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)


Stock Opinions by Rob Sechan, Managing Partner, New Edge Capital

COMMENT
Big tech is outperforming this week as banks fail

Yes, valuations are high, but he owns Apple, MSFT, Google and Meta because they have catalysts to grow, high cash flows and moats. That's why investors are chasing them in this low-growth, unstable market. You must be there, but watch valuations too.

Unknown
DON'T BUY
NVIDIA Corporation
Upgraded today

Won't buy it, because it's capital intensive. In semis, own the equipment manufacturers. The sector has done great, sure, but be cautious on valuations.

computer software / processing
BUY
Applied Materials

Is sticking with it. Trades at a 20% discount to [inaudible].

electrical / electronic
DON'T BUY

He sold it in late January. It was trading at a high 33x and growth was slowing. Free cash flow margins were cut in half. They do have a loyal following, but they can't sustain price increases. He doesn't want to own big-box retail and prefers luxury.

department stores
HOLD

He trimmed it last September to decrease his overall healthcare allocation. UNH has slowing topline and profits, but it's still growing with secular tailwinds, and rising enrollments, so he's holding on. UNH has outperformed all healthcare over the last 12 months by 40%.

medical services
BUY
ConocoPhillips

Energy remains a favoured sector as oil and gas prices remain up from supply constraints. A large, diversified operator with lower production costs. Trades at 10x, a little expensive, but still high quality.

integrated oils
SELL
Crane Co.

He had a small position. The valuation got extended as shares rallied 40% over the last 9 months. Free cash flow turned negative.

management / diversified
BUY

They're a dominant player in chip design software. Shares have been up 27% since October. They continue to execute in a difficult environment.

Technology
BUY
Rio Tinto

A UK company, leveraged to the China reopening and shares are cheap.

other mines
COMMENT
A Comment -- General Comments From an Expert
tech The reckoning in growth/tech stocks is not over, because valuations are still high. Growth trades at a 65% premium to value stocks, down from 100% in 2021. The 10-year average is 35%. Growth's outperformance over value from 2019-2021 was only half-driven by better earnings, the other half my expanding multiples and driven by the Fed's easy policy and low rates. We're in an oversold bounce now, but not at a real bottom....yet.
Unknown
BUY
He bought Cadence last week. It's a defensive play on the semi value chain. They provide chip design software and consulting services aimed at enhancing production efficiency. This area is more insulated to slowing capex. Companies are seeking more efficient, next-generation chips. Yes, Cadence is more expensive than others, but it's highly defensive given high free cash flow.
Technology
SELL
Procter & Gamble
Price matters. He sold P&G on valuation slowing topline growth and weaker free cash flow. Most of their sales are overseas and the stronger USD will impact profits. Some consumers are shifting to lower-priced items, too.
misc consumer products
DON'T BUY
Free cash flow is weakening, and there's not a willingness by management to prioritize their spending. This is a show-me story.
0
COMMENT
A Comment -- General Comments From an Expert
energy Energy is cheap vs. the market. The companies aren't doing big capex. Yes, they've had a great run, but it will remain his second-favourite sector, behind healthcare heading into 2023. Energy is still under-owned and is a fine hedge to geopolitics and inflation.
Unknown
STRONG BUY
His favourite stock in his favourite sector. It is up 18% YTD.
Pharma & Healthcare
Showing 1 to 15 of 65 entries