Both companies have had their ups and downs in recent years. And like many high-flying tech stocks, share price volatility‘s been plentiful. Yet, both seemingly have a lot of potential to offer.

A cybersecurity comeback story?

Out of these two stocks, Okta has definitely been the more disappointing performer. While shares are up a respectable 13% over the last 12 months, the stock’s still trading firmly below its peak 2021 levels. The drop in valuation’s partly due to the recent stock market correction.

But Okta landed in particularly hot water after suffering a security breach. Needless to say, that’s not a good look for a cybersecurity business specialising in identity verification.

The security flaw’s since been rectified. And management appears to have done a good job getting the ship back on course. In fact, its latest results actually beat expectations with double-digit revenue growth and delivering net profits for the first time.

Pairing this with the announcement of new artificial intelligence (AI) features that can detect and take action against unusual activity, Okta seems to be in a much stronger position. In terms of competition, the biggest threat appears to be Microsoft, which has far deeper pockets. And Okta’s also still dealing with some legal battles related to its earlier data breaches that could end unfavourably.

However, its actual technology continues to be rated one of the best solutions in the world by customers, according to Gartner Peer Insights. So while there’s a notable risk, the long-term potential of this business remains intact. That’s why I think it might be among the best shares for investors to consider buying now, providing they’re comfortable with risk.

AI tailwinds for Datadog

In a separate region of cybersecurity, Datadog’s already leveraging AI to fuel its growth. Its latest results far exceeded analyst projections, delivering 26% revenue growth.

Its leadership reputation within the data observability space is attracting new customers into the fold while simultaneously encouraging existing customers to spend more. In fact, the number of clients contributing more than $100,000 in annual recurring revenue has now hit 3,490, which is up from 3,130 a year ago.

With that in mind, it’s not so surprising that Datadog’s share price has fared far better than Okta’s, rising by 40% in the last 12 months and 315% over the last five years. However, with AI spending expected to continue increasing next year along with new product launches, this might be the tip of the iceberg.

However, just like Okta, Datadog isn’t short on competition chasing the same opportunities. And management’s some regulatory threats to contend with as well. Regulatory changes surrounding data, privacy, and security could introduce new compliance complications as well as restrict platform capabilities.

Nevertheless, I remain optimistic about the long-term growth potential, even with these risks. That’s why I’ve already added some more shares to my portfolio this month.

The post Looking for the best shares to buy? Here are 2 I’ve got my eye on appeared first on The Twelfth Magpie.

However, the Nasdaq is home to some exciting opportunities that could propel my wealth to new heights in the long run. And with many valuations still in the gutter, I recently went on a shopping spree, snapping up more shares in Datadog (NASDAQ:DDOG).

A new leader in cloud technology?

Datadog isn’t a household name. The platform is operating behind the scenes of over 25,000 enterprises worldwide, enabling businesses to monitor and manage the flow of inflation across their entire technology stack. Apart from letting companies control their applications from a single location, Datadog triples as a cybersecurity, compliance and efficiency tool.

Many businesses, especially in the tech sector, are trying to cut costs. Cloud platform providers have had to endure a significant slowdown in spending. And yet an exception seems to have been made for this firm since the latest earnings report was pretty impressive.

Total revenue jumped 25% year-on-year while customers spending more than $100,000 increased by 20%. An estimated 82% of clients use two or more of the platform’s additional subscription modules. And the company has recently announced the release of new modules, including AI-powered solutions.

This ultimately pushed operating profits to just $4.2m shy of entering the black in the most recent quarter. And when paired with a hike in revenue and earnings guidance, shares of Datadog have been on the rise. They’ve surged almost 40% since the start of November.

Every investment carries risk

Datadog continues to integrate itself at the heart of its customers’ operations. But that also makes it an increasingly attractive target for ‘malicious mongrels’. A lot of sensitive data and information is flowing through its platform. And if the company were to suffer a breach, it could expose this business to some significant reputational damage.

