Opinions by David Burrows | StockChase
4244
David Burrows

President & Chief Investment Strategist

ON STOCKCHASE SINCE Jun 2001

Barometer Capital Management


Opinions by David Burrows


Signal Opinion Expert Chart

2017-11-21

N/A
A Comment -- General Comments From an Expert 

Market. North American equity markets made new all-time highs in 2013, the 1st time since the 90s. We rallied 2 years into 2015 and corrected globally. Since February 2016, the market has been slowly making its way higher. We had begun a long reflation of equities in 2016. We have a synchronized growth going on globally, and equities are really an attractive asset class when you have the beginnings of reflation. It can go on for a long time. The hardest thing in a bull market is to stay in your winning positions. Everybody worries, which is good. Looking at the 3 years that came after the first major correction in a bull market of the 50s, there was a rally for 3 years with no volatility. In the rally after the first major correction in 1984 for the 80s and 90s bull market, you had 3 years with no major correction. Since February 2016, we’ve been getting 3%-4% corrections. Another correction is not coming, as there are people with cash sitting waiting for it. In the next 12 months you are going to see a real correction, and then you’ll probably get another 3-4 years of good markets. Regarding cyclicals, flows out of bonds has barely begun. (They’ve been flowing into bonds for over 40 years.) It is relatively early. US banks are trading at 1X BV, and they traded at 2X-3X in the past, and BV is growing.

David Burrows

President & Chief Investment Strategist, Barometer Capital Management

Price: $0.020
Owned: _N/A

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2017-11-21

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A Comment -- General Comments From an Expert 

Price to Book ratio? The value you pay for an asset in the event there was a problem. When looking at US banks trading at 1X or 1.5X BV, you are not paying that much for the assets you are getting.

David Burrows

President & Chief Investment Strategist, Barometer Capital Management

Price: $0.020
Owned: _N/A

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2017-11-21

BUY
Apple (AAPL-Q)

An inexpensive company. Filled with cash, but has lots of interesting catalysts. Their recent iPhone 10 is really interesting, as it gives them the only true integrated platform for augmented reality, which could turn out to be much bigger than people think. Margins are strong when looking at services, and is growing very rapidly.

electrical/electronic
David Burrows

President & Chief Investment Strategist, Barometer Capital Management

Price: $173.140
Owned: Yes

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2017-11-21

BUY
Applied Materials (AMAT-Q)

There are 4 key structural themes in technology. Cloud-based computing, software as a service, the Internet of Things. This makes equipment that makes semiconductors. Estimates are that the average house will have 17 connected devices over the next 3 years. From early to the middle of October, the market started to consolidate. While the percentage of stocks in uptrends didn’t deteriorate, it went from 78% of stocks with positive weekly price momentum down to 30%. In the last 3 days, the leadership groups have re-accelerated, broke out and made new highs. This company fits right into that camp.

electrical/electronic
David Burrows

President & Chief Investment Strategist, Barometer Capital Management

Price: $58.800
Owned: Yes

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2017-11-21

COMMENT
Amazon.com (AMZN-Q)

It’s not too late to get into this. As long as we are in a decent market and as long as this continues to beat estimates, it should continue to participate. The leader in a Bull market tends to be a leader to the very end. You are likely to see the weaklings roll over first. Right now, breadth is expanding and weaklings are not rolling over. Stay in the leading stock as they have a tremendous advantage.

specialty stores
David Burrows

President & Chief Investment Strategist, Barometer Capital Management

Price: $1139.490
Owned: Unknown

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2017-11-21

PAST TOP PICK
Bank of America (BAC-N)

(A Top Pick Dec 13/16. Up 20%.) We are still very early in a revaluation of US banks. Trading at 1X Book. BV is growing, so there could be an expansion of the multiple of BV. Tax reform would be good for this bank. 85% of its revenues come from the US.

banks
David Burrows

President & Chief Investment Strategist, Barometer Capital Management

Price: $26.730
Owned: Yes

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2017-11-21

TOP PICK
Bank of America (BAC-N)

When in a strong market and there is clear leadership, there is no reason to jump from one boxcar to another. If the things causing structural change are continuing to strengthen, that is a good reason to stay in position. There are 4 key things that are going to move this higher. 1.) Rising interest rates. 2.) Deregulation. 3.) Cost cutting. (Have cut $10 billion of expenses since 2010.) 4.) Economic growth is accelerating, which helps grow business. Raised their dividend 60% last year, and it is going to increase again this year. Financials can be revalued, multiples can expand and earnings can get better, for 5 to 7 years. Dividend yield of 1.8%. (Analysts’ price target is $29.)

