The #1 stock picks for 2024

I also like Nike's valuation. It's trading at 28x PE versus a historical average of 33x, and it has mid-teens earnings growth going forward. So, the PEG ratio (price/earnings-to-growth) is very attractive. 

Lastly, I like Nike because it's one of the best brands in the world. Some sportswear brands come and go, but Nike is here to stay. If you're thinking of buying a stock and buying Nike for 2024, just do it.

#2. Australian Clinical Labs (ASX: ACL)

They have great prospects in terms of M&A and winning national contracts, which they haven't had before. It puts them in what I think is a pretty good competitive advantage compared to the likes of Sonic (ASX: SHL) and Healius (ASX: HLS). 

And, of course, they've been topical in the press lately because they have proposed a merger with Healius. The industrial logic of a merger between those two is indisputable. It would be highly profitable for both sets of shareholders. And we're really encouraging both sets of management teams to have that conversation. And if that were to happen, that would be a tremendous outcome for us as ACL shareholders.

2023 was the year that everyone decided that obesity was cured by these weight-loss drugs. And I think 2024 is the year that reality will hit - that they are not a panacea for weight loss and that they aren't a panacea for sleep apnea, which is what ResMed treats. So that's one that I think will have a very big 2024.

#4. Healius (ASX: HLS)

But there's an interesting question there. For some reason, we don't have as many GP visits in Australia as one would expect. So the question is, what's going on there? And it seems to be that the most likely reason is that it's because bulk billing rates have fallen. So why is that happening? 

Well, for six years or so, the government rebates on Medicare for the GPs were lagging costs enormously. But the federal government, from November 1, has increased those by 30-50%. That probably means more GP visits again, and that probably generates pathology referrals. And it's really important for those businesses because most of their costs are fixed. The marginal test is almost all profit. So volumes are really important.

Now, it's a small company and it's a turnaround, so it's riskier than most. It's a small position for us, but it's high risk, high return. But it's worth thinking about because, fundamentally, it is in a very good industry overall.

#5. Metals X (ASX: MLX)

Some of the games that Light & Wonder have - Dragon Train, Monsters and Frankenstein - we think can take share. The early signs in Australia for some of those games are good, and they've got plenty of others in the bank that are going to launch over the next couple of years. 

Then we haven't talked about the North American market yet. So as they launch those games in Australia, they can push them into the North American market, and we think that can significantly drive earnings growth over the medium-term. Finally, they've put out an earnings target of $1.4 billion of EBITDA for 2025. We think they'll beat that quite comfortably. And on current earnings run rates, we think that they will be way ahead of consensus in terms of what they can deliver.

#8. MongoDB (NASDAQ: MDB)

It's a fantastic new venture. It's working really well. If you look at the pictures and see it, it looks just like other good mining jurisdictions, like Western Australia. So they've done a fantastic job bringing it on. And they also have additional optionality and projects in zinc and platinum. So there are a lot of things there, and the founder is a deal-doer. 

So this has got a good setup to both grow, have the commodity work, have corporate action, and have new projects. There are lots of things layered into that, which we quite like in a stock.

#11. Sendas Distribuidora (NYSE: ASAI)

Vihari Ross: I'm going to give you a very different one here. I'm going to go Sendas Distribuidora. That's a Brazilian cash-and-carry business. Cash and carry is the most popular grocery format in Brazil. The reason the stock is cheap is that they've had their series of troubles. The first one was they've had food deflation. That doesn't help any grocer around the world. They've also had interest rates go from 2% to almost 14%, which obviously hit the consumer hard. They also bought these supermarkets just before those interest rates started climbing and took their debt level up.

Now, we're in this situation where that debt level has peaked. It's passed three times net debt to EBITDA. And when you look at these stores that they bought, they've closed them, they've refurbed them and they've converted them, and they're opening up at three times the level of sales than when they bought them. They're also now generating significant amounts of free cash for this business. 

So you've got a company that's passed those troubles and you're going to be growing your operating profits at 20% per annum over the next three years, and stock's trading on a multiple of 14 times. So that's my pick for you today.

#12. Bell Financial Group (ASX: BFG)

Matthew Kidman: I'm going to stick with a financial stock. Earlier we talked about how markets can be up [in 2024], and I said small caps can be up even more. So what company is leveraged to a rising market? Almost like a second derivative. And I think one that could really do that is the Bell Financial Group, BFG, the big friendly giant. I think it can grow into a bigger company this year. 

What everyone knows it for, the stockbroking and the corporate advice and the capital raisings, that's the leverage play that's been dead the last two years. That can spike earnings. Underneath that are a couple of quite nice businesses that don't get recognition. So the online platform, Bells Online, has been growing nicely, with steady earnings. They've also got a bunch of services, the main one being margin lending. Another part of the business that's been growing quite nicely, because of not much competition in that area. 

So it has good underlying businesses, but you're going to get the real kick, the real leverage in the earnings when the market takes off. And I think that's one you can play, 50-60% this year, if it works.