After a rough start to the year, the S&P 500 index is now showing signs of recovery, and Calixto Global Investors’ Eduardo Costa is hopeful the benchmark will continue up in the coming months. The portfolio manager is bullish on the following two stocks in particular.
Five9 Inc (NASDAQ: FIVN)
His first pick is the California-headquartered cloud-based call centre software company – Five9 Inc that’s still down close to 40% from its high in early August 2021. On CNBC’s “TechCheck”, Costa said:
Five9 is incredibly well-positioned to continue to take market share in a market that is only 25% penetrated today. So, it’s a stock that peaked at 20 times revenue, now trading at nine- or ten-times forward revenue and accelerating. That feels really good to us in our portfolio.
A growth rate of 40% with margins at 20% makes Five9 a quality name in the software space, he added. Also on Tuesday, William Blair analyst Matt Stotler initiated coverage of FIVN with an outperform rating.
DoorDash Inc (NYSE: DASH)
Costa has also been loading up on DoorDash Inc – the largest U.S. food delivery company that has more than doubled its market share over the past three years. He added:
They’re currently expanding into convenience stores and supermarkets. So, we see potential for acceleration coming from those new market opportunities they’re going after. The stock has sold off from $240 down into the low $100s. This is a very compelling opportunity.
The strength of its balance sheet that it’s using to invest aggressively in growth opportunities was among other reasons why he’s bullish on DoorDash. In November, the food delivery company said it will buy Wolt for $8.10 billion in stock to accelerate its international growth.
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