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Largest animal healthcare company globally. There are opportunities with their ability to increase their animal companion ability where there is an increasing amount of emerging markets moving to a higher standard of living and higher adoption of companion animals. 0.81% dividend is paltry, but over the course of time he believes this can grow substantially. This has to do with their ability to double their free cash flow of $500 million to over $1 billion inside of 3 years. His target is $37 for 12 months.
Data transfer but mainly data storage. Had a couple of overhangs in their latest quarters, particularly when earnings were less than expected. Part of that was the 16 day shutdown of US federal governments. Expects better results in the next quarter, where most of the gains will be temporal with moving their high-end servers and switching to newer products, their newer platform VNX. Yield of 1.67%.
4 segments to this business. Packaging/Courier, less than truckload, specialized services, which includes energy and waste management. CEO is expecting a pretty much flat environment on the top line. Third-quarter revenue came in later than was anticipated. He is choosing this because of their operations, the way in which management goes out there, buys companies, and consolidates and integrates them. They have the ability to unload unnecessary assets and drive the cash flows into more strategic acquisitions. Yield of 2.73%.
Most of the overhangs seemed to have been sorted out with paying back the US government and it looks like the company is going back to its roots as a property/casualty insurer, as well as some part wealth management. The issue here is the amount of volatility the name. Trading at a much better valuation on a Price to Book basis, relative to other insurers in this space. He prefers going domestic in the financial space and less levered to being so interest sensitive.
Has had softer quarters recently creating lower stock prices. Have some opportunities down the road. Recently announced a significant increase to their share buybacks, which is good for the near-term in keeping the stock at a certain floor level. Concerns on shifting over to Cloud along with other competitors are giving them some challenges, but they have the capacity to handle this. Their ability to stick handle the next few quarters will be challenging but current downturn is a longer-term buying opportunity. (See Past Top Picks and Top Picks.)
Feels there is continued upside on this, both on domestic and international fronts. One of the auto companies that did not take any tarp money, which speaks quite highly of their management and their ability to be able to execute and handle their financial house. With the low interest-rate environment, there is still going to be opportunity for the consumer market to upgrade to newer models. He can see upside in names like this. Technically, this is in a band and when it touches the bottom side of the band, that is when you make an entry.
A very nice healthy dividend of 2.2%. Continental Europe has helped them because of their suffering as well as opportunities to celebrate by being out of recession. Feels the 12.2X current earnings valuation is better than some of its closest peers. You want to look at this trading at the lower end of a positive band. A reasonable price would be somewhere under $100.
Has always traded at a lower valuation than some of the other pharmaceuticals. Has a fair number of patent expiry overhangs that it faces. There are only a few drugs that have been really able to keep their momentum going. On valuation, it always looks attractive, but with the problem of getting new drugs to market, there are other names that he would prefer such as Pfizer (PFE-N) or Johnson & Johnson (JNJ-N).
(A Top Pick Nov 19/12. Up 13.54%.) Still feels good about it. Lagged some of the other larger tech companies, but is still the leader in terms of providing the wireless and mobile market with LTE 4G technology chips. They still dominate substantially in terms of market share. They not only generate chip revenues, but also licensing revenues. Excellent margins in this business. He would consider buying in the low or mid $60s.
(A Top Pick Nov 19/12. Up 25.37%.) Spun off their branded pharmaceutical business last year and he offloaded the AbVie (ABBV-N) component and kept this part that was more focused on medical devices and nutritions. Still likes. Increased their dividend by 57%. Most recent quarter showed that they had made 2 acquisitions on the medical devices side in cataract surgery equipment. 3.2% dividend yield.
Markets. US shows the most promising opportunity in growth, particularly in the more cyclical side of the business. There are opportunities in companies that are tied to logistics as well as infrastructure and the consumer side. There is the overhang of gridlock in the US in the horizon but part of that is mitigated in the way you invest. He invests in larger cap lower beta names that can offset a little of that risk. Canada is a little bit more handcuffed based on what the US does. Our interest rates are going to have to remain low for companies to remain competitive. There are some pockets of opportunities, particularly in the infrastructure space. There are parts of the Canadian economy within the consumer space, as well as in the financials that are very promising and tend to lead the charts.