Opinions by David Burrows | StockChase
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David Burrows

President & Chief Investment Strategist

ON STOCKCHASE SINCE Jun 2001

Barometer Capital Management


Opinions by David Burrows



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2017-10-18

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

Market. The 10-year chart for the S&P 500 is a thing of beauty. Trading at record levels. If looking at PEs vs estimates, there are people who will point out that the PE multiples have been moving higher, so prices are higher. Last quarter, 55% of companies beat the estimates, so estimates are too low. That has been rising. PE multiples that people are looking at are probably making stocks look more expensive than they are. Secondly, we are in an extremely low interest rate environment, and PEs can be higher. We are in a secular bull market for equities. It didn’t start until 2013. When you took out the highs from the last bull market in 2000, that was the 1st year of multiple expansion, and multiples have been expanding since. There will be corrections, but expects equities between 2013 and 2023 are probably in the teens from a return standpoint. The volatility we have been seeing, that everyone is saying is so low, is virtually identical to the early 90s and identical to the early 50s. Both were in secular bull markets. We will see a good-sized correction out there somewhere, but none of his work points to any of the things that would be happening if it were coming up soon. As long as the percentage of stocks performing well are expanding, there is no bear market or correction that has ever taken place while that is happening. The most important thing in the way a market is behaving, is how it reacts to news. For example, there have been lots of big news items last year and the market hasn’t cared.

David Burrows

President & Chief Investment Strategist, Barometer Capital Management

Price: $0.020
Owned: _N/A

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2017-10-18

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

Stop losses? He uses point and figure price charts, which mark out the orderly progress of either higher highs and higher lows, or lower lows and lower highs. He would encourage you to get a book on this. A very good one would be Tom Dorsey on point and figure charting. In the absence of that, for a longer-term investor, you could use a 150-day moving average. It is amazing how often a stock pulls back and then reverses higher at their 150-day moving average. If a stock dipped below this on heavy volume, that would be a good reason to become a seller.

David Burrows

President & Chief Investment Strategist, Barometer Capital Management

Price: $0.020
Owned: _N/A

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2017-10-18

COMMENT
A Comment -- General Comments From an Expert 

Good stock or ETF for medical devices? He likes the area as a sector. If you check out iShares DJ Medical Devices ETF (IHI-N), it had a wonderful rally through 2016 into July 2017. Since then it has consolidated sideways, and is within a whisper of breaking out to a new high. The group is a little more economically sensitive than big Pharma, because more of these things are paid for by people who have more confidence to buy. You could also look at Stryker (SYK-N), which he owns, which manufactures hips and knees.

David Burrows

President & Chief Investment Strategist, Barometer Capital Management

Price: $0.020
Owned: Unknown

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2017-10-18

BUY
Apple (AAPL-Q)

(Market Call Minute.) You are making a bet here on augmented future reality, which is what they have done with their phones.

electrical/electronic
David Burrows

President & Chief Investment Strategist, Barometer Capital Management

Price: $159.760
Owned: Yes

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2017-10-18

BUY
Pure Industrial Real Estatetrust Trust (AAR.UN-T)

Industrial properties. It is more cyclical and more tied to the business cycle. As business gets better, it will likely be able to raise rents. It has now pulled back to the 150-day moving average, which is a good place to buy it. Dividend yield of 4.8% is pretty attractive.

property mngmnt/investment
David Burrows

President & Chief Investment Strategist, Barometer Capital Management

Price: $6.440
Owned: No

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2017-10-18

SELL
Allergan PLC. (AGN-N)

(Market Call Minute.) A broken stock and he would Sell it and move on.

Consumer Products
David Burrows

President & Chief Investment Strategist, Barometer Capital Management

Price: $187.150
Owned: Unknown

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2017-10-18

COMMENT
Algonquin Power & Utilities Corp (AQN-T)

If you are going to be in this space, you are going to have to have growth, and this company has that. This is way outperforming the group. 4.3% dividend yield. (See Top Picks.)

electrical utilities
David Burrows

President & Chief Investment Strategist, Barometer Capital Management

Price: $13.910
Owned: Yes

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2017-10-18

BUY
Alibaba Group Holding (BABA-N)

(Market Call Minute.) If you believe in online retail, you have to believe in this company. They control China. They have the opportunity to become the world’s biggest payment company. The risk is political.