That could be especially problematic given that there are competing solutions to Datadog. And I’d be shocked if they didn’t use such an event as a perfect opportunity to lure customers away and steal market share.

It’s also critical to realise that the valuation, while down nearly 50% from its peak in October 2021, still trades at lofty multiples. As such, volatility is to be expected, especially should the company start to fall short of investor expectations.

Nevertheless, Datadog has a fairly consistent track record of beating analyst predictions. It’s yet to enter the realm of profitability. But its impressive free cash flow generation has made it financially independent, with $2.2bn of cash in the bank, enough to cover all of its outstanding liabilities.

Therefore, while there’s no denying the high-risk profile surrounding this growth stock, it’s one I feel is worth taking, given the long-term potential. That’s why I’ve already been adding some more shares to my existing position.

The post 1 Incredible growth stock I just bought for 2024 and beyond appeared first on The Twelfth Magpie.

Datadog

What it does: Datadog provides an observability platform to manage and monitor the flow of data between cloud-based applications.

By Zaven Boyrazian. Datadog (NASDAQ:DDOG) is a software-as-a-service enterprise that enables its customers to monitor their cloud-based applications. The system can be connected to over 600 industry-standard technologies like Salesforce and AWS, enabling customers to control and observe the flow of data throughout their entire pipeline from a single platform.

Apart from identifying bottlenecks to improve efficiency, it serves as a robust cyber-security and regulatory compliance tool that’s used by over 25,500 companies worldwide. And that includes the London Stock Exchange itself.

The application performance monitoring sector is not short on competition. A recent report by Gartner revealed 19 businesses operating in this space. And while Datadog is considered a leader, fierce competition from the likes of Dynatrace and New Relic could impede future growth.

Nevertheless, given the group’s impressive track record and cash-generating business model, I’m confident that Datadog could be a multi-bagger for my portfolio in the long run.

Zaven Boyrazian owns shares in Datadog.

Primary Health Properties

What it does: Primary Health Properties leases healthcare buildings in the UK and Ireland. The majority of its rent comes from the NHS.

By Stephen Wright. Shares in Primary Health Properties (LSE:PHP) have been falling recently. And the lower the share price goes, the better I like it. 

Rising interest rates have been weighing on the market value of the company’s assets, which is why the stock is down 19% over the last 12 months.

Exactly when this will recover, I don’t know – probably when the Bank of England starts to lower interest rates. But I’m not bothered by this, since my investment in the business isn’t based on the value of its assets.

Instead, I’m interested in the cash flows the company generates. And management announced an extra £3.1m in income during the third quarter, with more to come by 2024. 

With its rent roll funded mostly by the NHS, there’s a risk that a change in government could bring uncertainty for the business. I think the 7% dividend yield justifies the risk of buying the stock here, though.

Stephen Wright owns shares in Primary Health Properties.

Revolve Group

What it does: Revolve Group is an online fashion retailer that specialises in selling high-end clothing and accessories.

By Muhammad Cheema. Revolve Group (NYSE:RVLV) shares have had a pretty rough couple of years.

They peaked in November 2021 at $86.01 apiece, but have since fallen by 85.4% to $12.53 at the time of writing.

This is because its revenue and profit have declined slightly due to tough global economic conditions. This poses a short-term risk to carrying its shares.

However, I’m a long-term investor.

Between 2017 and 2022, its revenue grew from $400m to $1.1bn. As the economy stabilises, I believe it will return to this level of growth.

Furthermore, I believe its use of artificial intelligence (AI) will continue to give it an edge over competitors.

It collects data analytics on its customers purchasing decisions for other brands listed on its site. This allows it to emulate successful brands based on that analysis.

With a current price-to-sales (P/S) ratio of 0.9, its stock are too cheap for me to ignore, and I’ve recently bought more.

Muhammad Cheema owns shares in Revolve Group.

Rightmove

What it does: Rightmove operates the UK’s largest property search portal. Through its website and app, users can search for properties to buy or rent.  

