock research engine, we create a new model portfolio with our top ten stock picks every other month. The portfolio holdings will all have Ziggma Scores in the 90s and very high sub-scores across the board. The portfolio is equal-weighted and well diversified by sector. There is a sector selection bias towards sectors with strong underlying growth dynamics. Please refer to our Markets Page for a sector performance overview.

    The idea behind the Ziggma Top Score portfolio is to provide inspiration, not to be confused with advice, to investors looking for new ideas or possibly reassurance, if their investment portfolios have some of these top stock picks in common.

    These are the investment highlights for the top three of our September top stock picks:

    EBS – Emergent BioSolutions Inc

    At a current score of 98, Emergent Biosultions has a business model that is as relevant as it can get these days. The company focuses on the development, manufacture, and commercialization of medical countermeasures that address public health threats. Its products address public health threats primarily chemical, biological, radiological, nuclear and explosive related threats, as well as infectious diseases.

    Here are some of the key drivers for EBS high Ziggma Score.

  • Exponential revenue growth
  • Increasing net margin
  • Improving overall profitability
  • Upward earnings revisions
  • Moderate financial leverage

  • WGO – Winnebago Industries Inc

     

    Winnebago has the top score in the Automotive Industry. You may say that it’s not a huge feat in an industry facing such huge structural change. Having said that, WGO is not car manufacturer but possibly the most iconic maker of recreational vehicles. The company could be one of the winners of the Covid-19 crisis as people shun hotels for the benefit and security of their own full service RV. Low gasoline prices traditionally also help RV producers a great deal. And finally, nobody will want to go on a cruise anytime soon.

    Key investment highlights:

    WGO eps growth

  • Attractive projected growth figures
  • Increasing operating cash flow margin
  • Very low balance sheet leverage
  • Forward PE ratio well below the company’s long term average
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    URI – United Rentals

     

    United Rentals scores at 95 in the Diversified Services industry with solid scores all around. The company’s business consists of equipment rentals, specifically general construction and industrial equipment.

    Key investment highlights:

  • Double digit compound growth rates for EBITDA, EBIT and operating cash flow
  • 2021 forward PE ratio well below historical average
  • 5-year average ROE of 37%
  • Declining leverage with Net Debt/EBITDA down to 2.7x in 2019 from 3.2x in the previous year
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    Investors should pay attention to the company’s cost of debt. It has been rising over the last year and could be a sign of bank’s negative perceptions of the company’s prospects.

     

Full disclosure:

We are investors – like you – that look for great companies that will create value over time with a best-in class product or service offering. Therefore we may invest in some or all of the stocks mentioned above following the publication of this article.

Disclaimer:

This is not investment advice. This article is for information purposes only. Please do your own research.