Advertising

Rating Card

Unlock Expert's Rating and Top Picks Portfolio

Become a member Or, Sign In
Latest Top Picks

Stock Opinions by Pat Naccarato

TOP PICK
(A Top Pick Nov 30/07. Down 43%.) Investment management firm. Value style equity managers got hit but should rebound. They are #3 fixed income managers globally and had short-term performance issues. Valuation is so compelling that you will ultimately do well.
investment companies / funds
TOP PICK
3rd largest global advertising agency. New management are in the process of restoring margins and profitability. Stock was impacted by the economic turndown. Fundamentals are turning upward. Good price.
Advertising Agencies
TOP PICK
Gets paid whenever anyone wants to move a phone number from one carrier to another. It is a monopoly and has a contract until 2015. Expanding globally. Has not been affected by the economy. Enormous free cash flow and no debt. Other business is SMS on cell phones. Transitioning into instant messaging, which has been slow to take off.
Telecommunications
PAST TOP PICK
(A Top Pick Nov 30/07. No change.) Hair cutting franchise with 13,500 locations from Wal-Mart to higher salons. Also have Trade Secrets products. Recession resistant. Have never had negative same-store sales in 80 years.
specialty stores
PAST TOP PICK
(A Top Pick Nov 30/07. Up 11%.) Acquired by Macrovision (MVSN-Q).
publishing / printing
COMMENT
Copy protection. Not a bad business, especially if the phenomena of Blu-ray technology starts to gain. Studios are paying for this service.
computer software / processing
BUY
Diversified medical supply and pharmaceutical. Hitting new highs but valuation is still among the cheapest at 15X earnings. Double-digit growth through many years. 2.6% yield. Has a little bit of upside left. Long-term hold.
biotechnology / pharmaceutical
COMMENT
He currently has no energy exposure in his fund, but natural gas is an area he is starting to look into. Breakeven amount for making money in production is over the present price of natural gas. Producers will have to cut supplies, which will ultimately restore the balance. Could take a little while.
E.T.F.'s
DON'T BUY
MasterCard (MA-N) and Visa (V-N) are phenomenal franchises and basically a global duopoly. Not tied to spending but transaction growth. PE multiple for both companies is somewhere in the mid-20s, which is very rich. On a 5-year time horizon, they will grow into that multiple. Would consider buying at a sub-20 PE.
other services
DON'T BUY
MasterCard (MA-N) and Visa (V-N) are phenomenal franchises and basically a global duopoly. Not tied to spending but transaction growth. PE multiple for both companies is somewhere in the mid-20s, which is very rich. On a 5-year time horizon, they will grow into that multiple. Would consider buying at a sub-20 PE.
other services
DON'T BUY
Not a fan of this. A commodity product. Ups and downs are very violent. Too much competition. Would rather own Intel (INTC-Q), which is the dominant franchise.
computer software / processing
DON'T BUY
Not a fan of this. A commodity product. Ups and downs are very violent. Too much competition. Would rather own Intel (INTC-Q), which is the dominant franchise.
Telecommunications
BUY
A dominant franchise with a very reasonable PE. Fantastic entry point.
electrical / electronic
DON'T BUY
We are currently under-building and homebuilders are very attractive. They are now generally trading below book value. This wouldn't be his first choice because of the leverage they have.
contractors
BUY
The dominant high-end builder. Fantastic franchise.
contractors
DON'T BUY
Expensive. Would like to see the price to sales drop from 1.6 to 1. An alternative would be Foot Locker (FL-N). Not an area that he likes and currently he does not have a lot of retail exposure.
misc consumer products
BUY
Good value with a 12X multiple. Phenomenal franchise and global. Being hurt because of their financial services operation. 4.4% yield, which is safe.
electrical / electronic
WATCH
Favourably inclined towards natural gas and is starting to look at this area. This stock is one that fits his initial starting point. They've taken advantage of buying assets from big integrated oil companies and being able to expropriate these fields in a greater way. Wait for natural gas to rebound.
oil / gas
BUY
One of the higher quality franchises in the US. Gaining deposits. A big mistake last year was the Acquisition of Countrywide. This bank will be a survivor. 8% yield may not be sustainable. Valuation on a book value level is at a trough level.
banks
WATCH
One of the companies that he has on his top 3 or 4 that he will start looking at. Growth by acquisition so their growth will have to come down but they do have some very valuable resources. Wait for natural gas to rebound.
oil / gas
COMMENT
This is a stock that has always been too rich for his blood. If you are not a value investor and want to buy good growth, this is obviously the one to be looking at. A powerhouse that is not likely to be overtaken. The slowdown in the economy has affected advertising.
Business Services
DON'T BUY
Has never owned an automaker and doesn't plan to in the future. It is a business model that has everything wrong. This one has been in the wrong vehicles and are now having to cut costs dramatically. Even so, they will still lose money.
Automotive
BUY
One of the largest refiners in the US. Benefiting right now because of falling oil prices. This is a stock that he was looking at but bought Marathon Oil (MRO-N) instead.
integrated oils
BUY
An oil/gas production company as well as one of the largest refining operations. Believes you are getting the refinery operations for free. Once things get back to a more normal situation, profitability should start increasing.
integrated oils
BUY
Does not believe this company will falter. In need of capital and expect they will have to continue to raise more capital in the next quarter. Insurance operations are still rock solid and they are making $4 a share from this.
insurance
DON'T BUY
His best guess is that a year from now it will not be around.
trust, savings and loan
DON'T BUY
(Market Call Minute.) Would stay away from agriculture. Thinks the ethanol subsidy will be taken away.
E.T.F.'s
DON'T BUY
(Market Call Minute.) The most levered of the drugstores. Would go to Walgreen (WAG-N) instead.
specialty stores
DON'T BUY
(Market Call Minute.) Tied to the agricultural sector so he would stay away right now.
machinery
BUY
(Market Call Minute.) Dominant in their field. Valuation is more compelling than Visa (V-N) and MasterCard (MA-N).
investment companies / funds
Showing 1 to 30 of 118 entries