TOP PICK
Great ability to execute on a business plan. Dramatically changed their business model to more of a services company than hardware. Bookings in 4th quarter were much better than expected. Cash flow is well in excess of the dividend.
TOP PICK
Health care waste management. More of a defensible area. 25% of market share in US and 10% internationally. Top player in a very fragmented market. Making a lot of tuck-in acquisitions.
TOP PICK
Clothing stores. 2nd largest retailer in the US. In a poor economy, people are trading down in retail. Projecting store growth in 09.
DON'T BUY
4 key segments. Some catalysts going forward but it is a big risk. AOL subscribers declining at a rapid rate. Publishing business is tied to advertising, which is very weak. Film/entertainment segment is challenged but there are opportunities. Network side is tied to advertising. Time Warner cable is being spun out for $9.2 billion and can be used for buybacks, debt reduction and acquisitions.
WAIT
Lot of moving parts and different areas they are involved in. Some very cyclical and some more resistant to economic pressures. Their plastics business is almost a benchmark of what is going to happen and this has been really challenged. A name you will always want to have some exposure to. No need to start buying yet.
BUY
Out performed their energy peer group dramatically last year. Better positioned globally. Think there are still opportunities here.
DON'T BUY
Bank Of America (BAC-N) and Citigroup (C-N) are big challenges to invest in. Low prices are telling you that investors are concerned that equity holders are going to get wiped out. Acquired a lot of their toxic debt through the Merrill Lynch deal more than they expected.
DON'T BUY
Bank Of America (BAC-N) and Citigroup (C-N) are big challenges to invest in. Low prices are telling you that investors are concerned that equity holders are going to get wiped out.
HOLD
3 main elements have occurred recently. 1.) New CEO is an operator and cost cutter who will refocus the company strategically. 2.) Aggressive cost cutting. 3.) Refocusing the business. Have assets that they could monetize. 4th quarter performance was not too bad.
COMMENT
US$: - Because all countries globally will be into deficit financing, he can see the US$ remaining in its current relative position. There might be some weakness, but he doesn't see any sustainable weakness. Sees inflation ticking up but not dramatically.
COMMENT
Verizon (VZ-N) vs. Vodafone (VOD-N). In a joint venture together with Verizon Wireless so revenue is split between the 2. Verizon has a fair number of catalysts in the US. The challenge with telcos is the competitive environment. Bread-and-butter has always been landlines and they are losing subscribers rapidly. With Verizon's broadband exposure, this would be his choice.
DON'T BUY
Nationalized? It is quite possible that he is sceptical based on the news that they are trying to get private equity in there, which indicates they want to keep it in public hands. There are a lot of political issues.
BUY
Great company. One of the biggest international and most recognized brand names. Challenge has been to diversify their breakdown of assets from carbonated soft drinks into other beverages. Globally starting to get into water, teas and sports drinks, which are starting to show growth. Commodity prices will be declining, which should help them on the margins. 3.5% yield is safe.
HOLD
Better positioning in the enterprise business compared to Verizon (VZ-N). Line losses are also less. 6.3% dividend is quite stable.
HOLD
Has performed relatively well this year. They are in some of the more challenged environments to have assets. One of the top holders of broad based assets with good exposure to E&P, refining and chemicals. Even with the decline in oil, a lot of these companies make sense.