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Stock Opinions by Gordon Reid

COMMENT
What's attracting your attention? Inflation and what the Fed is doing and saying. We're in a US mid-term election year. His research going back to the 1950s shows that markets tend to trade off badly early in the year, but every time they rally sharply off those lows a year later. See the "Goodreid Guage" under "Insights" on his website, goodreid.com. During times of Fed rate hikes, markets actually go up. Sentiment is so overwhelmingly negative right now. You need to step back and clear your mind. Not a Pollyanna approach, but know that there are many possible outcomes from the current environment, and the mainstream ones are not always the ones that come to pass.
Unknown
COMMENT
Recession? Recessions happen. They come in different shapes and sizes. There have been about a dozen since the end of WW2. They're not terminal. They're actually the beginning of something. TGT and WMT clearing inventory is deflationary, not inflationary. A recession creates many great opportunities, and he's seeing these.
Unknown
DON'T BUY
Does a lot of financing for tech enterprises. Volatile. Well capitalized and well run. Capital markets are boom and bust, and they've ground to a halt in 2022. Private equity repricing is putting a damper on risk assets. Higher beta. He'd rather go with JPM or BAC.
0
WAIT
Not the old Dow. Specialty chemicals. Well capitalized, nice dividend, good free cashflow. Cyclical. Risk-on right now. Nothing against the company itself.
chemicals
COMMENT
Investing when stocks are falling. There's no doubt we're in a downturn. Question is how deep does it go? Investors have to be careful about valuations. A low PE might have the E at risk. Do I have a quality company that can sustain itself through an attack on revenues and earnings? How does it come out on the other end? Are there secular forces that will allow it to do much better? This homework will tell you whether a stock is yea or nay for your portfolio. Investing is done in years and cycles, not days/weeks/months.
Unknown
STRONG BUY
Highly bullish on it. Strong long-term, secular demand for copper for electrification. Doing well cyclically, healthy price of copper. A money machine with current price of copper. Impeccable balance sheet. Should see it increase dividend and buy back shares.
non-base metal mining
BUY on WEAKNESS
Valuation in mid-30s has always been outside his comfort zone. One misstep creates a lot of air beneath it. Great model, as 90% of earnings come from membership fees. He'd buy on a lower multiple. Confidence in long-term leadership.
department stores
HOLD
Lost some gleam. Related to healthcare sector as a whole. Still confident in it. This is why you have a portfolio -- when some stocks fall, you have others to do the heavy lifting.
0
PAST TOP PICK
(A Top Pick Jun 15/21, Down 11%) Market sentiment has built-in a fairly deep recession. As research comes in, the market will rethink this and banks will continue upward. Very sensitive to interest rates, so does very well with steeper yield curve. Loan growth good, consumer is healthy.
banks
PAST TOP PICK
(A Top Pick Jun 15/21, Down 20%) Inexpensive multiple. Strong need for new housing, replacement cycle is strong. US housing is underbuilt. Still believes in the company. Good, long-term future for anyone involved in construction.
0
PAST TOP PICK
(A Top Pick Jun 15/21, Down 13%) Luxury homebuilder, so not as sensitive to the mortgage market. Still positive on the homebuilders, a lot of the damage from negative economic forecasting is already built in.
contractors
DON'T BUY
Results highly influenced by Covid vaccine. Earnings might be stagnant going forward. His choice is MRK, reasonable and sustainable multiple of 12x and very good dividend. MRK's major drug is patent-protected until at least 2026, plus great drugs in pipeline.
biotechnology / pharmaceutical
BUY
Reasonable and sustainable multiple of 12x and very good dividend. Major drug is patent-protected until at least 2026, plus great drugs in pipeline.
biotechnology / pharmaceutical
HOLD
Acquired company that gives them technology and motion systems. Pause in share price is due to market, not company. Still likes. Post-turbulence in the economy, a solid hold.
0
SELL
Largest drug going off patent, already seeing bio-similars. Earnings will go dormant.
0
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