Title: Best Buys April 2026 — Top 5 stocks right now Show: Compounding Quality (compoundingquality.net — Pieter Slegers' quality-investing newsletter) Guest: Pieter Slegers (author) Date: 2026-APR-05 URL: https://www.compoundingquality.net/p/best-buys-april-2026 Length: written post (paid) — no timestamps Note: Verbatim article text captured via logged-in session; page chrome (like/share counts, nav) removed. Charts referenced as "Source: Fiscal.ai" are images not reproduced here.
By monthly tradition, you'll get an update on our Best Buys of the month.
What's going on in the markets? And what are our favorite stocks?
Let's get a little bit wiser today.
March 2026
The S&P 500 declined by -5.3% in March.
Investors are extremely fearful today according to the Fear & Greed Index.
Best & Worst Performers
This overview shows you the best and worst performers in our investable universe.
Worst performers
The cheaper we can buy great companies, the better.
Here are the worst performers of the past month:
A company like KKR starts to become more and more interesting if you ask me.
Best performers
These stocks did well over the past month.
Spotlight: Cintas Corporation ($CTAS)
How does the company make money?
Cintas provides uniform rentals, cleaning supplies, and workplace safety products to American businesses.
They operate through three primary segments:
Uniform Rental & Facility Services (~77% of revenue): Cintas delivers clean uniforms, floor mats, mops, and restroom supplies to over 1 million business customers.
First Aid & Safety Services (~12% of revenue): First aid kits, AEDs, and safety training.
Other Revenue (~11% of revenue): Inspection and maintenance of extinguishers and sprinkler systems, as well as direct uniform sales.
Why does it deserve to be in the spotlight?
Cintas is a tollbridge on the physical workplace.
From hospitals to restaurants to manufacturing plants, every business depends on clean uniforms, mats, and working fire extinguishers to operate safely and efficiently.
Cintas has a very strong business. Their moat is built on two things:
Route Density: Cintas has over 12,100 local delivery routes, serving more than 1 million businesses. The more customers they have on a single street, the lower their fuel and labor costs per stop.
High Switching Costs: Cintas service is deeply integrated into a company's operations. Customers sign 3-to-5-year contracts, and chaining vendors is a serious headache, giving Cintas a 90%+ customer retention rate.
The company has grown at very attractive rates in the past.
The UniFirst Merger
The biggest story for Cintas right now is the announcement to acquire UniFirst ($UNF) for $5.5 billion.
This merger would combine the #1 and #3 players in the industry.
Buying UniFirst would add: 300,000 extra customers; $2.4 billion extra revenue.
Even though the combined company would be very large, there is still a lot of market share left to capture.
Another interesting thing? Cintas has much better margins than UniFirst.
Which means that if Cintas takes over UniFirst's, they should be able to improve the margins and make more profit.
The combination of Cintas and UniFirst would generate about $11.2 billion in revenue.
The next largest competitor would be Vestis (VSTS) who only generates one fifth of this revenue.
The big question is whether regulators will approve the acquisition.
Cintas is a quality company for sure, but you rarely get it at a bargain price.
Today, the stock is down over 25% from its highs, but it still trades at a forward P/E >30x.
But it's still not very cheap if you ask me.
It's a company to keep on our radar.
If the price keeps falling, it could become a very interesting opportunity.
We would be interested at a Forward PE of 25x.
This means we would love to buy the company at a stock price of $132 (current stock price: $174).
Best Buys April 2026
Only the best of the best is good enough for us.
Let's dive into our five favorite buys for the month.
5. MercadoLibre ($MELI)
How does MercadoLibre make money?
MercadoLibre can be seen as 'the Amazon of Latin America'.
The company generates money in two ways:
Commerce (56% of Total Revenue): MercadoLibre takes a cut every time someone buys or sells on its platform. They also handle shipping through Mercado Envíos, making it even harder for competitors to break in.
Fintech (44% of Total Revenue): If you pay through Mercado Pago, the company earns yet another fee. They also offer loans and credit cards to customers.
