Sierra Wireless (SW-T)

They make choips for data communications, for example used in cars to talk to each other. It's a competitive business. You can hold it here, but the stock needs new excitement over the chips to get the stock going. A wait and see story.

Overall it has done well. It has a reasonable PE to growth. Next year he expects 18 times PE. They are in a reasonable kind of sweet spot for the Internet of Things. If there is a pullback then it would be an opportunity, but just buy part of your position if it does.

This has had some great runs in the past as well as some real difficulties. Their products sort of come into and go out of favour. He is not sure this is the one he would pick within the group, but would prefer one of the larger ones.

This company reinvented itself a number of times over the years. They are a technology hardware manufacturer. This is best summed up by calling them an “Internet of things”, for all kinds of devices. From a long-term perspective, it is subject to the vagaries of the product cycle and technological obsolescence. He doesn’t care for the volatility and prefers others.

He likes the space “the Internet of things” that this is in. This has about 38% of the business in Canada and he thinks it is going to keep growing. It is in the right sector, between the pro-growth and the defensive. They just had a fantastic quarter and caught the street off guard. Sees this having a double from here. The next resistance is around $46, and he thinks it is taking out the $58 at some point. (Analysts’ price target is $29.50.)

This is in the “Internet of things” space, and make modules that allow cars, refrigerators, etc. to connect to the Internet. This is in the growth space which is becoming crowded. A well-run business, and has had quite a run. Could be a potential takeover candidate at some point.

Finally had a good quarter, but he thinks it was too much. This has been a very volatile story over the past number of years. Valuation is very rich right now. If you own, he would consider taking some profits.

This is a past high momentum name. It spiked at the beginning of the year. Once you get a spike like that, it takes a long time to repair the damage. If you own, you might want to reduce.

The company is happy with their current results, but the challenge is going to be the upcoming quarter. Some of the sales they were expecting in Q3 have been pulled forward into Q2, which bulks up the near term results, but means that Q3 might be more of a challenge. ROE of 10%. The PE is 22X against earnings growth forecast of 79%, as earnings are expected to go from $.83 to $1.48 in 2016. For 2017, earnings are expected to grow at 39% against a 15 PE. This gives a PE to growth rate of .5, and typically a growth rate of less than 1 is viewed as favourable. Thinks there is still pretty good long-term opportunity for them. It ranks 131, roughly the top 10% of his database. He would look at technical analysis to see when it is time to jump in.

This is back in the decline mode again because the tech stocks associated with it have gone down. In the short term, he wouldn’t expect a whole lot from it. The balance sheet is solid, and in the whole sector of connectivity of things to the Internet they are really riding that wave. One of the only pure plays in the sector. Longer-term the sector outlook will win the day for the stock. Valuation has come down quite attractively. If you can keep this for 2 years and ignore the next 6 months, you will probably do okay.

It is a great company and great technology, but it got crazy expensive and so he would suggest shorting it.