May 2025 Stock Watch List

As I'm writing this blog post, it's Friday, April 11th. The temperature here in Central Wisconsin is expected to reach a high of 55 degrees Fahrenheit today on a partly sunny forecast. By the time this blog is published on April 15th, it will be my 28th birthday!

Now that the next month is just a few weeks away, it's a good time to start looking at capital deployment for May 2025. Without further ado, let's jump into it!

Stock #1: Amazon (AMZN)

The first stock on my watch list for May 2025 is Amazon. Interested readers can find my in-depth investment thesis in my March Seeking Alpha article or the gist of it in my February 2025 Stock Watch List.

Essentially, AMZN holds leadership positions in industries with positive long-term outlooks, including cloud computing, digital advertising, and e-commerce. The company's cash and marketable securities balance surpassed $100 billion in Q4 2024. Trading at a forward 12-month P/OCF ratio of just 12.5, AMZN's shares are also substantially undervalued at the current $181 share price (as of April 11th, 2025). My fair value estimate is right around a P/OCF multiple of 21, which would imply a fair value above $300 a share.

Stock #2: Brookfield Asset Management (BAM)

Next on my watch list for next month is Brookfield Asset Management. Curious readers can peruse my Seeking Alpha article from earlier this month for my investment thesis. Alternatively, the gist can also be found in my April 2025 Stock Watch List as BAM is once again on my watch list.

BAM's reputation is highly trusted among alternative asset managers. The industry's share of global AUM is expanding as institutional investors are increasingly turning to alternative assets to diversify, manage volatility, and enhance total return potential. BAM also possessed $1.8 billion in liquidity to close out 2024 and an A- credit rating from S&P. Lastly, I believe shares could be worth $51 each. Compared to the $46 share price (as of April 11th, 2025), this would represent a moderate discount to fair value for the 3.8%-yielding stock.

Stock #3: Realty Income (O)

The third stock on my watch list for May 2025 is Realty Income. Readers can check out my March Seeking Alpha article for my detailed investment thesis. Otherwise, the crux of my thesis can also be found in my March 2025 Dividend Stock Watch List blog post.

O continues to be set up for mid-single-digit annual AFFO per share growth. The balance sheet is A-rated. O's 6% dividend yield is also comfortably covered by AFFO. The forward 12-month AFFO ratio is just 12.6, which is much less than my fair value multiple of 16.5. Relative to the current $54 share price (as of April 11th, 2025), this would be a 24% discount to my fair value estimate of $71 a share.

Concluding Thoughts:

That's all for now. In times of market turbulence, I believe there are always smart investments to be made. These three lend credence to the argument, each possessing strong business models, A-rated balance sheets, and trading at favorable valuations. Overall, allocation to these assets should keep me near my 3% targeted dividend yield.

Discussion:

Are any of AMZN, BAM, or O on your radar for next month?

If not, what stocks are on your watch list for May 2025?

Thanks for reading and please feel free to leave a comment below!