Latest Stock Buy or Sell? Make More Informed Decisions!

Markets. It is more than a 50/50 chance that the Fed is going to raise interest rates tomorrow. As an investor, he is hoping that he is right. This need to get out of the way. The US economy is in reasonable shape and can afford a move towards normalization. Thinks the impact on the markets will be limited. If they don’t raise rates it may just add more volatility, because it is anticipating the next meeting and how much they are going to raise at that time. The US is his favourite economy right now, yet he is not overweight the US market. Sees some better opportunities in other markets around the world. This is a little difficult right now because of the strength in the US economy, but valuations in the US are reasonably fairly valued, so he sees opportunities in Europe and Asia that are a little better. Right now, Europe is being affected by what is happening in Asia. Germany in particular has a fair amount of exports to Southeast Asia and China, and there is negative sentiment coming from the consumer. Newspapers’ headlines are all fairly negative on China which is having a negative sentiment. This impacts Europe, but overall feels European prospects are improving. It is going to be dragged up by the good economy in the US, and he sees some good opportunities in the European stock market. He favours European companies that have exposure to the US. They are going to be the biggest beneficiaries of the weaker euro relative to the US$, and will also be beneficiaries of a strong US economy because of demand from the US consumer. However, he is fairly optimistic on the “domestic markets” in Europe. Thinks there will be a decent recovery in consumption. Emerging-market prospects are not as good as they were several years ago, but when you look at the opportunity with the valuation and the selloff that they have had, there are some real good opportunities presenting themselves.

This is a conundrum. It should be doing better. Very good management. Has a really good franchise in China, and he thinks that is what has really hurt the stock in the short term. Doesn’t expect to see the stock perform extremely well in the near term. However, it has a dividend that is very secure and yielding over 5%. A pretty safe place to park your money.

This has been one of his top 10 names in his Global Growth fund. It is as pure a play on consumer globally as you can find, with the exception of Europe. Buying Visa Europe is expected to happen over the next 12 months. They are going to pay a pretty good multiple for it, but believes it will be accretive for the shareholders.

Not a growth stock, so not a company he would hold in his growth fund. However, it is a very good company. If you are looking for a dividend yield, there is nothing wrong with owning this. They are suffering in emerging markets, because everybody is right now. Have a very good business in India and feels the prospects for them are rather positive. Dividend yield of 7%.

He favours the pharmaceutical giants Navartis and Roche. Both are exposed to oncology. Lots of really positive developments going on in oncology, which is great. Changes that are going on will benefit Navartis more than Glaxo.

He is significantly underweight in energy. The only integrated oil stock he owns is Total (TOT-N). In the majors, this is the only one that has a good growth profile. Their assets are growing. They’re spending a lot of time focused on reducing costs. A very sensible CapX program, which should drive fairly good free cash flow, which is ultimately what he is looking at.

(A Top Pick July 10/14. Down 56.67%.) Oil was a bad place to be, and being in China was even worse. This company does all the exploration offshore, for China. China wants to decrease their dependency on imported oil, so they will continue to spend money offshore. Trading at about 60% of its tangible book value, which is more than 2 standard deviations below its norm. It is cheaper than it was during the crisis in 2008. He can’t sell at these levels, if anything, would be adding to his holdings.

(A Top Pick July 10/14. Down 5.42%.) Had a bit of a rough time, mostly with their TaylorMade, and have to figure out what to do with that business. He wouldn’t be surprised to see them sell it. Their shoe business is doing well. Their running shoes in China are doing particularly well. Lost a little bit of market share to Nike. but have gained that back again.

(A Top Pick July 10/14. Up 11.11%.) Has been very positive on this company for a long time. A great wealth management business, on par with Merrill Lynch’s wealth management business in the US. One missing piece for them has been the lending side. Now that they have the charter to lend, they can increase and capitalize on that. This is a great avenue for them to grow revenue that they hadn’t had before. Doing very well on investment banking. The fixed income business is recovering. They are a big beneficiary of a rising interest rate environment. (Screen showed it as a loss, but Mark rightly pointed out that it was a gain.)

There are some people who are quite bullish on their prospects, particularly for the content. Just announced they are cutting the price of PlayStation by 10%, which he doesn’t think is a positive. He is not bullish on their prospects. There are better plays out there.

Prefers HSBC (HSBC-N) over this bank. This has a little more exposure to emerging markets. If you want a more diversified kind of bank, HSBC would be the one. Not particularly enthusiastic about this bank’s prospects, relative to some of the other major banks.

It gets more than 50% of its revenue from China, and is considered a China play. People are worried about the slowdown in China. He would much prefer to own Starbucks (SBUX-N) instead.

Factory automation equipment. Probably #1 or #2 in robots globally. The issue is their auto exposure. People are concerned about auto exposure. The other issue would be Apple (AAPL-Q). They have significant exposure to the iPhone, because they make the robots that manufacture the metal backing for iPhones. We are now seeing less capital expenditure going on for some of the suppliers to Apple, which has hurt them a little.

British banks, in general, are not an area that he is focused on. If he is looking at financial institutions globally, he is favouring US over countries where you are not seeing the interest rate normalization just yet. Dividend yield of 1%.

He would stay far away from this bank. On the investment banking part of their business, with fixed income, earnings are very volatile and uncertain. Trading at a significant discount to its BV for a reason, because its ROE is very low. All those uncertainties make him nervous.