The size of MercadoLibre's commerce platform makes it difficult for other companies to compete with.
Every single year, they sell more and more items.
But there's another important part to their commerce business.
In Latin America, shipping is difficult.
MELI built its own logistics network (Mercado Envios), which now delivers the vast majority of its packages.
This infrastructure is nearly impossible for a competitor to replicate quickly.
Mercado Pago is also growing quickly.
MercadoLibre is quickly becoming the PayPal of the South.
In many Latin American countries, people use Pago to pay for groceries, gas, and utilities, not just online shopping.
MercadoLibre benefits as these two businesses work together.
Shopping leads to Payments (Mercado Pago). Payments give MercadoLibre data to offer Credit (Mercado Credito). Credit gives customers more money to go back and Shop more.
Unlike mature U.S. retailers, MELI is still operating in a region with low e-commerce penetration, which is why the market is expected to grow at 20% per year through 2033.
MercadoLibre's Revenue and Profits have been growing even faster than the market.
Despite the growth, the stock is down more than 35% from it's high.
Why?
They slashed shipping costs to fight off competitors like Temu. This moved more products but lowered their profit margins.
Management announced a $14 billion investment plan for 2026. Investors wanted to see higher profits, but the company chose to spend on growth instead.
Their banking arm (Mercado Pago) is lending money fast, and investors are scared that high inflation in Latin America will lead to people defaulting on those loans.
For long term investors, the stock is currently trading at one of the lowest valuations we've ever seen.
4. Fair Isaac Corporation ($FICO)
How does Fair Isaac make money?
FICO has a monopoly in credit scores in the United States. They license their proprietary scoring algorithm to major credit bureaus (Equifax, Experian, and TransUnion).
The company also provides software to banks that helps them make and automate decisions.
Every time you apply for a credit card, a car loan, or a mortgage, FICO gets paid a fee to provide your credit score.
You can see it as a toll bridge on lending.
FICO has a very strong moat based on network effects and regulatory integration.
90% of top U.S. lenders use FICO.
The system is hard-coded into the global financial infrastructure.
ROIC remains exceptionally high (often above 50%).
In case you didn't notice it already, FICO is a very profitable business with strong pricing power.
FICO's fee is a tiny fraction of the cost of a loan (often just a few dollars), but the value it provides is immense.
That's why they can continue to raise prices without losing customers.
Just look at how the margins have increased over the past decade.
The stock has continued to fall due to panic about AI.
The most pessimistic bear case is that lenders will use AI to vibe-code their own scores.
However, banks are incredibly risk-averse and regulated.
No CFO is going to swap a proven, legally-accepted FICO score for an unproven AI model to save a few dollars per loan.
A more realistic worry is the competition from VantageScore.
It's a rival credit score, created by the three big credit bureaus Equifax, Experian, and TransUnion.
It works similarly to FICO, and some lenders have started using it instead.
The bigger concern is that the U.S. government appears to be accepting it.
Fannie Mae and Freddie Mac (government run mortgage companies) have been encouraged to accept VantageScore as an alternative to FICO.
That said, FICO is deeply embedded in the financial system after decades of use.
Replacing it won't happen overnight, and the fear around FICO creates an opportunity.
The stock is currently near the lowest valuation we've seen in a decade.
3. MSCI Inc. ($MSCI)
How does MSCI make money?
MSCI provides financial data and creates indexes for international markets.
They make money in two ways:
Asset-based fees: Every time an investor buys an ETF linked to an MSCI index (like the MSCI World or ACWI), MSCI collects a small fee based on the Assets Under Management (AUM).
Subscriptions: They sell high-margin data and analytics software to banks and asset managers.
MSCI has several things that make it an interesting company.
Passive Investing Tailwinds
The shift from active to passive investing is an unstoppable structural trend.
There is currently over $2.3 trillion linked to MSCI indices.
And the number keeps going up.
Sticky Revenue
Once a bank or ETF provider integrates MSCI data into their systems, the switching costs are massive.