banks
David Burrows

President & Chief Investment Strategist, Barometer Capital Management

Price: $26.730
Owned: Yes

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2017-11-21

COMMENT
Baytex Energy Corp (BTE-T)

Energy is tough. When it rolled over in 2014, there was a 66% decline. At $26 a barrel, oil reversed and there was a one-year rally, quite similar to what happens when a bubble bursts. The difficulty is that the industry has changed. When the price goes up, production can come on pretty quickly with fracing. Look at these as trades, not some structural long-term bull market. If you are going to invest in oil, you want to buy one that has been able to get better while everybody else has been struggling. The 150-day moving average on this one is falling. He would pick a point below the price it is trading at now, such as $3.50, and use that as a Stop/Loss.

oil/gas
David Burrows

President & Chief Investment Strategist, Barometer Capital Management

Price: $3.820
Owned: No

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2017-11-21

BUY
China Technology Gugenheim (CQQQ-N)

One of his big themes has been China. The conception is that the market opportunity is pretty big. As a piece of a portfolio, he sees no reason why you can’t have a piece of this.

E.T.F.'s
David Burrows

President & Chief Investment Strategist, Barometer Capital Management

Price: $66.850
Owned: No

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2017-11-21

BUY on WEAKNESS
Dollarama Inc. (DOL-T)

One that got away from him. He likes companies that are good and getting better, and this is one of them. The price chart seems to gap higher about every 3 months. He’s been very cautious on retail, but this has been a really good foil against the group. It tends to rally around the earnings period and then consolidates after. In the short run, it’s a little extended and a little stretched away from the 50-day moving average, so there is a little risk. A good company. As a long-term hold, this is good.

Consumer Products
David Burrows

President & Chief Investment Strategist, Barometer Capital Management

Price: $158.700
Owned: No

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2017-11-21

PAST TOP PICK
Dow Chemical (DOW-N Merged)

(A Top Pick Dec 13/16. Up 7%.) This has merged and is going to split into 3 pieces. The underlying metrics of the 3 different businesses are all generally improving. Generates a lot of cash.

chemicals
David Burrows

President & Chief Investment Strategist, Barometer Capital Management

Price: $66.650
Owned: Yes

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2017-11-21

TOP PICK
DowDuPont Inc. (DWDP-N)

The scenario is playing out, the merger is complete and they are working toward spinning out these 3 different businesses. The economy continues to get better, so pricing is good. Feedstock costs are low. This can go on for a long time. The dividend will grow. Dividend yield of 2.2%. (Analysts’ price target is $80.)

chemicals
David Burrows

President & Chief Investment Strategist, Barometer Capital Management

Price: $71.260
Owned: Yes

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2017-11-21

COMMENT
Ford Motor (F-N)

This has rallied from about $10 to a little over $12. It’s had a good bounce. The group has been coming back into favour, however it’s probably not the strongest in the group. If he had to pick one automobile stock, it would probably be GM. They both could face some structural problems if this EV thing continues to come, as it looks like it is going to.

Automotive
David Burrows

President & Chief Investment Strategist, Barometer Capital Management

Price: $12.120
Owned: Unknown

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2017-11-21

DON'T BUY
Great West Lifeco (GWO-T)

Having a multiyear low in long-term interest rates last June, this is likely to creep higher for many years. Looking at insurance companies, rising rates are good for them. Being in a pretty good equity market, equity returns help the insurance industry. It’s a group he is quite interested in, and they could do well for many years. If he had to pick a Canadian insurer, he would probably pick Manulife (MFC-T) as the leader in the group. Technically it is acting the best and has a great global footprint with great growth in Asia. We are in a bull market, so you don’t want to buy a company that is not going up yet.

insurance
David Burrows

President & Chief Investment Strategist, Barometer Capital Management

Price: $35.460
Owned: Unknown

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2017-11-21

COMMENT
Keyera Corp (KEY-T)

Oil is a structural macro problem for energy infrastructure companies right now. Trading near its lows, as is the whole group. From 2009 through 2014, prices rose for oil, volumes grew dramatically, dividends grew dramatically, and energy infrastructure companies went from 6X earnings to 24X earnings, and then the bubble burst. Stocks are reflecting that growth will not necessarily be there.

oil/gas
David Burrows

President & Chief Investment Strategist, Barometer Capital Management

Price: $36.640
Owned: Unknown

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