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Stock Opinions by Ashley Misquitta, CFA

COMMENT
He's cautious about markets. Re: US-China trade war: at least we know new tariffs weren't applied, but there remains uncertainty for manufacturers. Also, global macro data indicates sluggishness. So, be cautious. He's a long-term investor, and positive about America. One reason are young demographics there, but also the shale revolution in the oil space. U.S. shale production is far more sensitive to market price to stop and start production....US consumer data today slipped, and US consumers are carrying global health. Watch this data as well US employment numbers.
Unknown
BUY

GD vs. Raytheon Both are fine businesses. He owns both. GD has the business jet as well as their marine business (submarines for the US Navy); barrier to entry is strong. GD also has an IT division, a decent business. Raytheon makes missiles and well-positioned to sell to US allies; they also do electronic warfare.

transportation equip & components
COMMENT
They were hit hard at end-2018 when markets were worried over debt. A good company, but not its valuation--he'd be cautious over this.
Financial Services
BUY
Impressive that they build an e-retailer then AWS--both are growing rapidly. If Washington orders them to break up those divisions, then AWS is a strong enough standalone business.
specialty stores
BUY
A terrific business. US banks are well-capitalized. BAC is doing well introducing their business into new markets, though don't expect them to do big acquisitions. BAC is using tech aggressively to cut costs and in turn reinvest those savings. Low and declining interest rates are a neutral to modest negative factor.
banks
COMMENT
Portfolio diversification: Why can't I follow the Buffet model and hold 10 names to make up 80% of a portfolio? Why should I hold 15-30 stocks? It depends on the person. Buffet can endure long drawdowns without taking out capital, but most investors can't afford to do that. Also, it depends on what's happening in the markets in the past year or so. We're transitioning from growth/defensive to heavy defensive in the past 6-12 months. Don't make accidental bets--make bets you only want to make, as simple as that sounds.
Unknown
DON'T BUY

IBM should be killing it now--huge--considering macro tech trends like machine-learning, but IBM doesn't, can't, make it happen. They were a hardware business then acquired software businesses which increased their profits. After that, they bought back shares, which is a good idea in general, but IBM should not have. Rather, they should have reinvested to innovate. He doesn't know if their Red Hat deal will work out.

electrical / electronic
BUY

GD vs. Raytheon Both are fine businesses. He owns both. GD has the business jet as well as their marine business (submarines for the US Navy); barrier to entry is strong. GD also has an IT division, a decent business. Raytheon makes missiles and well-positioned to sell to US allies; they also do electronic warfare.

Defense
PAST TOP PICK

(A Top Pick Oct 22/18, Up 21%) Well-positioned as a leader in self-driving cars. They have a deal with Lyft to provide such rides. Generate a lot of cash which they return to shareholders. Well-managed.

Automotive
PAST TOP PICK
(A Top Pick Oct 22/18, Up 8%) Consumers re-purchase their products and their service division is strong. However, the China trade tension gives him pause; so, he's watching the trade talks. He's also worried about the NBA controversy in China. Cautious.
electrical / electronic
PAST TOP PICK

(A Top Pick Oct 22/18, Up 25%) The Bristol acquisition was perfect. CELG boasts strong competitive barriers to their products and their product pipeline will pleasantly surprise the market. He's not worried about the US election and the negative effect on US healthcare; in fact, he loves buying stocks when others fear or hate them.

Consumer Products
COMMENT
A big holding of his. Stable business with wireless, though Time-Warner business could be hit by cyclicality (ad revenues would take a hit). There are concerns over their debt. They have a plan to aggressively pay it down; they refinanced debt into the future. Not so excited buying ATT now; an activist is now involved.
Telecommunications
DON'T BUY

Buy during negative sentiment? Moodys just upgraded FedEx. Global trade is under pressure, so that's a headwind. Also, Amazon could very well build their own delivery network for certain parts of their operation. They manage to build AWS, in comparison. So, Amazon is a greater worry to FedEx. So, he's cautious about FedEx.

Transportation
COMMENT
Well-run. Disciplined in capital allocation, like stepping out of the bidding for a company when a certain price was reached. They had the discipline to pull out. But the energy space is challenged.
integrated oils
COMMENT
He likes the semis space in general, but not currently. AVGO has a done a great job over the years in absorbing companies, but they've run out of semi companies to buy and it makes less sense for them to pick up software companies now. Mixed feelings.
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