David Burrows

President & Chief Investment Strategist, Barometer Capital Management

Price: $179.610
Owned: Unknown

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2017-10-18

COMMENT
CAE Inc (CAE-T)

He likes aerospace, both on the defence side and civil aviation side. This company really has sort of a lock on simulators, etc. He thinks the stock is okay. It pulled back to the 150-day moving average a little while ago and rallied off of that, and is trading at about $1 below its high. They have broad exposure across the sector. He wouldn’t have a problem with it, but there might be some better technical names to look at.

transportation equip & components
David Burrows

President & Chief Investment Strategist, Barometer Capital Management

Price: $21.930
Owned: Unknown

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2017-10-18

HOLD
Cisco (CSCO-Q)

Since the market ticked up in February 2016 it has been a very steady rally. The leading group off the bottom was technology. Almost always, a group that leads off the bottom will continue in the course of the cyclical rally. This group continues to lead the market. Old tech is not expensive, it is like 14X earnings. They have great cash flow. This is not the best stock in the group, but if you own it continue to hold it.

electrical/electronic
David Burrows

President & Chief Investment Strategist, Barometer Capital Management

Price: $33.550
Owned: Unknown

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2017-10-18

COMMENT
Enbridge (ENB-T)

We are in a low interest rate environment, and pipelines are something people would own if they believed we are staying in a low interest rate environment. From 2009 to 2014, there was an enormous boom in production, which meant tolls went up a lot. As they went up, earnings, cash flow and dividends went up, and the multiples that investors were prepared to pay went up. They turned into growth stocks. Then volume growth started to slow down, so the multiple has been compressing. He wouldn’t focus in bond proxies such as this.

oil/gas pipelines
David Burrows

President & Chief Investment Strategist, Barometer Capital Management

Price: $50.420
Owned: Unknown

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2017-10-18

TOP PICK
FedEx (FDX-N)

This is very sensitive to the global economy. They bought TNT and have been integrating that and reducing costs. As economic activity picks up, these quick deliveries accelerate and the pricing power improves. This is not just the US. Every major developed economy is accelerating at the same time. Dividend yield of 0.9%. (Analysts’ price target is $239.)

Transportation
David Burrows

President & Chief Investment Strategist, Barometer Capital Management

Price: $222.300
Owned: Yes

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2017-10-18

BUY
Intel (INTC-Q)

He watches semiconductor stocks as a bellwether for the market. This consolidated between $38 and $33 from September until September. Then it broke out and went to $40, traded sideways for 8-9 days, and is breaking out again today. He is a big bull on the semiconductor cycle for the Internet of things. This is a really attractive company, and is talking about splitting itself sometime.

electrical/electronic
David Burrows

President & Chief Investment Strategist, Barometer Capital Management

Price: $40.250
Owned: Unknown

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2017-10-18

PAST TOP PICK
Ingersoll-Rand Co (IR-N)

(A Top Pick November 22/16. Up 23%.) He continues to like the industrial sector. Machinery is slowly becoming interconnected. The capital stock of the US economy is the oldest it has been in history. In the last year, companies who are spending, are being rewarded by the share prices going up.

misc industrial products
David Burrows

President & Chief Investment Strategist, Barometer Capital Management

Price: $91.220
Owned: No

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2017-10-18

PAST TOP PICK
JP Morgan Chase & Co (JPM-N)

(A Top Pick November 22/16. Up 28%.) This could be another Top Pick today, if he hadn’t chosen it 3 times in the past year. Financials will benefit from a reflation cycle, probably for 5-6 years. US financials are trading at about 1X their BV, and have traded as high as 3X in the past. The best bank in the US.

Financial Services
David Burrows

President & Chief Investment Strategist, Barometer Capital Management

Price: $97.990
Owned: Yes

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