Companies are all around us, facilitating the way we live and producing products that we want. These top companies have such a huge reach that we have all at least interacted or used their services at one point or another in our lives. If not, then you surely know that someone that has!
Shopify Inc. (SHOP-T)
The e-commerce giant that offers a platform for webstores. They are one of the most popular platform and facilitates the interaction between shoppers and sellers. As e-commerce becomes more and more ubiquitous, you will be using Shopify without even knowing it.
Initiate a call option for a strike date of April 2020 at a strike price around $340? Likes Shopify. You will pay a lot for the option because the premiums are high, in the top 25%. Shopify has had a good run, though come off recently. Go ahead and do it. It's a speculative move.
Mastercard Inc. (MA-N)
The move away from cash and into digital currency has been a boom for Mastercard. We all have at least one person, if not many, who have a Mastercard credit card.
Payment processors are a long-term hold. Have become the market darlings. Rolled over in September with the rest. Tremendously overbought. A mean reversion to the 200-day moving average would be a better time to pick it up, probably over the next few weeks. September to February is the optimal time to hold.
Netflix Inc. (NFLX-Q)
Netflix is the online streaming service that most people know and use. They are starting to focus more on their in-house content which has won awards and keeps subscribers.
An amazing company and who is cutting their subscriptions? No one he knews. If you buy this, then you assume they will continue to raise rates and slow spending. He doesn't know that for sure and so he owns Disney instead.
Visa Inc. (V-N)
If you have a credit card, chances are you have at least a Visa. Along with Mastercard, Visa is the most recognized name in the credit industry.
The stock is trading at 33 times earnings with a 0.6% dividend yield. It's tripled over the last 5 years. Blockchain technology might be more interesting. He wouldn't buy now and would take some profits or hold.
Everyone has a Facebook account know and the numbers are still growing, counting 2.4 Billion users. The company has faced some data security concerns and other scandals but this social network is not about to go away anytime soon.
He would avoid FB, selling out a year ago. Just too many accusations about management integrity. Multiples have come down, but he would still avoid it. Elizabeth Warren is gunning against Zuckerberg -- not good.
Alphabet Inc. / Google (GOOG-Q)
For a lot of people, Google is the door to the internet. It has become so well-used and well-loved that it’s not uncommon to hear people say “Let me google that”.
Sell Google, and buy IBM? Yes, Google has been languishing, but IBM has languished more. Also, Google has a better moat than IBM. Google is well-entrenched in the internet more than IBM. Instead, consider Amazon or especially Microsoft, or just hold onto Google.
The iPhone has been a staple in Apple’s line and has been their key product for some years. If not an iPhone, then you might have a Macbook, or you’ll know someone who has both. Apple products are everywhere and they have a loyal following.
He sold because much of revenue comes from iPhone. Risk management concern. Issues in China. Smartphone growth slowing. Not the Apple of 5 years ago. Has done well, pulled away from the rest of the FANGs.
A majority of people learnt to use the internet on a Windows machine and they continue to be a part of our everyday life. Their office suite is standard in the workplace and most people will be familiar with Microsoft.
(A Top Pick Feb 13/19, Up 37%) He still likes it. Businesses will continue to move to the cloud which adds a lot of value to those companies.
Activision Blizzard (ATVI-Q)
An American video game production house. If you’ve ever played World of Warcraft, Call of Duty or Candy Crush then you’ve come into contact with Activision. They are one of the largest gaming companies.
In the gaming space, there are 3 players including this one. Lots of trend hype going into last fall, got caught in the market swoon, and it traded down and hasn't recovered. He'd hold, not sell, but he wouldn't add to it. Let markets digest the hype from last fall.
It’s become more and more standard for people to call an Uber than a taxi. This revolution of ride-sharing was pioneered by Uber. They have become one of the most well-known ride-hailing platform in the world.
Uber is the well-known transportation company. It has been beaten by Lyft in the race to go public. After IPO, the company could be valued at up to $83.85 billion.
Uber’s competitor that offers ride-hailing services. If you’re Canadian, you could soon be using Lyft too as they have announced plans to explore the possibility of expanding here.
