2 Stocks For The Next Bull Market

With retirement portfolios losing almost $1 in every $4 invested this year, investor sentiment is clearly bearish. Losing almost a quarter of your invested portfolio is bad, but that’s assuming you had it invested in the S&P 500.

For those who speculated on high growth names like Affirm, Upstart, and SoFi, the bear market has acted like a grim reaper to their holdings. However, another bull market will come and when it does, two monster companies should be on your radar.

Oracle

For what seemed like an eternity, Oracle share price stalled. In 2010, the share price sat at $25 per share, significantly lower than where it traded at its peak in 2000. The company was written-off as a “has-been” when compared to giants like Alphabet, Amazon and Microsoft. Those Cloud providers posed an existential threat to Oracle’s on-premise software.

But the past decade or so has seen Oracle on a steady march higher, even eclipsing $103 per share at its peak in December last year. The turnaround can be attributed to management’s decision that can be boiled down to a philosophy of “if you can’t beat ’em, join ’em.” In essence, Oracle turned around its titanic business before it became obsolete and embraced cloud-based services, cannibalizing its own on-premise software business along the way.

Oracle has been acquisitive too, snapping up companies to bolster its enterprise resource planning (ERP) tools. And while revenue growth through acquisition is better than none at all, it’s not as attractive as organic growth. On that metric, Oracle forecasts cloud revenues to increase by as much as 30% organically. Overall, revenues are forecast to rise by 17%, including the bump from acquiring Cerner.

Analysts are expecting the spike in revenues will translate to much more rapid growth in earnings (to the tune of 67%). For Buffett-like investors who embrace share buybacks, there’s a lot to like too; it has reduced its count by almost 50% in the last decade.

When we ran a discounted cash flow forecast analysis on Oracle, we arrived at a fair value of $85.78 per share, suggesting as much as 32.9% upside on the cards. All in all, there’s a lot to like about Oracle when the market tides turn.

American Tower

Other REITs grab the headlines, but American Tower deserves a place on any serious investor’s radar, not least because it has established the largest global portfolio of communication sites. The company has grown through acquisitions, expanded into the data center segment, and now has ambitions to go global.

American Tower is no stranger to overseas business. In fact, it established operations abroad over twenty years ago. In the interim, the company has grown to north of 170k tower sites outside the United States. These sites have come under the American Tower umbrella primarily through a collection of acquisitions that span the globe, from Africa to Latin America.

The company’s investments, both acquisitive and organic, have led to international operating profits growing by over 20% annually and in turn boosted dividend growth by a similar percentage.

Management has stated clearly that it expects to further expand with aims to add as many as 50,000 new sites to its international portfolio in the next few years. When you add a compelling growth story to a history of returns and a 2.57% dividend yield, American Tower becomes ever more compelling. Analysts seem to agree and have pegged fair value at $295 per share, approximately 30% higher than where the share price sits today.