Rating Card

premium

Unlock Expert's Rating and Top Picks Portfolio

Curated by Michael O'Reilly since 2020
1550+ opinions with 4.81 rating (one of the best performing expert)

Latest Top Picks

Stock Opinions by Michael Hakes - CFA, MBA

COMMENT

Given slightly hotter-than-expected Canadian inflation today, he expects a very choppy quarter. See what happened with U.S. CPI came in slightly higher. We won't see a tidy straight line down, as the bulls expect. Also, he expects Washington to continue spending on the military, healthcare, shelter and renewable energy transition--all this will offset deflationary trends. Definitely, the US is the most expensive market at 18.5x PE. Without the Mag 7, then it's 16.1x PE vs. the world's 12x. Ex-"granola stocks" (i.e. LVMH, GSK, Roche, Loreal, Nestle, AMSL, SAP) then it's 11x PE.

Unknown
DON'T BUY
Merck & Company

He owns ELI and AZN instead. MRK's key drug, Keytruda, is an anti-cancer treatment which drove their sales up 21% last year, and amounts to nearly 30% for their sales, but the patent cliff will happen in 2028. So, MRK must replace those sales (drug pipeline or buy a company). Be cautious here.

biotechnology / pharmaceutical
PARTIAL BUY
Nike Inc

Sold it last year, because the company reduced earnings estimates, but their multiple stayed high amid concerns in China and their direct-to-consumer business. The company has probably cleaned the decks since then, and can get their topline going again. Rate cuts will help. Is a decent entry point now around $100. Nike has lost a little buzz, but will regain it.

misc consumer products
BUY

He bought this in mid-2023 on a dip. It's been consolidating the healthcare space for the last 10 years. Are #1 in this space. He expects sales and their PE to improve.

electrical / electronic
BUY
Fortis Inc.
As a 5-year hold

Pays a 4.1% yield. They've increased that dividend the past 50 years, which is key. They recently announced their forecast of rate growth of 5-6% for the next 5 years, and dividend growth of 4-6%. A slow, steady grower. Was hit last year by rising rates, but should benefit from declining rates this year.

electrical utilities
DON'T BUY

It began as the only online payment system, but now there are many. The balance sheet is strong, though. The new CEO needs to increase revenues. Doesn't see a catalyst. He owns Mastercard instead.

0
STRONG BUY
Microsoft Corp

Likes it even it at current levels (all-time high).  Generative AI is a strong catalyst in the coming 1-3 years. They will charge $30 monthly to use their Copilot AI that 60% of companies plan to try or buy. If Copilot proves to be efficient, the revenues and upside are huge.

computer software / processing
DON'T BUY
Pfizer Inc

Bought it last year for the 5.9% yield, but with Covid over (and vaccine sales gone), they have nothing. Shares have fallen in the past year. There was disappointment last year, but their obesity pill trial disappointed. Shares are washed out here. There are no expectations, though their drug pipeline is okay.

biotechnology / pharmaceutical
PAST TOP PICK
(A Top Pick Apr 14/23, Down 29%)

An Asian pure-play in insurance. The overall Asian market was down last year. They achieved all their growth goals in the past year, though. They will benefit from long-term secular trends in Asia. He expects good penetration rates in China where the middle is growing, so PRU is well-positioned. Today, he heard that Sun-Life is taking a trip to China to learn about that market.

insurance
PAST TOP PICK
(A Top Pick Apr 14/23, Up 3%)

The stock has been flat, but at current share prices he's been adding. UNH is the giant of US healthcare. Now is a great entry point. Trades at 18x PE. Can deliver 8-10% topline growth and around 8-9% bottom line. They have a great track record. They participate in Medicare Advantage with a 20% market share.

medical services
PAST TOP PICK
TH International
(A Top Pick Apr 14/23, Down 68%)

This is Tim Horton's China. He has a 5-year time horizon in this, so don't sell it now. There were 600 Timmys in China last year, and 1,000 now. Are spending all their money on store growth so aren't profitable. They've 10 Popeyes in Shanghai, too. The overall China market has been weak. But they will execute in coming years and drive traffic to locations. Pessimism over China has driven down this stock.

Consumer Products
BUY
Home Depot

Was upgraded today. The hope is for normalization this year after the Covid boom and the post-Covid bust for HD. It will start performing again. Likes it. Falling interest rates will certainly help. True, it is a mature company, but new housing development is a long-term trend given the housing shortage.

specialty stores
BUY
SAP AG ADR

They benefit from any technology change as they consult clients. So, gen-AI will be a strong tailwind. Has owned this in the past. Is confident in the CEO. Is definitely on his radar.

computer software / processing
DON'T BUY
Netflix Inc.

They continue to execute by delivering new content. They leverage foreign content with amazing dubbing to present to North American audiences. Their subscription rates continue to go up. It's clearly the #1 streamer. But they spend a lot on content, and the PE of 40x is too high for him. Fears of Disney+ overtaking them never happened.

Technology
DON'T BUY
Tesla Inc

Too expensive. Has never owned it and is very cautious over it. There will be much more EV competition in the coming 5 years. He may buy Tesla is they show consistently higher margins and better growth. He owns LNR and BMW instead.

Consumer Products
Showing 1 to 15 of 181 entries