3 stocks I bought last month

The market was starting in September and I bought this power. With interest rates falling, I had far too much of my portfolio parked in money market funds. I started moving some of that cash into stocks.

Some of the stocks I bought last month include Sirius XM Holdings (SIR -3.21%), PDD Holdings (PDD -0.33%)and Carnival (CCL -1.67%). Let’s take a closer look at why I’m willing to risk the safety of my cash for the opportunity presented by these three investments.

1. Sirius XM

I know pessimism is terrible when it comes to Sirius XM. The popularity of premium satellite radio has probably increased in the past year. Revenue gains have been anemic for a decade, turning negative in 2023. In a year of rising prices, Sirius XM was busted. Shares are down 53% in 2024, falling 27% in the past month alone.

The recent weakness is no surprise. The conversion of majority shareholder John Malone’s tracking shares into Sirius XM common stock — and a 1-for-10 reverse stock split as a result of the deal — triggered a wave of short-term selling in September. Growth investors have turned their attention to Sirius XM, but today’s situation could be music to the ears of opportunistic value investors.

Image source: Getty Images.

Shares of Sirius XM hit a new 12-year low on Tuesday. It’s a bleak stock chart for a company that has seen its revenue nearly triple and its earnings per share quintuple during that time. There’s no denying Sirius XM’s appeal as a value play here. The stock trades for just 7 times trailing earnings. Dividend investors will appreciate the 4.7% yield for a company that has increased its payout every year since distributions began eight years ago.

It’s not comforting to see Sirius XM’s subscriber base drop by 618,000 in the first six months of the year. The good news is that the platform still has 33 million subscribers. Churn is near all-time lows, as the problem is more a lack of new users than current listeners defecting. Advertising currently accounts for 20% of the revenue mix, and this is a lucrative demographic for marketers to reach.

Analysts see a return to revenue and earnings growth next year, and Sirius XM happens to have handily beaten Wall Street’s profit targets over the past year. Lower interest rates could spur an increase in car sales, a key driver of new satellite radio subscriptions. As a uniquely positioned media stock that reaches a massive captive audience, Sirius XM deserves better than to be cut by more than half this year.

2. PDD Holdings

Chinese growth stocks have been on the rise lately, and PDD happens to be one of the country’s fastest-growing players. PDD previously operated as Pinduoduo, the Chinese e-commerce site under the name it operates. It is now better known to US investors as the parent company of Temu, the operator of Chinese-sourced goods typically housed in US warehouses that trade at ridiculously low prices.

Growth is on a tear. Revenue rose 86% in its most recent quarter, and profitability doubled. This is not an accident. Annual revenue has exceeded 90% in five of the past seven years. PDD warns that margins will be tested in the short term as it launches initiatives to improve the platform. There are also concerns about how trade tensions will play out for the DDA. This is offset by stock valuation. PDD trades for just 16 times earnings and less than 11 times next year’s estimate. That’s a small multiple for a company that’s growing much faster.

3. Carnival

I owned three of the four publicly traded cruise lines heading into September. I completed the set by finally buying Carnival. Why did we save the biggest cruise line for last? Growth prospects or valuations may favor its peers, but Carnival is still destined to move higher as the industry’s rising tide lifts all ship operators.

I bought Carnival ahead of its better-than-expected third-quarter fiscal report at the end of September. Revenue and adjusted earnings per share rose 15% and 62%, respectively. Customer deposits hit another high for this time of year, a good sign that the next few quarters will also be strong.

As a growing theme for my September shopping list, Carnival is also cheaper than optimistic fundamentals warrant. Carnival trades for less than 15 times trailing earnings and less than 11 times forward earnings. With Carnival aggressively paying down its debt, some key cost components coming down and passengers willing to pay more for a watery adventure, it looks like a good ride from here.