Alimentation Couche-Tard, Tetra Tech Inc. and 20 Stock Top Picks (Archive From Oct 02-08)
This week there were 20 Stock Top Picks in a wide range of industries: Utilities, Consumer, Healthcare, Financials, Industrials and Technology.
Stockchase Research Editor: Michael O'Reilly Our Top Pick of SR is as much a seasonal play as it is about fundamental recovery. This natural gas company provides service to 1.8 million homes in Alabama, Missouri and Mississippi, is the 5th largest publicly traded natural gas company, and is viewed as providing essential services heading into…
Stockchase Research Editor: Michael O'Reilly One of the sectors that has benefitted from the pandemic is that of grocers. VLGEA is a under-the-radar grocer that provides a solid divided, backed up by a safe payout ratio. The company just reported a 20% increase in revenues over the year and EPS was up 34%. Its 15.8…
Stockchase Research Editor: Michael O'Reilly This fast food king has definitely benefited from the trend away from expensive restaurants. As we head into wave two of the pandemic potentially, this will continue to be on people's radar as an affordable break from cooking at home. Analysts at Bank of America just upgraded this to a…
Dollar Tree (DLTR-Q)
Plays well into what's happening with the pandemic and changes in consumer behaviour. Prefers Dollar General, as it's in rural areas, with no Walmarts or Costcos. DLTR has lots of competition in the city and its latest acquisition hasn't worked out well. 9% earnings growth rate, while Dollar General has 13-14% earnings growth rate.
Alimentation Couche-Tard (B) (ATD.B-T)
Has a 7% free cash flow yield. The market is annoyed they haven't made an acquisition recently, but he's fine with that. They've produced a ROE of 20% for decades, and are undervalued now. He doubled his position in the low-$40s. There is some concern over e-cars, but ATD has been testing EV stations in…
The a2 Milk Company (A2M-ASX)
They have a 11% market share in milk in New Zealand. Their milk is unique, containing the a2 protein (which may offer health benefits). Also are very successful selling baby infant formula in China. They had an ADR on the US exchange (ACOPF). He bought this on the Australian exchange, because it's more liquid than…
ABT vs. JNJ Similar businesses. You absolutely need exposure to healthcare. He holds JNJ for the dividend aristocrat qualities. ABT has been impressive. Testing platform has been phenomenal and will continue to ramp up. It's a great addition to portfolios at these levels. Tough choice between the two, but ABT probably has more immediate upside.
Bristol Myers Squibb (BMY-N)
He liked their Celgene acquisition last year (though the market didn't), because it diversified their exposure to other drugs which have exectued well. Their R&D and core business are doing well. The stock trades at only 8x earnings. There is a disconnect between company performance and the market. It's very cheap and they execute well.…
Stryker Corp. (SYK-N)
The gold standard in the industry. They have the best products, sales force and are quick to adapt. They are very innovative. As surgeries start to pick up, their products will see more demand. They are expected to earn $10/share. They are trading at a cheap multiple to normalized earnings. (Analysts’ price target is $214.35)
He owns Sun Life and Great West Life instead. Insurers have suffered. Growthier companies are getting the attention, especially in a low interest rate environment. Good value over time, but that's not in favour right now. Has recovered from the March lows. Nothing against it.
Citigroup Inc. (C-N)
Just because interest rates are low, it does not necessarily mean that it is all bad for financial institutions. The rate curves have been steepening which bodes well for banks in net interest rate margins. We will see a return of financials with a gradual return. There has also been good off-set from the sales…
Had a very good run. Positive surprises globally on cars sold. Good international exposure. Valuation makes it hard to get excited about buying today. Future headwinds from electrification, so the multiple will be capped. Should produce a decent quarter, so hold it if you have it.
Richelieu Hardware (RCH-T)
Benefiting from shift in consumer spending to the home. Doorknobs, cabinet hardware. Undergoing a positive rerating by the market. Strong consumer tailwinds as people forced to stay home. Good business model. Lots of growth runway. Half of revenue growth comes from accretive acquisitions. Margins have upside. Yield is 0.73%. (Analysts’ price target is $35.00)
Tetra Tech Inc. (TTEK-Q)
Consulting and engineering specifically on the environment and water. Higher margin work and less cyclical. Favourable dividend policy, grown over 20% in last year with payout ratio below 25%. Good tailwinds. Yield is 0.67%. (Analysts’ price target is $104.50)
TFI International Inc (TFII-T)
Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. The stock currently trades at a 18x earnings, which is not too cheap. However, the growth rate is improving and logistics is becoming less cyclical. Earnings also beat expectations by 32% with a recent dividend boost. Unlock Premium - Try 5i Free
(A Top Pick Oct 18/19, Up 275%) He kept picking away it and still owns it. A few years ago, this stood at $80, but fell to $10 when they a great deal to buy DigitalGlobe which increased the company's value though levered the balance sheet. MAXR does satellite imaging and analytics for defence and…
Constellation Software Inc. (CSU-T)
For once, he's saying that they are undervalued. Free cash flow yield is over 4% after growing it at 30% annually for 10 years. It's cheap at these levels. Loves the managers. (Analysts’ price target is $1670.00)
It is a value trap and Intel has been a serial disappointer. The report from last night stated their data centre business continues to deteriorate. They are getting beaten by their competitor, notably AMD. Stay clear of Intel.
His model price is $86 or a 46% upside. They are now involved with Tiktok. We have to wait to hear from ORCL-N on how this is going to work. (Analysts’ price target is $62.31)
He has owned this for his clients for 15 years. It has done extremely well. They have trimmed it a number of times. You do not want one company to dominate a portfolio. A few weeks ago, it popped higher than their limitation band so he trimmed it. However, he still very much likes it.…
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 !!!