John Zechner
Member since: Jan '01
Chairman at
J. Zechner & Assoc

Latest Top Picks

(A Top Pick Dec 31/18, Down 5%) The uranium stocks (and new uranium supplies) won't move up until the commodity rises above $50. It's trading under $30 now. Uranium demand is probably 40% higher than supply. Demand is growing as new nuclear reactors increase; there's demand, but there's an inventory overhang that's pressuring the price. Once the inventory winds down, the stock will move.
(A Top Pick Dec 31/18, Up 20%) He still likes it. They did wrong things in the past--issuing alot of equity--but are doing the right things now--share buybacks and selling off assets. These please shareholders, not production growth. CPG just sold its infrastructure assets last month at 7x, but the stock is trading at 3x. The balance sheet is now 2x debt-to-EBITDA.
(A Top Pick Dec 31/18, Down 0.4%) Slower global growth, not Amazon, has pressured this stock. Also, FedEx is in the crosshairs of the US-China trade war which has hurt the earnings. But FedEx has a great global footprint, trading below 10x forward earnings.
He's sticking with this, a past pick. He doesn't expect a US-China trade deal, maybe just more peace. FedEx has been hurt by slowing global growth, but this is reflected in the multiple. The Amazon Effect isn't that big; Amazon amounted to only 1% of FedEx's revenues. Online delivery will continue to grow. FDX has a lower cost structure than UPS. The valuation is really attractive here. There's a lot of downside protection in a sloppy economy, but FDX can also participate if the market rises more. (Analysts’ price target is $171.33)
They are well-positioned, what he wants an energy company to do. Forget about growing production, but rather get out of residual assets, improving their balance sheet and buying back shares. They're doing the opposite of what they did for years--issuing equity which drowned out valuation. They finally listened to shareholders and have reversed course. Great value at 3x operating cash flow. They just sold off infrastructure assets in Utah at 8x. Free cash flow yield is nearly 20%, which is great value. (Analysts’ price target is $7.40)