Came out at $72 and shot up to low 80s, and now at 69. Valuation looks reasonable based on sales multiples. Biggest problem for these "unicorns" is they also have losses of billions of dollars. He's skeptical, though not skeptical enough to short it. Worth watching to see how the whole story unfolds.
Square Inc (SQ-N)
The payment system is known for their ease of use and connectivity. For those who love food trucks, their credit card terminal is usually powered by Square.
One of the major producers of chips that power our computers, phones and many other technological devices.
(A Top Pick Jun 26/18, Down 5%) Still loves this despite pressure on chips due to the China-US trade war. $83.07 is his model price, 77% higher than current prices. Intel isn't as cyclical as its peers. You may need to wait for the next cycle in semis though.
Advanced Micro Devices (AMD-Q)
They produce chips and processors that are used in a variety of tech that we use everyday.
They were just punished following a lowering of guidance. He sees other competitors being better positioned right now and are cheaper on a price-earnings basis.
Hong Kong Stocks
Tencent Holdings Ltd (0700-HK)
The makers of Fortnite and many other games. Riot Games is one of their subsidiaries and is known for the League of Legends game.
When the Chinese market got cracked when all the Asian markets got cracked, he thought they put these on fire sale. As a parallel, it is an FB-Q type of situation. They sell apps, music and a pay-app. They have games. It went from the 50s to the 30. It is a unique situation. They…
Dollarama Inc. (DOL-T)
Consumers love affordable goods and Dollarama is the hallmark dollar store that comes to mind for many people. They have been very efficient at providing goods for cheap and the customers love it.
(A Top Pick May 29/19, Up 15%) He still likes it, but it's getting pricey so he may lighten up on it. Definitely want to own this going into a recession, more so than say Canadian Tire.
Spin Master Corp (TOY-T)
If you have any kids, they must have some toys made by Spin Master. Etch A Sketch and Hatchimals are some of their most well known brands that have won awards.
The shut down of Toys-R-Us created some disruption in this business. Paw Patrol still seems to be the big toy. This is a solid name and very well run. They have diversified their offering. Patience will be required in the short term.
Restaurant Brands International (QSR-T)
Canadians love Tim Hortons and their roll up the rim has become somewhat of a tradition for many. Restaurant Brands also counts Burger King and Popeyes among their brands.
Under Armour (UA-N)
The sportswear company has capitalized on the athleisure trend and you can’t leave your house without seeing someone wearing their clothing. The company is going through a multi-stage change and are turning around the business.
A higher growth story, but the whole group is at a valuation premium. Although the company is doing well today, if the growth model and valuations don’t come through, you are paying a lot today for what the company looks like a few years from now. That always makes her nervous in protecting capital.
The go to e-commerce site that dominates online shopping. They also offer AWS which is used by many websites and internet companies. Amazon continues to diversify and grow, and their fundamentals are strong.
(A Top Pick Nov 02/18, Up 5%) He still likes it and would buy it. It's THE growth company. A must-own. They continue to dominate the cloud business.
Starbucks shaped coffee culture around the world and is one of the most recognized coffee shops. They have been loved for their personalizable coffee and grab and go meals.
It's innovative and has built a coffee culture in places around the world. Wait for a pullback and hold it long-term.
Walt Disney (DIS-N)
Children love the characters and worlds that Disney has created. With the purchase of Marvel, Disney is well-positioned for their upcoming streaming service. They also own and operate the ABC broadcast network, and various theme parks around the world.
They have great content and will be streaming in November at an attractive $6.99/monthly. Their movies and parks still do well. Streaming offers a new growth platform. Trades at a good multiple. (Analysts’ price target is $154.96)
Nike Inc (NKE-N)
The company has become a symbol of athleticism and sports. They’ve also broken out into the fashion movement, with many models and collectors snapping up their new collections.
(A Top Pick Nov 29/16. Up 10%.) Sold this a while ago. He was starting to get very uncomfortable with the retail environment. Their shoes continue to do very, very well.
