Gordon Reid

As prices rise, value drops. Earning must keep up. Valuations are getting stretch, around the low-20s. Reasons are that the Fed is cutting interest rates while corporate profits have been buoyant. Early earnings this quarter are promising. But we must keep our feet on the ground. Multiples no longer are expanding, so earnings must support strong stock prices. The double-digit returns of recent years were unusual. Now, he is overweight financials--there will be loan and therefore economic growth, and the banks are cheap, trading around 12-14x PE.

It's too early to enter HD or Lowes, whose earnings will be lower this quarter than the last as their multiple hovers near historic highs. He needs to see more consumer activity here. He's on the sidelines.

Their report last week disappointed--their big problem involves Medicaid with their medical cost ratios were much higher. The street saw it as a misstep due to mis-timing.

GE Aerospace is priced for perfection. The valuation has run up to the 40s PE. To justify this high PE, earnings growth must be in 20-25%. The market has gotten too exuberant with GE. Margins are up and they beat, and yet shares are down.

It was getting pricey, so he took profits around $616. He's holding, because of a strong long-term outlook. Are fueled by the weight-loss drugs and other pharmaceuticals, of which they are the largest U.S. distributors.

It's now profitable. He bought it before this and before they entered the S&P 500. It has more room to run with many untapped opportunities, given that 100 million people use their app; is a massive opportunity in advertising. Uber Eats is gaining traction, and the Robotaxi by Tesla is promising. With driverless cars, Uber's market could explode.

Still likes it. Are growing faster and trades less expensively than main peer, the larger Cisco.

Their success during Covid, with a big sales spike, hurt them after the pandemic. They should be more efficient, namely their return on invested capital. He prefers Merck for its better performance.

Has a low PE compared to fellow chipmakers. They recently suffered from over-inventory, but have mostly worked through this. What's interesting in QCOM is their chips used in cars and the internet of things, so they have good growth potential.

Has owned this for nearly 25 years when it was Priceline.com. An asset-lite company, so few capital investments. Their success comes from relationships with European hotels, which are small and not big chains (as in the U.S.). BKNG now owns Kayak, Open Table among many.  Connected Trips is their latest success. Trades below the market PE. He predicts $200 EPS in the next report, so growing rapidly. People continue to travel.

Trades at 14x PE. Is the biggest P&C insurer in the world and 4th insurer overall. Their combined ratio is around 80, so they have a high margin in their underwriting business. Investments are excellent, with 80% in  bonds enjoying strong returns. A predictable, safe business. They have pricing power. Catastrophes like hurricanes in the long run give insurers a chance to enhance revenues.

They're in a tough space. Still holds it. It's a timing issue. The end market has been weak given the EV buzz. There's talk of them being bought out. They may sell their highway division. 

Consider tax implications for owning this, for Canadians owning a limited partnership. Pays a nice dividend, but you will be taxed on this. Look at Canadian dividend payers in natural gas, instead, like Tourmaline.

The chart has been a home run, but he hesitates now, because 55% of their revenues are in groceries which suffer tight margins and are vulnerable to accusations of shrinkflation and price gouging.

Avoid, because of poor execution and being in a poor sector. There will be a tax on online delivery services. Too many problems.