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Stock Opinions by Stephanie Link, Chief investment strategist, Hightower

BUY
She can't believe it trades at 11.6x earnings and pays a 3.5% dividend and yet is down 35% this year. It has not been spared. She likes their mix of AI, cloud computing and data centre. Likes this mix of revenues which will help margins. She doesn't see excess inventory from them. They generate $16 billion of free cash flow a year, so they can buyback shares, raise their dividend and buy companies.
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BUY
Their core business is real, has quality, size and scale with 2-3 billion daily and monthly active users have. They probably will fix Reels, though it's a show-me story. Balance sheet is strong with $20 billion in free cash. Cost-cutting amounts to $6 billion. They have many levers to pull. She expects solid earnings through revenues could be lower because digital ads are slowing, plus they face competition. Their base business alone is worth more than the current 11x PE.
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BUY
It can go higher and has had a great run from its lows. It's the #1 services company in the industry. It's a hidden technology play. They have pricing power, so margins will expand by 200 basis points this year. Wait till the international recovery next year--that'll be the sweet spot. Now, shares are on sale.
oil / gas field services
BUY
It's down 40% YTD, but she likes its pricing power of 5%, great portfolio, revenues are growing, and boasts high-single digit earnings. Likes it long term.
Consumer Products
BUY on WEAKNESS
She wished she had bought this. She's been deterred because it always trades at a pricey 26x forward PE. They beat and raise no matter what over the past DECADE. Total organic growth by 16% let by Frit0 Lay North America (up 20%). Why? They have the products and pricing power. This is definitely a buy on pullback.
food processing
BUY
It is discretionary and staples, so a bit defensive. 80% of revenues are consumables, so will benefit as consumers trade down. Business has been steady due to pricing. Not cheap at 23x PE, but defensive and steady.
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BUY
beat earnings today Likes it for its diversified end market and very strong execution. Superb managers and their quarter proved it. Semi total revenue grew 32% YOY, and it 78% of company revenues. Software grew 5% YOY and gross margins were nearly 76%. Their backlog also grew. Guidance was also encouraging with semis to grow 22% and software grow around 5%. She ecpects in Q4 they will raise their dividend by 20% because they have $12 billion free cash flow.
electrical / electronic
COMMENT
Today's hot jobs data The data this week has been very encouraging, like factory orders being better than expected and new orders in the ISM report. Inflation is coming down. However, the economy can handle higher interest rates; unemployment is only 3.5%. The Fed didn't pivot--and has no reason to--last month. She's more worried about 2023, because we don't know the effect of all these rate hikes. For now, though, things look pretty okay.
Unknown
STRONG BUY
Just reported solid Q2 earnings and the price target rose The stock is down 17% from its high, pays over a 3.5% dividend yield, and trades at 8.5x PE. The quarter was really good. It's interesting that they chose to increase their share buyback than increase production, which fell in that quarter. They're returning cash to shareholders like the other oil companies. She has been adding to energy on this pullback. Oil companies can make money at $40-50 oil/barrel, including Chevron. She expects more returns to shareholders. Oil stocks remain cheap and earnings went up for the group. It's her favourite sector.
integrated oils
BUY
She has been adding to energy on this pullback. Oil companies can make money at $40-50 oil/barrel. Oil stocks remain cheap and earnings went up for the group. It's her favourite sector.
integrated oils
BUY
Had a good earnings report yesterday, narrowing the range for earnings and total revenue. Companion animal business is up 14% and they have many products in the pipeline.
Consumer Products
COMMENT
Consumer staples this week have been beaten. It's disappointing that we can't sustain a rally like today, even though earnings recently have been good--except this week where retail earnings were terrible. Consumer demand has been strong, but higher costs are eating into profits. No, she sees no recession this year. Next year, we'll see. Not just the Fed, but supply chains will also fight inflation. Tech and comm. services are 35% of the S&P and are still over-owned. Buy companies that make money, have earnings.
Unknown
DON'T BUY
Walmart didn't follow what the consumer was doing--buying more experiences. So, Walmart is left with a lot of inventory. Walmart missed the signal.
department stores
BUY
Companies like Expedia have pricing power. These are the companies to own and not retailers that lack pricing power like Target or Walmart.
merchandising / lodging
BUY
She bought more today. She likes farm equipment's secular growth; likes how Deere is introducing technology to make their business more efficient which will improve margin. But they are also hit by the supply chain. They beat their quarter--precision and production ag came in light, but up 13%. Construction and forestry segments were stellar with revenues up 9% YOY; operating profit was up 66%. This current share drop is overdone. Deere has hung on better than other industrials. They just announced 9% revenue growth, and 17% earnings growth, and raised guidance.
machinery
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