Pat Naccarato
Member since: Apr '07
Vice President and Portfolio Manager at
AIC Limited
AIC Limited
118 Opinions
Latest Top Picks
(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.
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.
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.
(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.
(A Top Pick Nov 30/07. Up 11%.) Acquired by Macrovision (MVSN-Q).
Signal
Opinion
Expert
Chart
BUY
BUY
November 30, 2007
Stock has come off quite hard and there is value now on a Price/Cash Flow basis. Generates a lot of free cash flow. Growing very rapidly.
Show full opinionHide full opinion
Stock has come off quite hard and there is value now on a Price/Cash Flow basis. Generates a lot of free cash flow. Growing very rapidly.
food services
BUY
BUY
November 30, 2007
A mortgage finance company. This is a very good time to look at this company. Many financial companies are distressed and are looking for capital. This one is very well capitalized with a strong deposit base. They will actually grow through this downturn. Book value is $25 so you are getting it at 40% of book value. There will probably still be write offs and the book value will come down.
Show full opinionHide full opinionA mortgage finance company. This is a very good time to look at this company. Many financial companies are distressed and are looking for capital. This one is very well capitalized with a strong deposit base. They will actually grow through this downturn. Book value is $25 so you are getting it at 40% of book value. There will probably still be write offs and the book value will come down.
trust, savings and loan
COMMENT
COMMENT
November 30, 2007
Has liked the tech sector for a very long time. Have had a very nice run for a period of time and valuations are getting a little bit stretched but are still very attractive.
Show full opinionHide full opinionHas liked the tech sector for a very long time. Have had a very nice run for a period of time and valuations are getting a little bit stretched but are still very attractive.
electrical/electronic
BUY
BUY
November 30, 2007
After it got hit today, this is a very attractive stock. Revenue growth is moving along very nicely but their costs slipped out of control. Got squeezed on profit margins that have hurt them a little. Ultimately they will get it right. Have $15 billion in cash. Thanks they will be buying back stock.
Show full opinionHide full opinionAfter it got hit today, this is a very attractive stock. Revenue growth is moving along very nicely but their costs slipped out of control. Got squeezed on profit margins that have hurt them a little. Ultimately they will get it right. Have $15 billion in cash. Thanks they will be buying back stock.
electrical/electronic
BUY
BUY
November 30, 2007
Basically a grain processor. What has driven them in the last number of years is their processing of corn for ethanol. The largest processor and will benefit from the energy sector.
Show full opinionHide full opinionBasically a grain processor. What has driven them in the last number of years is their processing of corn for ethanol. The largest processor and will benefit from the energy sector.
food processing
BUY
BUY
November 30, 2007
Leading furniture company in the world. Has been caught in the housing down cycle and margins have been squeezed significantly. Believes that when they cycle recovers, this could be a $20-$30 stock. Thinks the 6.2% yield is sustainable.
Show full opinionHide full opinionLeading furniture company in the world. Has been caught in the housing down cycle and margins have been squeezed significantly. Believes that when they cycle recovers, this could be a $20-$30 stock. Thinks the 6.2% yield is sustainable.
household goods
BUY
BUY
November 30, 2007
Both Freddie Mac (FRE-N) and Fannie Mae (FNM-N) are outstanding franchises. Down about 60% and he is attracted to this area. Feels the government would back them if there were problems.
Show full opinionHide full opinionBoth Freddie Mac (FRE-N) and Fannie Mae (FNM-N) are outstanding franchises. Down about 60% and he is attracted to this area. Feels the government would back them if there were problems.
Financial Services
BUY
BUY
November 30, 2007
Both Freddie Mac (FRE-N) and Fannie Mae (FNM-N) are outstanding franchises. Down about 60% and he is attracted to this area. Feels the government would back them if there were problems.
Show full opinionHide full opinionBoth Freddie Mac (FRE-N) and Fannie Mae (FNM-N) are outstanding franchises. Down about 60% and he is attracted to this area. Feels the government would back them if there were problems.
Financial Services
BUY
BUY
November 30, 2007
A great financial at a discounted price. Made some mistakes. Got into the mortgage related businesses to deeply and are now paying the penalty. Cheap at 1.5X Book.
Show full opinionHide full opinionA great financial at a discounted price. Made some mistakes. Got into the mortgage related businesses to deeply and are now paying the penalty. Cheap at 1.5X Book.
investment companies/funds
DON'T BUY
DON'T BUY
November 30, 2007
Positioned in the right place for electronics but have a lot of debt so their real estate position is not as good as Best Buy (BBY-N). Not getting near the sales per square foot as Best Buy and are struggling.
Show full opinionHide full opinionPositioned in the right place for electronics but have a lot of debt so their real estate position is not as good as Best Buy (BBY-N). Not getting near the sales per square foot as Best Buy and are struggling.
specialty stores
BUY
BUY
November 30, 2007
New CEO. Going forward, they will generate a lot more cash than they do today. Lost a lot of market share. Based on the R&D that they spend they will be in the game, but not right now. This gives you stock at a discounted price. Doesn't know if they can execute a turnaround in the next 12 months, but in the next 3 or 4 years it should be at least a double.
Show full opinionHide full opinionNew CEO. Going forward, they will generate a lot more cash than they do today. Lost a lot of market share. Based on the R&D that they spend they will be in the game, but not right now. This gives you stock at a discounted price. Doesn't know if they can execute a turnaround in the next 12 months, but in the next 3 or 4 years it should be at least a double.
communications/media
COMMENT
COMMENT
November 30, 2007
Currently looking at this one. Great company, great business model and is at a sale price. Having executional problems and he is not sure it is attractive enough at these prices.
Show full opinionHide full opinionCurrently looking at this one. Great company, great business model and is at a sale price. Having executional problems and he is not sure it is attractive enough at these prices.
food processing
WAIT
WAIT
November 30, 2007
It has all the value characteristics that he loves. Has a lot of net cash. Very cheap. Concerned about administration changes when the US election occurs and that their biggest selling drug Lipitor is about 30% of their sales.
Show full opinionHide full opinionIt has all the value characteristics that he loves. Has a lot of net cash. Very cheap. Concerned about administration changes when the US election occurs and that their biggest selling drug Lipitor is about 30% of their sales.
biotechnology/pharmaceutical
SELL
SELL
November 30, 2007
(Market Call Minute.) Management is terrible. Margins are under pressure. Would buy Willis Group (WSH-N) instead.
Show full opinionHide full opinion(Market Call Minute.) Management is terrible. Margins are under pressure. Would buy Willis Group (WSH-N) instead.
insurance
BUY
BUY
November 30, 2007
(Market Call Minute.) Will be able to ultimately withstand this pressure. Buy US financials.
Show full opinionHide full opinion(Market Call Minute.) Will be able to ultimately withstand this pressure. Buy US financials.
banks
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