By Edward Sheldon, CFA. Rightmove (LSE: RMV) shares recently tanked after it came to light that rival OnTheMarket is being acquired by American online real estate powerhouse CoStar Group. I took the opportunity to buy more of the stock for my portfolio.

Rightmove is an exceptional company, to my mind. Not only does it have a strong brand and a very high market share (around 85% of the UK property search market), but it also has an excellent track record when it comes to revenue growth and profitability (it’s one of the most profitable companies in the FTSE 100 index).

Now, after the recent share price fall, Rightmove shares were trading on a forward-looking price-to-earnings (P/E) ratio of about 18. That just seemed too cheap to me given the company’s high-quality attributes, so I bought more.

It’s worth pointing out that the acquisition of OnTheMarket does add a bit more risk to the investment case. I think Rightmove is likely to remain the number one player in the UK property search market, however, due to the strength of its brand.

Edward Sheldon owns shares in Rightmove

Safestore

What it does: Safestore is the UK’s largest self-storage unit provider, with 131 stores nationwide. 

By Charlie Keough. Despite over a 2% rise in the past month (at the time of writing), shares in Safestore (LSE: SAFE) have fallen by over 20% in 2023. And with that, I decided to top up my position.  

There are a few reasons I’m attracted to the stock. First up, it looks cheap, with a price-to-earnings ratio of below 6. This is more than half of the FTSE 250 average. 

What’s more, the stock also has a dividend yield of over 4%. In the last decade, its dividend has increased by a whopping 400%. 

The business has posted strong growth in recent years. With it asserting its position as a leader in the UK, it’s now turned to European expansion as it continues to grow.  

The debt on its books could be a slight concern. Aggressive interest rate hikes and the impact this will have on property prices could also impact the firm’s operations. 

However, with plans for expansion, a low valuation, and a solid yield, I decided to buy more of the stock. 

Charlie Keough owns shares in Safestore.  

Scottish American Investment Company

What it does: Scottish American Investment Company is a FTSE 250 investment trust that aims to grow capital and the dividend faster than inflation.

By Ben McPoland. I’ve recently added to my holding in Scottish American Investment Company (LSE: SAIN). Or SAINTS, as the 150-year-old trust is commonly known as.  

My conviction in the management team’s stock-picking has grown stronger. Why? Well, the top two holdings are Microsoft and Novo Nordisk. Both companies are firing on all cylinders right now.

Excitement around AI has pushed up the share price of Microsoft (part-owner of OpenAI, the maker of ChatGPT) by 48% this year. Meanwhile, Novo Nordisk announced that Q3 sales of its weight-loss drug Wegovy rose more than eightfold year on year to nearly $900m.

Incredibly, SAINTS hasn’t cut its dividend since 1938! And the payout is soon expected to increase for the 49th successive year.

Granted, the yield today is fairly modest at 3%, which might mean the shares get overlooked for more eye-catching yields. But I’m happy to aim for sustainable, long-term dividend growth over yield size here.

Finally, the shares are trading at a 9% discount to the trust’s underlying assets. That’s pretty rare, historically speaking.

Ben McPoland owns shares of Scottish American Investment Company. 

Zotefoams

What it does: Zotefoams is a leading manufacturer of specialist foams, such as those used in Nike running shoes and in airline seats.

By Roland Head. I recently bought some Zotefoams (LSE: ZTF) shares, after the firm appeared in a search I made for reasonably priced growth stocks.

Current trading seems healthy to me, and management says the company is on track to hit City earnings forecasts for 2023. Zotefoams has also just expanded its exclusive deal with Nike, which could support further growth.

Looking further ahead, there’s some possibility that the company’s new ReZorce recyclable packaging material – used in drinks cartons — could become a big driver of earnings.

My main concern is probably that if the global economy slows, Zotefoams could see weaker demand from some of its top customers.

One other factor worth considering is that longtime chief executive David Stirling has just announced his retirement. Mr Stirling has been in charge since 2000.

However, the balance of risk and reward looks attractive to me at the moment. I think Zotefoams could perform well from current levels.

Roland Head owns shares in Zotefoams.

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