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Stock Opinions by Paul Harris, CFA

COMMENT
Themes from earnings season?

GOOG had some difficult numbers but, generally, the numbers seem to be good. We're waiting for Thursday, when META and a bunch of other names will come out. MSFT's numbers show that they were executing quite well over the quarter. 

The big thing is how do companies show how the talk about AI will drive revenue? That's difficult. It is slowly happening, as can be seen by MSFT's numbers. It will take time to implement AI into products and then benefit from that.

The other issue is that expectations have gotten very high for a lot of companies. Even though they're beating them, stocks are pulling back.

Unknown
COMMENT
A Comment -- General Comments From an Expert
Inflation.

There's a target of 2% that we're supposed to get to. If you drop rates too quickly, you may get stuck in a situation where inflation stays higher and you may have to hike again, and central banks don't want to do that. People criticized them for not jumping to hike rates sooner, but the reason they didn't was they felt that US and Canadian economies were fragile.

Central banks can push down inflation faster later on if they need to, rather than starting to lower rates now. Market's pushing for 6 rates cuts, but waiting is better for the stock and bond markets and for the economy. If central banks around the world wait, we'll have a better economy down the road.

Unknown
HOLD

Became bloated during Covid, now restructuring. A lot more competition now. Growth will be substantially slower. Market's adjusting to its new reality. Caters to small businesses, and there's growth there. Generally, global payment systems will do quite well.

0
BUY

Unique, charming, well-maintained buildings with smaller floor spaces. Well run. Development of "The Well" not smooth. Not expensive, opportunity to buy. Interest rates have hurt, but real estate should do well with lower rates.

investment companies / funds
HOLD
Celestica Inc

Margins and cashflow have improved. Benefits from onshoring. Tough business, stock tends to be volatile because it's at the mercy of orders from big customers. He wouldn't be interested, but if you own it hold on, as it should do well over the next year.

electrical / electronic
BUY ON WEAKNESS
NVIDIA Corporation

In the sweet spots of AI, gaming, and the cloud. Huge advantage over everyone else. Continues to be high growth. Semis have become political, as US and Europe want to protect this technology, and this is helping the sector. Market may have overestimated the stock a bit, so buy on pullback, will continue to do well.

computer software / processing
DON'T BUY
Laurentian Bank

Put itself up to buy, and no one bought. Difficult environment has gotten worse. New management. Banking is a business of scale and technology, and they can't compete. Buy something else.

banks
BUY
Morgan Stanley

Incredible business. Strong retail franchise with the brokerage business, plus very large asset management. Slimmed down risk on trading. Beat expectations. M&A should pick up next year. Multiple's not high, businesses will continue to grow. Has done a way better job than GS.

investment companies / funds
DON'T BUY
Goldman Sachs

With its strong retail franchise with the brokerage business, plus very large asset management, MS has done a way better job than GS.

investment companies / funds
PAST TOP PICK
Apple Inc
(A Top Pick Mar 02/23, Up 27%)

Hasn't grown revenue, a difficult story. Great balance sheet. Incredible installed base. Wearables and services continue to do well. Great business and company. Backorders will get resolved.

electrical / electronic
PAST TOP PICK
Alphabet Inc
(A Top Pick Mar 02/23, Up 54%)

Beat earnings, ad numbers disappointed. One quarter doesn't mean anything in the greater scheme. Buy at these levels. Can't see anyone taking away from Search, of which it has about 1/3 market share if not more. Its work on AI will benefit it. Great gross and operating margins.

Technology
PAST TOP PICK
Visa Inc.
(A Top Pick Mar 02/23, Up 27%)

Great business, a toll booth. See his Top Picks.

other services
BUY
Toronto Dominion

Canadian banks have underperformed for 2 years in a row, which is very strange. Will probably be fined for money laundering issue. Lots of cash on hand. 10x earnings, 4.75% yield, paid to hold the stock. Should be able to beat expectations over the next year.

banks
COMMENT
Canadian banks.

Canadian banks have underperformed for 2 years in a row, which is very strange. Last quarter, all the banks "kitchen sinked" everything, giving expectations that things were not going to be pleasant. But they're actually setting up to beat expectations over the next year.

Cost structure's a bit out of whack, and they all need to cut back. Very hard for a bank in Canada to lay off people, so it takes a long time to take down their labour force.

Unknown
BUY ON WEAKNESS
IBM Common Stock

First on the AI stage with "Watson", but fell short because of so many businesses. Much more a pure company now, that's why it's doing well and will be able to grow over next several years. Will benefit from cloud, but behind the leaders. He likes MSFT better, but IBM is cheaper.

electrical / electronic
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