Sierra Wireless (SW.TO)

It has had trouble holding onto gains of late last year. He has a small short on this one. Valuation is not great. It is quite a volatile stock.

Earnings expected to grow. 39% earnings growth expected next year. A good opportunity for them going forward. They are free cash flow positive. The overvalue has been burned off over the last three months.

Has been a great company in the last 3 years. They stumbled and fell apart early on, only to recapture its business as it moved into machine-to-machine and the Internet of Things. They made a very tactical change in their strategy when they acquired 2 companies in Europe, and the stock has worked very well ever since. He likes the story and thinks there is room to grow. The value proposition will be clearly understood after they report on the 1^st quarter. Wait to see what the company does in its 1^st quarter. Every time the stock drops below $40 that is a good entry point.

Don’t buy it for earnings. They have a tendency of messing up. To buy for a short term is not wise. The sector is hot and is growing very quickly. It is expensive (40 times forward earnings). The only thing that throws him back is their history. Own it longer term because of the sector. This will be the best pure play.

This has had a fantastic move in recent months. The technology sector is a fairly good sector to be in still, even though it has gone a long way. Chart shows it broke out from a level area of around $30 in the latter part of October. However, he is a little bit worried about the market and would suggest that you reduce your holdings if it is overweighting your portfolio.

Have done a bunch of acquisitions over the years that have done well for them. Earnings are expected to grow at a brisk 19% for the coming 2015 year. However, it is trading at a 42X price earnings multiple, with a reasonable ROE of 11%. Going out to 2016, earnings are expected to grow at 18%. Looks like the stock is pretty fully valued. If you own, he would consider shaving part of your holdings.

Great business, but very expensive stock. You don’t want to chase these things. Wait for a pullback here if you want to get in, otherwise take the money and run.

Good company but evaluation is pretty rich in his numbers. Estimated PE is 65, so as some point in time there is going to be a correction of valuation, or they have to have a massive surge in earnings to justify that valuation.

This has come up in the rankings in his process. He would like to see it pull back a little bit before entering it. If it were $1.50 cheaper than where it is now, that would be a good place to look at it.

Doesn’t like this one. Trading at about 40X 2015 earnings and the ROE is quite modest. Looks really expensive.

Modems. Market cap of about $690 million. Not making a ton of money. A 2% trailing return on equity in the 3% forecast, but they are slightly free cash flow positive at 1%. PE for 2014 is 56 times, but when you take the cash into account, the enterprise value comes down, but is still very high at 42X. Technically the stock appears to be oversold. If they can hit the numbers forecasted for 2015, it should be a great opportunity for them. Use this as a short-term trade as he expects technology stocks to advance over the next 3 months.

The level we are at right now, $24.50, is really significant. 200 day moving average is right around $24. This is really going to track gold. He would like to see the low of around $24 hold. If it doesn’t, it could probably go back to $22 and on the way to $18.50. Feels the risk/reward at this level is really good. He is looking at Pan American Silver (PAA-T).

An interesting play. There is a great M to M (machine to machine) opportunity with them, which will be a great growth business for many, many years. On a relative basis to the M to M guys they are valued quite cheaply. You have to pick your spots with this company. It is very, very volatile. Try to get at around $20 and ride it up. Wouldn’t be surprised if it was $30 over 1-1.5 years from now.

A great play, but you are probably going to get a better entry point over the next couple of months. Had a very soft quarter and talked about another soft quarter. The machine to machine component of what they do, allowing vending machines to take credit cards or machines that talk to each other, they can make the modems and circuitry for both sides. Very hot space right now with a ton of growth to it. If it gets back to $15, it is a screaming buy. If you own, continue to Hold.