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There are literally thousands of listed companies to invest in, not to mention the many exchange-traded funds (ETFs) and mutual funds to buy, so it’s not surprising that many investors do not know where to start. And given the recent market downturn, especially in growth stocks, there are many stocks trading at significantly lower prices than they were six months or a year ago. But what are the best stocks for 2023? In this article, we present the top picks that we think could be good buys in 2023.
TSMC continues to prove its prominent position as the key enabler of the new computing revolution in the semiconductor industry, with multiple architectures and chip platforms. More interestingly is the company’s investment in design teams which are mainly focused to push computing and AI innovation. Demand trends have weakened over the course of the past months, mainly in the mature lines, and the uncertainty surrounding the demand outlook for the iPhone 14 series. However, we believe that management was smart enough to guide for weaker-than-expected 1H23, so that it can re-focus on achieving better results on the back of a stronger order book in 2024. We are of the view that the N3E design pipeline in 2024 and beyond looks quite strong, with Intel likely to be a significant customer for PC chipsets, in addition to strong demand from AMD, Apple, NVDA and in-house silicon from hyper scalers. Interestingly TSMC should retain process leadership, with a 90% share in N5 and nearly 100% share in N3.
Following the recent market moves, we believe that Comcast is offering attractive entry levels. Given therelatively defensive sector and the to-date resilient U.S. economy, we believe that the company should still cope well in the current uncertain macroeconomic environment. Our view will be more supported by better-than-expected broadband subscriber gains following softer figures over the past year, and acceleration in Peacock, the over-the-top video streaming service. Moreover, given the possibility of recession avoidance, advertising trends should improve, while the Sky business should postbetter-than-expected results.
Total has a high-quality portfolio that both covers all bases and provides competitive macro leverage which is attractively valued. Despite the current uncertainty, we believe that energy prices should remain relatively stable at this juncture, mainly supported by the China re-opening, in addition to the unpredictable OPEC+ decisions. This augurs well for energy companies. Indeed, we view attractive cash returns to shareholders as a positive for EU Big Oils, and therefore the company’s decision to increase the FY22 total dividend by 44% year-on-year to €3.81/share and the announcement of a 7.2% increase to €0.74/share in interim dividends in 2023, given its strong balance sheet and commitment to capital discipline, is also positive. Total has demonstrated the ability to navigate the downturn, and continues to support a strong pipeline of projects with major ramp-ups and start-ups, including Block 10 in Oman, Mero 2 in Brazil, and Absheron in Azerbaijan. Moreover, Total was one of the first oil companies to start investing to reduce emissions. its commitment is to become a net-zero corporate across all scopes by 2050. On its way to carbon neutrality, Total is aiming to reduce Scope 1+2 net operating emissions by 40% by 2030, as well as reduce Scope 3 emissions in Oil by 40% over the same time frame. Overall, the company is targeting the reduction of its Scope 1+2+3 emissions by 30% by 2030.
We continue to believe Booking Holdings is the best-positioned company in the online travel space. We think there is meaningful room for global share gains as its share of overall travel still is at single digits. We expect disciplined investments across its broader travel offerings, including alternative accommodations and connected trips, which should contribute more to growth going forward. We recognize that macro factors, including inflation, new COVID variants, & Russia/Ukraine conflict, present risks, but we believe travel demand will continue to recover and Booking is well positioned on the other side. As travel surpasses 2019 levels, we believe the focus will shift more to individual company performance and we are confident that Booking has a strong management team, execution, discipline, and ability to grow EBITDA and free cash flow.
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Calamatta Cuschieri Investment Services Ltd is licensed to conduct investment services business under the Investments Services Act by the MFSA and is also registered as a Tied Insurance Intermediary under the Insurance Distribution Act.
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