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Stock Opinions by Gordon Reid

COMMENT
Markets. He's not on the impending crash bandwagon. Current economic backdrop is anything but a crash scenario. Crashes happen rarely and are normally event driven, not part of the economic cycle. Recessions happen for 3 reasons: events (like the pandemic), cyclical, or structural. We're mid-cycle, with economic growth on the horizon, lots of liquidity, savings rates are high, huge fiscal stimulus, we're not over-inventoried. We're in a good position, having come steeply out of the recession. Try to curb emotion and don't listen to the naysayers.
Unknown
COMMENT
If the bubble burst in one asset class, would that spread? Structural recessions are often the result of a bubble being burst. Meme stocks and crypto run the risk of a meltdown, as they aren't fundamentally structured. They don't have a lot of support underneath them. Blockchain will be part of the future, but what precedes that are periods of speculative growth. These sectors aren't big enough to throw the economy off the rails. 2021 will probably end 10% higher for the S&P than 2019. Market still has room to go.
Unknown
WAIT
Good company. Testing and selling equipment for electronics. Growing very well. He'd like to see a cheaper valuation, closer to 22-23x earnings. Came through pandemic well. Strong guidance recently.
0
DON'T BUY
Not interested, based on valuation. Trading at 10-11x revenue. Good news already built in. Good technology, good company, but he'd pass.
Telecommunications
DON'T BUY

Re-rated to too high a multiple. Both it and Visa are currently at north of 40x current earnings, too high for potential growth even if that growth is exciting. He thinks fintech is very highly priced, many at 10-12x revenue. This includes PayPal, Square. Great companies and management. Future of financial industry will be not a competition between banks and fintech, but a partnership.

other services
DON'T BUY
Re-rated to too high a multiple. Both it and Visa are currently at north of 40x current earnings, too high for potential growth even if that growth is exciting.
other services
COMMENT

Banks vs. fintech Fintech is very highly priced, many at 10-12x revenue. This includes PayPal, Square. Great companies and management. Future of financial industry will be not a competition between banks and fintech, but a partnership.

Unknown
BUY
Canadian-listed, international company. One of the leaders in NA and Europe. Lots of opportunity in the US, where the tide is toward full legalization.
0
COMMENT
Marijuana stocks. They own CURA on the TSX. Canadian-listed, international company. One of the leaders in NA and Europe. Lots of opportunity in the US, where the tide is toward full legalization. See his colleague Brian Madden's comments on CURA.
Unknown
WEAK BUY
Lots of promise, but fallen on hard times. Behind in technology. They're spending billions a year on R&D. Mistake to write them off. 12x earnings, so not a bad choice. 75B a year in revenue. Exciting opportunities. Could own as part of a broader portfolio.
electrical / electronic
BUY
BAC reported today and the markets are reacting negatively because loan growth was not as expected. The reason for this is because the economy is starting to do well and there's a ton of liquidity out there. There's not a lot of reason right now to go to banks for loans. Once people spend what they have, they'll have the confidence to go to the bank for a loan. This is a good opportunity to buy with both hands. Leveraged to a steepening yield curve.
banks
COMMENT
US banks. An impending recession would make him move away from the banks. For example, if the economy was long in the tooth, and central bankers were trying to dampen inflationary pressures. Where we are is being misinterpreted by the markets. Everything is working for the banks. The economy is starting to do well and there's a ton of liquidity out there. There's not a lot of reason right now to go to banks for loans. Once people spend what they have, they'll have the confidence to go to the bank for a loan. When the economy does well, it will be able to digest higher interest rates, and the banks will do well. This is a good opportunity to buy banks with both hands. Capital is piling up. Very strong on this sector.
Unknown
BUY

Good time to start a position. More sensitive to investment banking. Not as sensitive to the yield curve as, let's say, a BAC. Reported yesterday, market was disappointed. A lot of the good news was already built in. The banks are nicely priced, good opportunity.

Financial Services
BUY

JNJ vs. PG Valuation of 16-17x earnings is cheaper than PG. A healthcare company: medical devices, healthcare, pharma. PG is just consumer products, trading at 23x earnings. More opportunity in JNJ, with a caveat on the talc lawsuits. Medical device side should do well post-Covid. Dividends similar in the 2.5% range.

biotechnology / pharmaceutical
DON'T BUY

PG vs. JNJ JNJ valuation of 16-17x earnings is cheaper than PG. JNJ has 3 areas: medical devices, healthcare, pharma. PG is just consumer products, trading at 23x earnings. More opportunity in JNJ, with a caveat on the talc lawsuits. JNJ's medical device side should do well post-Covid. Dividends similar in the 2.5% range.

misc consumer products
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