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He likes this a lot, although it is not necessarily cheap. Had bought this when it was still private. What is going is very, very positive. They allow small manufacturing and other service organizations to become, in a sense, a part of the Amazon network, which is a huge advantage, and are growing very, very rapidly because of that. He remains bullish and positive on the stock, although he has been taking some profits.
This has been in the doldrums for quite a while, but that is because it is trading hard up against its own FMV, which really hasn’t been going anywhere for some time. This is a company that is worth an awful lot more dead than alive. If somebody would take over that company and split it into its constituent pieces, he feels you would see an enormous amount of value released into the market.
He likes this quite a bit. The stock recently broke out over one of his key technical breakpoints, and looks to have a pretty good count. The minimum count he would see would be something in the order of 19 ($?), but FMV actually shows quite a bit higher. The issue is what is going to happen to interest rates. If rates are going to go up, this will benefit all the US banks. (This was almost one of his Top Picks today.)
At the present time this is trading just about smack on its intrinsic value, which he calculates to be at about $200. It is also trading at one of his technical resistant points. Putting them together, he doesn’t see that much upside potential. Earnings forecasts have flattened right out, so there is no momentum coming from the earnings side. Also, it is technically expensive, and he doesn’t like it.
Thinks the same thing about this as he does about most Canadian utility stocks. Have gotten fairly expensive because people are seeking yield. Recently the stock has been setting back. It still has about a 23% upside potential, so it could bounce back to about 2X Book, which has been the peak of the stock price for the last 3 years. This has a decent yield and he doesn’t think there is anything to be panicky about. Not badly priced.
A real toughie. It has lost a tremendous amount. Looking at the earnings that analysts are projecting, he would probably say it has a 200% upside, which makes it look pretty interesting. The issue is, what is going to happen when they undergo some of those US hearings they have been threatened with? Are they going to escape, or are there going to be massive penalties? The balance sheet is nothing to write home about, as it is full of goodwill. No matter how attractive these companies are, he generally avoids them. They are too risky for his blood.
(A Top Pick Oct 20/15. Up 64.43%.) He chose this one because it had a good quality balance sheet. It is a junior miner and therefore had lots and lots of leverage against the price of gold, which he had been expecting to go higher. Also, felt the company was working hard at reducing costs and that earnings would start to surge up. It is still quite cheap, trading a little above its BV.
(A Top Pick Oct 20/15. Down 23.44%.) It had been down more than that until last week when there was talk about a merger with a British company. This company has done all the right things. They’ve gone into the US, and spent a lot of time going through the New Jersey gaming commission to get approval for online gaming in New Jersey. New Jersey has saved all the other states from going through the same process, so he is waiting for more states to come on stream. The more they do, the higher this stock will go. Long-term, this is an interesting company.
On the face of things, this is really cheap, and also has a very nice dividend yield. Furthermore, the dividend is decently covered with its earnings. This is an increasingly tough space, getting shows into and accepted into mainstream and very popular media. The earnings forecasts have been pretty steadily falling. FMV is still more than 100% higher than the current stock price. The question is, have the analysts kept up with the reality. If they have, then this is a very promising stock with a lovely yield. It is currently trading at around BV and has a pretty decent balance sheet. It looks like a fairly decent investment. Dividend yield of 9.5%.
The issue is that the stock price is very high relative to its FMV. Not that it is horribly overpriced the way some companies are, but a lot of the great move now is behind it. He holds this one pretty much across the board, but it is one of those companies that he keeps cutting back on so that he doesn’t get grossly exposed to very high priced stocks in weak markets.
The stock in Price to Book is very, very expensive. Trading at about 20X Book. The stock, a little while ago, got up to its FMV, but recently on expectations of much improved earnings, the earnings forecasts have really shot up. Analysts have more than 100% upside for the stock. It also has a sweet yield. The dividend is well covered.
This came down from 8X BV to almost a discount to Book, and then roared all the way back to 8X BV again and then fell back to 2X. It is all over the map. He still doesn’t see any earnings coming through, which makes the calculation of FMV very problematic. He would call this speculative, and wouldn’t be the kind of stock he would buy or recommend.
Market. When looking at the biggest, most popular companies, their valuations and their historical valuation ranges, he is finding that a huge number of them are suffering a disconnect, well above traditional levels, and therefore offering a lot of downside risks. The last time he saw something like this, was at the top of the market in 2000, the height of the high-tech boom, followed by the bust. We are at the precipice now, but what stops you from jumping right out and saying you have to sell everything and run for the hills is the Fed. The Fed has said they are going to do whatever is necessary to keep the market up, in particular focusing on those kinds of companies that keep people having that feeling of wealth. The Fed might be prepared to go out there and Buy those kinds of stocks to help support them in the market, just as the Japanese have done. That borders on insanity. The Fed is not infallible in fighting off these kinds of things. They were not successful in 2000 or in 2008-2009.