Our Top 5 Tech Stock Picks For 2023
We own them in staff personal accounts and we're adding to them here at the lows.
DISCLAIMER: This note is intended for US recipients only and, in particular, is not directed at, nor intended to be relied upon by any UK recipients. Any information or analysis in this note is not an offer to sell or the solicitation of an offer to buy any securities. Nothing in this note is intended to be investment advice and nor should it be relied upon to make investment decisions. Cestrian Capital Research, Inc., its employees, agents or affiliates, including the author of this note, or related persons, may have a position in any stocks, security, or financial instrument referenced in this note. Any opinions, analyses, or probabilities expressed in this note are those of the author as of the note's date of publication and are subject to change without notice. Companies referenced in this note or their employees or affiliates may be customers of Cestrian Capital Research, Inc. Cestrian Capital Research, Inc. values both its independence and transparency and does not believe that this presents a material potential conflict of interest or impacts the content of its research or publications.
Not Shooting From The Hip Here
Stock prognosticating is a strange kind of business to be in. If you get it right a little more than you do wrong, and get it wrong in slightly smaller units than you get it right, you can be a rock star. Imagine if this is how it worked in medicine or science. Scary. But markets being as they are, which is to say a swirling void of emotion, money and leverage - that’s pretty much the third circle of any given religion’s version of the underworld - this stuff is difficult. If it was easy? Everyone would be doing it. And then the smart folks would ruin their party by zigging when the crowd was zagging, and then the whole Opposite Day thing would begin all over again.
Today after the close we’ll walk through our Top 5 Tech Stock Picks for 2023. Our underlying assumption here is that the market will be neutral to supportive over the course of the next year (since we expect rate hikes to slow, inflation to go no higher and likely fall, and GDP to do just fine). We’re looking for stocks that fulfil the following criteria:
The underlying companies must have superb fundamentals, meaning, predictable and growing revenues, high gross margins, cash generative or about to become so, and have sparkling clean balance sheets with no likelihood of a capital raise anytime soon.
The stock chart must be at a meaningful low so that the upside vs. downside risk / reward is attractive - and the low must be close enough that a logical stop-loss can be used which both protects capital in the event of a price drop, but isn’t so far away from the current price that tripping the stop loss will blow a hole in your account.
The fundamental valuation must be at a low level for that particular stock vs. its growth rate and its history, so that if if market multiples remain flat in 2023 the stock can move up anyway.
The stock must trade with sufficiently large moves that a meaningful shot at big upside within a year is available.
And finally, the whole opportunity must be sufficiently compelling that if 2023 is a meh kind of year, you would be happy to just hold the name and wait for a better 2024.
That’s quite a needle through which to try to thread five stocks. However, since we spend literally all day and most nights thinking about this stuff (hobbies being in short supply around here), we can make a go of it. We can be wrong, will be wrong with some of them. But we’re not shooting from the hip here. This here tech bust isn’t our first rodeo, nor even our third. All the newly-christened tech experts from 2020-21 are now macro experts. (They were crypto experts in 2020-21 too but no-one wants to talk about that right now). Nope, this misery-everywhere, it’s-all-over-for-tech-forever? This is our wheelhouse, right here.
So join us. Cestrian Tech Select Pro members are invited to sign up for today’s webinar at 5pm Eastern where we’ll walk live through our Top 5 Tech Stock Picks. We’ll go over the fundamentals with you, the valuation, the stock charts, our views on risk management and upside price targets. Live and open-mic, as always for our webinars.
If you’re not yet a Pro member? Sign up today. Come 1 January this new Pro tier will be a $999/yr service. In December? Just $499/yr (for as long as you remain a member - no price hikes for existing members).
So that’s a half-off offer.
Less if you subscribe for the Premium edition already, since we’ll roll in the unused part of your existing subscription. You can sign up for Pro if you’re a casual reader here, or if you’re an existing paying Premium member, right from the button below.
Any problems, you hit a snag in the process? Just email minerva@cestriancapital.com and let us know - we’ll take care of you from there. Or if you’re reading this as an email, just reply to the email, we’ll see your reply.
Registration link for current Pro members follows after the signup link. See you at 5pm Eastern today - live!