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Stock Opinions by Shane Obata

N/A
Market. Earnings is the biggest driver. COVID is still a driver, but it feels like investors are looking to the eventual end to COVID. The rates market has been pretty interesting, based on the level being so low and the volatility seems a little high. There are structural reasons that rates can stay low. His view is that with demographics and labour markets, as people retire and there are fewer people in the workforce, and considering the demographic curve in China, it could weight on rates. Debt is in a weird way deflationary as in when you are tapped out how much more can you borrow. His company is taking a diversified view to the markets. He has holdings that will do well if interest rates remain low – renewable energy (European), which did not do well this year, and clean technology names in solar, hydrogen and electric vehicles, are starting to recover. For real estate he is positioned for a continued growth in E-commerce.
Unknown
DON'T BUY
You need to ask your financial institution as to what you can do with your ADR holdings, now that Trump black listed some Chinese stocks. It is not a great thing that happened here. This stock still trades in Hong Kong. It's been a giant disappointment. It would make sense for it to do well but the story has not yet paid out. He would stay away from this and look at higher caps, which don’t have so much risk to be de-listed.
Telecommunications
BUY

What does he think over the next 5 to 10 years. It is a great company and you could comfortably hold it for probably a decade. We are not in the early innings in the transition away from cash. As the global economy grows, Visa and MasterCard are too big to fail. As a merchant you have to have a value if you don't want to lose out. A lot of the smaller competitors are using the network of these two guys.

other services
BUY
People learn new behaviours and they like them and stick with them. ABNB has come through COVID and people will continue to use them. He thinks this is an attractive name and this is the leader of the alternative accommodations. (Analysts’ price target is $170.00)
Technology
BUY on WEAKNESS

You could continue to add to this on weakness. You rarely get opportunities like we got back with COVID. It was getting thrown out despite the fundamentals. They have largely sidestepped the regulatory overhang that affected Google and Facebook. MSFT can still go out and make big deals while the others cannot. (Analysts’ price target is $326.00)

computer software / processing
DON'T BUY

It is starting to perk up a little. The Redhat acquisition is starting to flow through and show some growth. He still does not love IBM. It will fall into the bucket of 'Old Tech'. Continued share purchases will help with EPS, but revenue growth will continue to be difficult. He would look at other names like the FANG stocks. (Analysts’ price target is $148.00)

electrical / electronic
HOLD
Warrant Buffet is irreplaceable. It is weird to think about the end of his tenure. There is a high probability that what he has done will never be replicated. But what if the reins get handed to those who are more attuned to technology and the new world. They could become more growth oriented. You can't really go wrong with this company.
insurance
PAST TOP PICK

(A Top Pick Aug 07/20, Up 81%) He still loves the company, even after the run. It is firing on all cylinders. The pandemic accelerated the shift to on-line advertising. YouTube is very well positioned to take more and more advertising share away from TV. Over two billion active users. They are the top competitor to Netflix.

Business Services
PAST TOP PICK
(A Top Pick Aug 07/20, Up 33%) Every time he sees a press release, they are beating numbers. They are just getting started in China. They take extremely low margins in order to offer customer extremely good value and that is why retention is so high. They also give an element of reopening since they also have gas, food courts and travel. It is a company that has done well no matter what is the macro.
department stores
PAST TOP PICK
(A Top Pick Aug 07/20, Up 116%) He recommends holding it. It is expensive but is perpetually expensive because it is in a monopoly position. No one makes these machines. As foundry wars are heating up, all this adds up to more spending and more purchasing of their machines.
electrical / electronic
BUY
Renewable Energy: He likes this space. His value proposition in the renewable space is that he is giving access to global leaders, even if they trade in Europe. It is safer to play bigger companies.
Unknown
HOLD
He has never made it a Top Pick because it never stops going up and he is scared. He continues to like it. It is tougher for him to make a new buy than to hold. They are dominant in GPUs. The build-out of high performance computers is only going to continue. (Analysts’ price target is $203.25)
computer software / processing
DON'T BUY

It is an example of better opportunities elsewhere. There was some shady business going on and they are still a long way from profitability. He would prefer Tesla or other automakers.

Automotive
TOP PICK

He is hoping it will play out just as GOOG-Q did. It will trade within a range for a while and then brake out. Every day that it does not go up is more value embedded into the share price. The retail business is fully dominant. By 2025 they will be the biggest retailer in the US. They are so reliable and were even through the pandemic. (Analysts’ price target is $4153.29)

specialty stores
TOP PICK

It is the leading foundry in the world. He would rather buy this and sell INTL-Q. They are spending a lot in CAP-X over the next little while. They have technological leadership. They provide good exposure to automotive semiconductors. (Analysts’ price target is $144.82)

electrical / electronic
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