This week there were 21 Stock Top Picks in a wide range of industries: Consumer, Technology, Healthcare, Financials, Industrials and Basic Materials.
Stockchase Research Editor: Michael O'Reilly CVS, the 2nd largest pharmacy in the US, recently came under pressure with the announcement of Amazon stepping into the pharmacy space. However, now trading at 11x earnings, CVS is good value here -- especially after announcing they are hiring 15,000 staff in Q4 to likely become a mass vaccine…
JD.com Inc (JD-Q)
Chinese online retailer. Like Amazon, because they have their own branded products. Heavily invested in drone delivery. Scale advantage, clear margin expansion profile, growing valuation of subsidiaries. His price target is $101. Suggests buying in stages at $87, $72, and $60. No dividend. (Analysts’ price target is $99.01)
Bayerische Motoren Werke AG (BMW-GR)
It is at its leanest from an operating efficiency point of view. They invested a lot to move to electric vehicles. They have a great Chinese partnership that should grow. It is a great way to play the recovery. (Analysts’ price target is $47.00)
Stockchase Research Editor: Michael O'Reilly The maker of anti-virus software and cybersecurity products has been beaten down this year, but is now at solid values. Their products for small business are ideal as working remotely is trending. Trading at only 13x earnings, it is that one-third of its peers in the sector. It pays a…
Alphabet Inc. / Google (GOOG-Q)
Results are accelerating. Multiples are cheap for a fortress balance sheet, riding digital tailwinds, enormous amount of cash. Yes, risk of antitrust. Business is improving, so much optionality. One of the best businesses in the world at a reasonable valuation. No dividend. (Analysts’ price target is $1917.31)
Constellation Software Inc. (CSU-T)
Has one of Canada's greatest CEOs. Best growth days are probably behind it, but still a great business. It buys companies and uses the free cashflow to keep buying more. He thinks eventually its businesses will spin off. Great balance sheet. Yield is 0.32%. (Analysts’ price target is $1679.38)
Stockchase Research Editor: Michael O'Reilly Fresh buying by a key investment fund and a re-iterated buy with a $60 price target by another is bringing INTC back into favour. With a PE of only 9x, compared to the sector average of 71x, it is good value now. Another catalyst is the announcement that Dish Network…
His price target is $69. Suggests buying here around $56, in low $50s, and again around $45. Cloud, hardware, software, and services doing well. Given blessing to buy NA version of TikTok. Good one to own when markets are elevated. Yield is 1.69%. (Analysts’ price target is $62.81)
Leader in collaboration and work management space. Growth faster than others. Analysts' valuation based on 30% growth, but he sees about 45% growth. Co-founders were also co-founders of Facebook, so follow the smart people. Buy around $22. Price target of $36. No dividend. (Analysts’ price target is $27.00)
They moved past their data privacy issues. It has gotten back on the offensive as an e-commerce power house. It is replacing classified adds. There is a lot of monetization potential across all its platforms. It has great free cash flow. There is lots of value. It will find lots of ways to grow in…
Stockchase Research Editor: Michael O'Reilly BIIB has been on a roller-coaster. When the FDA announced a priority review of a new Alzheimer's drug, it stock soared to $360. When the review failed to approve the drug in the first go-round, the stock plunged to under $250 -- so it goes with drug manufacturers. Its MS…
Regeneron Pharmaceuticals Inc (REGN-Q)
Stockchase Research Editor: Michael O'Reilly REGN’s COV2 antibody treatment used by the US President during his treatment has been granted Emergency Use Authorization by the FDA. Even though vaccine alternatives are coming, this will provide treatment options for those infected and will help reduce hospitalizations. We would buy this with a $425 stop-loss looking to…
Temperature-controlled warehouses are an integral part of the food chain connecting producers and retailers to the consumer. Defensive cashflows, structural tailwinds. High demand sector. E-commerce potential. Seasoned management. Share price attractive, significant discount to peers but with secure growth. Yield is 2.49%. (Analysts’ price target is $41.67)
American Homes 4 Rent (AMH-N)
Second largest single-family rentals in the US. Record high occupancy. Solid collections. Greater than expected development pipeline of homes for 2021. Covid has accelerated demand. Recent value trade has created a buying opportunity. Yield is 0.69%. (Analysts’ price target is $32.50)
Community Healthcare Trust (CHCT-N)
Small cap. Properties associated with delivery of healthcare. Predictable long-term cashflows, stable revenue growth. Consistently generate double-digit growth. Raise dividend every single quarter. Management takes compensation in stock. Yield is 3.80%. (Analysts’ price target is $51.67)
Granite REIT (GRT.UN-T)
Properties in NA and Europe. Trend to e-commerce. Performed very well. Collection is over 99%. Stock's going sideways due to recently raising equity and the value trade. Strong outlook over next 12 months. Great balance sheet. Just increased distribution. Yield is 3.9%.
Stockchase Research Editor: Michael O'Reilly MATW provides end of life and mortuary services. Recent earnings resulted in a record cash generating flow for the company, which allowed a $100 million reduction in debt. It trades at 9x earnings as earnings are expected to grow over 5% next year. It pays a good dividend that has…
🛢 Basic Materals
It has had a great run but he sees more upside. Steel prices this coming winter are in the $800/tonne range which is higher than they have been in years. They are going to be one of the lowest cost steel producers. He sees it doubling from here over the next couple of years. (Analysts’…
Torc Oil & Gas Ltd (TOG-T)
A huge laggard this year. It is trailing other names at 20-30%. They have not yet reinstated dividends. They should reinstate it early next year. At current levels, the stock trades at 14% free cashflow yield. At $50-$60 oil, it trades at 30%-60% free cashflow yield for dividends and buy-backs. (Analysts’ price target is $2.46)
Whitecap Resources (WCP-T)
The mid-cap names are where you really want to focus. They have done a good job of taking advantage of the pandemic and doing MNA. It will be one of the first names to profit from money coming back to the sector. They could gain even bigger scale and be re-rated by multiple. Currently trading…
MEG Energy Corp (MEG-T)
They have paid down debt, but their balance sheet is not yet where investors want. Their assets were in demand from Husky. If oil prices strengthen, he does not expect this to exist for long since it is a big cashflow machine. It is hedge-fund heavy but he would buy a little if you are…
This post summarizes the top picks weekly. The previous week’s stock picks list is available for an additional week using the link below. Refer to Daily Top Picks available in the All Top Picks pages to browse the all-time top picks archive.
Use this list wisely to identify buying opportunities.
Happy trading !!!