Subscription revenue has been growing at around 10% per year, and the retention rate consistently sits above 90%.
Buybacks
MSCI is also a cannibal stock.
They consistently buy back their own shares.
Investors are worried that AI will hurt MSCI's analytics business, or allow firms to create their own custom indices for free.
Insiders don't seem worried, they've been buying shares recently.
This makes sense, as MSCI currently trades near its cheapest valuation level of the past 10 years.
2. 3i Group ($III)
How does 3i Group make money?
3i Group is a UK-based investment company. They invest their own balance sheet into mid-market companies.
Their crown jewel is Action, a European non-food hard discounter that accounts for roughly 76% of their private equity portfolio.
Action operates like a European Costco or Dollar General.
They have a cost advantage as they enjoy economies of scale:
A bigger size allows Action to buy products in bulk. Bulk buying lowers product costs. Lower costs mean lower prices for customers. Lower prices attract more customers. More customers lead to more growth, strengthening Action's advantage.
This creates a powerful cycle where everyone benefits.
Lower prices lead to more customers, which leads to more volume and even lower prices.
This is what Nick Sleep called Scale Economies Shared.
It's what led him to great returns in companies like Amazon and Costco.
Action is doing exactly the same.
The number of Action stores keeps growing, doubling every 4 to 5 years.
Other PE firms would have likely sold Action to realize fees.
But 3i acts more like a holding company than a traditional PE firm, holding onto its best assets for decades.
That's how they've doubled their Net Asset Value (NAV) in the last three years.
But the stock is down nearly 50% in the last 6 months.
What happened?
Action's sales growth slowed from around 10% to closer to 5%.
In France (its second-largest market), competition is forcing Action to lower prices, which means less profit. Sales there only grew about 2% recently.
3i thinks Europe is becoming saturated with Action stores. It's looking to expand Action to the United States, and is committing €350M–€400M to this rollout.
This price drop has 3i Group currently trading at a clear discount to its Net Asset Value (NAV).
1. KKR & Co. Inc ($KKR)
How does KKR make money?
KKR is an American investment company (Private Equity). They use money from big clients (like pension funds) to buy and grow other companies. They also have an insurance business.
The asset management business earns two types of fees.
Management Fees: KKR takes a small percentage of all the money they manage, every single year, no matter what. These are like subscription fess that are paid no matter how the investments do.
Performance Fees: When KKR sells an investment for a profit, they keep a portion (usually around 20%). If they don't make money, they don't get this bonus.
In private equity, reputation is everything.
KKR has a 50-year track record that makes them the first choice for massive institutions.
That's why their Assets Under Management keep growing.
They've tripled (!) their AUM over the past 5 years.
It looks like that trend will continue.
In 2025, KKR raised a record $129 billion in new capital.
Around $126 billion of that is in cash waiting to be deployed.
KKR is in a great position to buy up cheap assets if prices continue to fall.
Even though Assets Under Management and Revenue continue to rise, the stock is down close to 50% off its highs.
Investors are selling KKR's stock for three reasons:
The economy: People are worried about a recession or slowdown.
Their software investments: KKR owns a lot of software companies, investors are worried AI will disrupt their business models.
Private credit: KKR lends money to companies that can't borrow from traditional banks. Investors are worried those companies might struggle to pay it back if the economy weakens.
But insiders continue to buy.
That's a great signal from the people who know the business best.
Conclusion
That's it for today.
Here are the five companies we covered:
MercadoLibre (MELI): The dominant e-commerce and fintech ecosystem of Latin America.
Fair Isaac (FICO): The essential toll-bridge for the American credit scoring system.
MSCI (MSCI): The global gold standard for financial indices and data analytics.
3i Group (III): A UK-based investment company with the European retail giant Action as its crown jewel.
KKR (KKR): An alternative asset manager with permanent insurance capital.
Everything in life compounds Team Compounding Quality
Book: Order your copy of The Art of Quality Investing here
Used sources: Interactive Brokers (portfolio data and executing all transactions); Fiscal.ai (financial data)