Top 5 Stock Picks of Mika Toikka’s AlphaCrest Capital

1. Lowe’s Companies, Inc. (NYSE:LOW)

AlphaCrest Capital’s Stake Value: $18.686 million

Number of Hedge Fund Holders: 65

Lowe’s Companies, Inc. (NYSE:LOW) is a major home improvement retail company. Lowe’s Companies, Inc. (NYSE:LOW) currently has more than 2,000 locations across the United States and Canada.

Perishing Square Capital Management published its Q4 2021 investor letter where Lowe’s Companies, Inc. (NYSE:LOW) was mentioned. Here is what it said:

“Lowe’s is a high-quality business with significant long-term earnings growth potential

Supportive macroeconomic backdrop

-Aging housing stock, lack of new inventory, robust home equity values, and unprecedented pro project backlog
-COVID-19 causing millennials to enter the housing market

Positioned to grow EPS largely independent of market conditions

-Idiosyncratic revenue opportunities driving share gains
-Self-help initiatives catalyzing operating margin expansion
-Buybacks representing ~8% of current market capitalization planned for 2022

Multi-year business transformation with substantial earnings upside

-Margin target of 13% has substantial upside; Home Depot at ~15.3% and increasing
-Potential to generate high-teens EPS growth over the next several years.

Lowe’s continues to trade at a significantly discounted P/E multiple relative to Home Depot despite materially higher prospective EPS growth. LOW’s share price including dividends increased 63% in 2021 and has decreased 10% year-to-date in 2022.”

You can also take a look at Jim Cramer Recommends These 10 Stocks For Recession and 10 Best Tech Stocks to Buy According to Billionaire Ken Griffin. 

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