Rob Sechan, Managing Partner, New Edge Capital

They report tomorrow. Lower interest rates will push sales, and the extreme weather is behind us.

A tough stock that you must be patient with, but ultimately this is a double-digit compounder with healthy fundamentals. They're seeing slower than expectation monetization of AI (Firefly). It's a show-me story. He's underwater on this, but you can buy this at current levels.

It's a turnaround story, so he initiated a position. He is selective in industrials, because they trade at a 24x forward PE, higher than the S&P.

Industrials have done very well for him, but are now expensive at 24x forward PE, higher than the S&P. Industrials are cyclical, too.

He's overweight financials, which benefit from a soft landing, steeper yield curve which drives their net interest income higher. WFC has managed expenses very well. There's more bang for you buck here vs. its peers.

Is up 80% in the past month, the best S&P performer and hitting a new high today. Healthy profits and unique assets with secular growth from nuclear energy demand, which needs to fuel AI production. But Vistra is no longer cheap at 24x forward PE, so he expects it to consolidate.

He started sell this in early 2023. Is up 20% since Q2, though. He sold it because loss ratios were off, though stabilizing now. 

The sold it over the summer. They report next week, A quality business but economically sensitive to the industrial capex cycle. Not a bad company. He sold it to buy more 3M. A reason to sell is that we may not see the soft landing to the economy. It trades at 32x forward PE vs.17x PE in 3M, which runs a more diversified business.

It trades at only 17x PE in 3M, and it runs a diversified business.

Because of today's strong jobs report, people will buy DECK's products into the holiday season.

Just announced blow-out earnings and shares are jumping 14% today. Is up 80% in the past year, outperforming 6 of the Mag 7 names. They raised their dividend and buybacks. A good compounder. Trades at 14x today, and a 40% discount to discretionary peers. Operating margin is double their peers in a capital-lite business.

His pick. Let's see if demand broadens out.

The anti-trust suit is more bark than bite, this regulatory overhang. It takes years for the decisions to come down and won't impact the company overall. Google will remain the top search engine; it's so dominant. At most, there will be a very short-term drag on the stock.

On the recent pullback, he bought half a position, because he sees downside to the risk. On the pullback, NVDA's PE fell close to the level he wanted. It is one of the highest-quality tech margins, generating enormous free cash flow, 78% gross margins, 65% operating margins, no debt and capex is only 1% of sales.

Consumer staples have been performing under the radar and will continue.