As February 2025 dawns, the investment landscape is brimming with opportunities for those with an eye for value and growth. The markets have kicked off the year with vigor, with the Dow Jones up 5.52% and European markets outpacing the U.S. Yet, with earnings season stirring the pot of market volatility, now's the time to make strategic moves. Whether you're looking for the steady reliability of Canadian National Railway, Moderna's high-risk/high-reward potential, the discounted luxury of LVMH, or the disruptive innovation of SoFi, this month offers a diverse menu for investors. Plus, with quantum computing on the rise and safe havens like money market funds and T-bills, February presents a unique moment to diversify and optimize your portfolio. Are you ready to capitalize on these market moves?

Today’s episode - Opportunistic

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📈February's Best Investment Moves: Where Smart Money is Headed

The Market at a Glance: February’s Investment Landscape

January 2025 has come and gone, and the markets have navigated the start of the year with resilience. The Dow Jones Industrial Average has outperformed expectations, climbing 5.52%, while the S&P 500 and NASDAQ have gained 3.8% and 3.6%, respectively. Interestingly, European markets have surged beyond U.S. indices, with Germany skyrocketing 99.5% and France up 88.2%. With earnings season in full swing, volatility is expected, making now a critical time to position capital wisely. Below are four stocks that present compelling opportunities this February based on their fundamentals and growth potential.

1. Canadian National Railway (CNI): A Reliable Compounder with Growth Potential

For those seeking stability amid market fluctuations, Canadian National Railway (CNI) stands out as a solid investment. This transportation giant, with a market cap of $66.72 billion, pays a steady dividend yield of 2.32% and trades at a P/E ratio of 19.1. The company operates an extensive rail network spanning Canada and the U.S., serving as a crucial backbone for North America’s supply chain.

While not a high-growth stock, CNI is a cash-generating powerhouse. Free cash flow is projected to decline slightly in 2025 but is expected to rebound strongly, growing 7.6% in 2026 and 8.8% in 2027. Over the past decade, the company has reduced outstanding shares by 22.3%, enhancing shareholder value. Additionally, over 85% of traffic originates on Canadian National’s network, with 65% both originating and terminating on its infrastructure, giving it a competitive advantage. With diversified revenue streams across petroleum, grain, and intermodal transport, CNI remains a strong long-term holding for investors seeking steady compounding returns.

2. Moderna (MRNA): A High-Risk, High-Reward Biotech Play

Moderna has experienced a volatile ride since its pandemic-era peak. With a market cap of $15.8 billion, the stock has plummeted 74% from its highs, but this decline may present a strategic entry point for long-term investors. The company is investing heavily in its pipeline, with 10 new products expected to launch by 2028, spanning mRNA-based cancer vaccines, RSV vaccines, and other cutting-edge treatments.

While revenue is projected to decline 31.7% in 2025, growth is expected to return in 2026, with long-term potential remaining strong. The average analyst price target is currently 53.4% above Moderna’s current share price. A key partnership with Merck in developing a personalized skin cancer vaccine has shown promising results, potentially unlocking a lucrative new revenue stream. Additionally, AI-driven drug discovery is accelerating Moderna’s R&D capabilities, positioning it at the forefront of biotech innovation. For those willing to embrace some risk, Moderna offers a high-upside opportunity in the healthcare sector.

3. LVMH (LVMUY): A Luxury Titan at a Discount

For investors seeking non-tech opportunities, LVMH offers an attractive entry point into the luxury sector. The French conglomerate, with a market cap of $63.95 billion, has recently faced headwinds, with its stock declining 13% over the past year. However, luxury brands thrive on exclusivity and brand loyalty, making downturns the best times to accumulate shares.

LVMH generates revenue through five core business segments: wine & spirits, fashion & leather goods (its largest segment at 48% of revenue), perfume & cosmetics, watches & jewelry, and selective retailing. Despite macroeconomic challenges, its operating margin remains strong at 23.1%, and free cash flow is projected to grow 8.7% annually through 2027. Although the Chinese market slowdown has impacted luxury demand, LVMH continues to outperform most of its competitors, except Hermes. Given its historical resilience, this dip presents a compelling opportunity for long-term investors to enter the luxury market at a discount.

4. SoFi Technologies (SOFI): A Disruptive Fintech Powerhouse

SoFi Technologies has rapidly positioned itself as a major player in the fintech space. With a market cap of $17.68 billion, the stock has surged 92% over the past year. However, following its latest earnings report, shares dipped 10%, largely due to concerns over conservative Q1 EPS guidance. Despite this, management has reaffirmed its aggressive 2026 earnings targets and expects 20-25% EPS growth annually beyond that.

One of the most significant developments was the announcement of a $5 billion loan platform deal, highlighting SoFi’s ability to scale its high-margin fee-based revenue streams. While its technology platform remains a weaker segment, the company’s core financial services business continues to grow at a robust pace. If the stock experiences further dips, it could present an attractive buying opportunity for long-term investors.

Quantum Computing: A High-Stakes Investment in the Future

Beyond these individual stock picks, an emerging sector worth monitoring is quantum computing. Companies like Rigetti Computing (RGTI), Quantum Computing Inc. (QUBT), and D-Wave Quantum Systems (QBTS) are leading the charge in this transformative technology. Quantum computing is expected to revolutionize fields such as pharmaceuticals, materials science, and financial modeling, with the industry projected to be worth up to $2 trillion by 2035.

Among the frontrunners, Rigetti is developing next-generation quantum processors, while IonQ (IONQ) has secured key partnerships with AWS and the U.S. Air Force. Although these stocks are speculative, they offer massive upside potential for investors with a high risk tolerance and a long-term outlook.

Money Market Funds vs. Treasury Bills: Where to Park Cash

For investors seeking safe returns while deciding on equity positions, money market funds and Treasury bills (T-bills) provide viable options. As of February 2025, six-month T-bills yield 5.1%, while one-year T-bills are at 4.9%. Money market funds, such as Vanguard’s Federal Money Market Fund (VMFXX), offer a 4.28% return with daily liquidity, making them an attractive alternative for short-term capital preservation.

Investors who prioritize flexibility may prefer money market funds, while those looking to lock in a guaranteed yield may find T-bills a better option. Understanding these nuances allows for optimized cash management in a volatile market.

Key Takeaways: Positioning for Success in February 2025

1. Diversify Strategically – CNI offers stability, Moderna presents biotech upside, LVMH provides exposure to luxury markets, and SoFi is a fintech disruptor worth watching.

2. Stay Ahead of Trends – Quantum computing is an emerging sector that could yield significant returns in the coming decade.

3. Manage Cash Efficiently – Money market funds and T-bills remain attractive options for preserving liquidity and earning steady returns.

4. Think Long-Term – Market fluctuations are inevitable, but strong fundamental investments remain the best path to long-term wealth generation.

With earnings season underway, February is a pivotal time to reassess and refine your investment strategy. Stay informed, remain patient, and take advantage of market inefficiencies to secure long-term gains.

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