I recommend looking at other sectors or industries. And you do not have to dilute your expectations or criteria to find good companies to invest in.
Today, some of the strongest secular tailwinds are in the areas of semiconductors, cybersecurity, cloud, AI, robotics, e-commerce, data sciences and clean energy.
Each of these sectors have dominant companies that are growing faster than their competition…AND…many of them are selling their products/services via a subscription model…AND…have high margins, expanding margins, expanding cashflows and lower trending shareholder dilution.
You have some of these sectors represented in your portfolio, not all.
Consider a company like NVDA. If you don’t like semiconductor chips, thats ok. Take a closer look at their Nvidia Omniverse full stack platform as well as their Nvidia Drive platform. They are selling each of these under a subscription model to industrial customers and auto manufacturers respectively.
Similarly take a look at AAPL. They now have 935M paid subscriptions, up more than 150M during the last 12 months and nearly 4x from 5 years ago.
Boring mega cap stock…sure…but…
Apple’s market cap has grown 250% since 2018 and they reduced shareholder dilution more than 15% over that timeframe.
My point being that high-growth subscription businesses can be found in more places than just cloud or software.
Here is another thought: Look for companies that are expected to grow at a higher rate in Q4 2023 versus Q4 2022. I am looking for similar such stocks that are pivoting to higher growth this year. To find them, we have to stop referring to mgmt guidance in the Q4 earnings reports and look at updated analyst estimates (based on updated revenue pipeline and discounted cash flow analysis) for the next 4-5 quarters.
Two companies that will pivot this year to higher growth: AAPL and NVDA.
I have been saying this a lot recently. In this environment, investors need to be flexible…be open to different ideas…be ready to shift from being a just bullish or just bearish…be ready to accept that the hey days of 2020 and 2021 might not come back…be like water…(Bruce Lee circa 1971).
PS. Please ignore my response and ideas if they are off-topic or “nonsense”