David Dietze

Market. He thinks we have a new head wind this year – the threat of inflation and risk of higher interest rates. Consumers’ biggest asset is their home and real estate, so this is causing some concern. The good news is that valuations are nowhere near those of the late 1990s before the tech bubble bust.

It is a great company, but for him it is too expensive at 5.7 times sales. He prefers Chipotle (CHP-N) at 2.5 times sales.

It is one of the US premier banking enterprises and the new leader is doing a great job cutting costs. The financial sector is still not at record high valuations, so there is still room to run. Higher interest rates are good for them. However, if short term rates become inverted then margins could get squeezed, since their funding is short term.

He thinks over the next two years there is likely a major break up coming of the company into separate entities, which should unlock overall value. If there is continuing growth in the global economy this will help as well.

He likes them because the valuation is very reasonable. It has a great global network, giving exposure to global economic growth. They may look to unlock value by slowly selling off assets that do not create shareholder value. He is in it for the long haul.

This drug distributor controls huge volumes of non-proprietary distribution networks. There is uncertainty in health care generally however. It is very inexpensive here. He would consider buying at these levels.

He is positive over the next 18 months, but you have to be confident in the energy sector. After years of disinvestment in the sector and as oil prices creep higher, he thinks this company will benefit.

He is positive on them with the rising interest rate scenario and thinks it is trading below book value. If you think the global economy is going to continue, this is well leveraged to that recovery.

This is one of the “bluest” blue chip with a AAA credit rating. Consumer staples companies have had a tough time this year. It is a fabulous company and has several levers it could pull to unlock value. It is a good defensive investment with a good yield.

He would be a buyer here, although it is not his highest rated pick. There are a lot of growth drivers, but it needs new leadership to consider breaking this into separate entities. It is only 11 times earnings and has a good dividend yield.

He has been cautious on tech generally as there has been so much money going into the sector. The valuation is still cheap, but getting towards higher levels and recent earnings did not prove up these metrics. He would look to add to his position on this pullback.

This financial services firm has billions under management in private funds. It depends on your outlook on interest rates and the economy. If the overall financial sector continues to grow you will do well here.

The success of this will be driven by interest rates remaining reasonable and continued growth in the economy. The MLP format changes will likely favour this one on balance.

The Amazon of China. It is growing in leaps and bounds, controlling internet commerce. You have to be careful on the valuation. He would take a wait and see approach.

A diversified financial services company. Low interest rates in Europe make it even tougher for this sector to be successful. It has never really recovered from the 2008 down turn and it trades below book value, he believes. One of the problems is distinguishing themselves in a competitive market. This is an acceptable investment, but not a stand out.