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COMMENT
Markets – In spit of all the darkness, there are some good data points. S&P 500 companies are expected to grow profits 16% this year and then 14% next year. Valuations have come in quite a bit. S&P is trading at about 11.5X this year's earnings. Although governments may be bankrupt, corporate America is not. Have a lot of cash on their balance sheets, very negative right now, which is a good thing. buying back stock, raising dividends, making acquisitions and refinancing with low interest rates.2 Million jobs have been added since 2010. Investor sentiment is very negative right now, which is a good thing. Bear sentiment is over 40%.
BUY
Very high quality, diversified, industrial company. Divisions include Pratt & Whitney aircraft engines, Otis elevators, Carrier heating and ventilation. About 40% of their revenues are after market in servicing, so in an economic downturn, there is more cushion for them. Have grown earnings annually about 10% for the last 10 years and have increased their dividend 15%. Definitely a long-term hold.
mngmnt
diversified
DON'T BUY
The largest generic drug producer but also have a branded division. There is concern that there will be increasing competition. As well, expect there will be increasing pressure for any industry that is being reimbursed by governments, especially the US. As the market improves, this stock should lift from here but longer-term, she wouldn't be a buyer.
biotechnology
pharmaceutical
HOLD
Gold equities have lagged the gold price but expect they will play catch up. Large cap golds are trying to grow their production, and if they can’t do it organically they have to make acquisitions. This one acquired Redback Mining so they now have an inventory of projects to work on.
precious metals
DON'T BUY
Definitely a growth stock and have very good store potential in the US.Managed their business very well and made a lot of money but stock trades at a huge multiple, about 50X forward earnings. Too expensive for her. If they stumble in any way, there will be a big correction in the stock.
electrical
electronic
COMMENT
Multiple has contracted to about 9X forward earnings and have reset their earnings and revenue growth targets to more realistic levels. Experiencing more competition in their router space. Their big end markets are governments and telecom carriers, which are both showing weakness. Expects the stock has bottomed and longer-term demand for products could improve. Have a lot of cash.
electrical
electronic
TOP PICK
(A Top Pick Sept 27/10. Down 9.37%.)Has been a laggard among Canadian banks, primarily because of the volatility in their trading revenue. Their domestic franchise is very strong and posted pretty good earnings. Wealth management, long-term, is the right direction as demographics favour this. Yield of about 4.7%.
banks