Walmart Inc (WMT-N)
Walmart has been doing well and is keeping up with Amazon in the battle for retail shoppers. The big box store is continuing to bring in strong revenues and is investing in their e-commerce platform.
He shifted from cyclicals to defensives in Q4 2018 and he bought Walmart, which has done very well for him. They have pricing power and strong earnings. They have a phenomenal online platform that competes with Amazon--easy and seamless. They will be stable in volatile markets.
Dollar General Corp. (DG-N)
A well-known dollar store that gives customers a wide variety of choice without breaking the bank. Even in times of recession, these types of stores tend to do relatively well.
10.625% Bonds due July 15/15. One of the largest heavy discount US retailers. No sales over $10. Because of the recession, same-store sales have been fantastic and growing about 8%-10%.
Dunkin’ Brands Group (DNKN-Q)
America’s coffee and donut house. They are part of millions of people’s days, serving up coffee and snacks.
Nintendo Company Ltd. (7974-TYO)
Nintendo has become an integral part of childhood for many with the Wii and the Switch consoles enjoying widespread popularity. The company has strong franchises and characters that everyone would recognize and love.
(Not listed on exchanges.) Nintendo. Very interested in this name. The comeback story of the year. People thought it would be driven out of the gaming business but the Wii has been a tremendous successful platform. Hasn't done an evaluation of it but will be looking at it.
Johnson & Johnson (JNJ-N)
A giant in the healthcare and health tech space. If you’ve ever used a band-aid or other home treatments, chances are it was made by Johnson & Johnson.
The PFE-N non-patent drugs will be dilutive for earnings in the short term. She prefers either JNJ-N or ABT-N
Pfizer Inc (PFE-N)
One of the world’s largest pharmaceutical companies. They produce vaccines, medicine, and other healthcare products. Just how present is Pfizer in our everyday life? If you’ve used a chapstick, then you have used a product by Pfizer.
It's a machine that makes acquisitions which generate revenues worldwide. However, they lack growth and a presence in oncology though they recenly made an aquisition that can help growth. Expect modest growth, but limited downside too if a clinical trial fails. Good dividend and balance sheet. Good to hol.
Merck & Company (MRK-N)
Another of the largest pharmaceutical companies in the world. They research and market a variety of medicine, vaccines, such as Gardasil, and other over the counter medication.
He started buying in December and thinks the market has beaten the stock up over the Trump Administration move to curb pharmaceutical pricing. He thinks the market is underestimating sales growth. The sector is in a secular bull market. Yield 3.1%. (Analysts’ price target is $69.16)
An aircraft maker that we recently featured on our list of Airline Stocks List. They bought the CSeries program from Bombardier last year that should create more lightweight planes.
This is a recent acquisition. The backlog of orders for Boeing and Airbus is tremendous. He thinks China will favor Airbus over Boeing in future orders. He thinks the Bombardier acquisition gives them an advantage over Boeing across the fleet. They are also setting up a new maintenance service, which might take over work currently…
The aerospace company has been down since the 737 Max crash but they are in a duopoly and demand for transport is strong. It will not go up in the short-term but worth holding.
Jet liner companies are down on the two jetliners crashing. BA-N is admitting their software was malfunctioning. The stock was charging ahead on big backlog and demand. He has Airbus and it has done fine. There will be some switching. He prefers Airbus.
One of the best positioned to take advantage of the e-commerce business and ship products to customers. It tends to go the way the economy goes. We featured FedEx on the Top Shipping Stocks to Buy in 2019
(A Top Pick Aug 09/19, Down 10%) They had an earnings call where they missed guidance and dropped their expectations. Asia-Pac economic slowing was to blame. However, there is only a handful of global shipping companies and this is on sale right now -- a rare opportunity.
United Parcel Services (UPS-N)
If you’ve ever received a package from an online retailers, chances are you had some interactions with UPS. They are also a leader in supply chain management solutions.
He has viewed this a good indicator of the economy – especially consumer goods. Amazon has decided UPS could not meet peak delivery demand and has decided to invest in their own distribution network. They will still survive.