Today, Frank Holmes and Stan Wong commented about whether VHF-N, CELG-Q, MFC-T, KO-N, PFE-N, SLF-T, META-Q, PM-N, DOL-T, XUT-T, KHC-Q, WPM-T, GILD-Q, WBA-Q, PANW-N, CGX-T, QCOM-Q, MG-T, L-T, BAC-N, NOC-N, VGG-T, ZEB-T, NFLX-Q, CR-T, FNV-T, WIR.UN-T, GOOG-Q, G-T, VMC-N, MRZ-X, S-N, BAR-T, HD-N, GS-N, RTX-N, WFC-N, BAC-N, WBA-Q, CVS-N, BPY.UN-T, RGLD-Q are stocks to buy or sell.
Market. This has been an eventful week. It seems as though investors have really looked to the pro-growth side of things, and have become more optimistic about president elect Trump focusing more on initiatives, such as corporate tax reform, infrastructure spending and deregulation, and less on immigration and trade reform. In the near term, things have gotten a little ahead of themselves. We have seen a major rotation of the defensive type of areas, yielding oriented type of equity stocks, into the more cyclical areas. Feels we are a little ahead of ourselves. His focus is more on financials, industrials and parts of the healthcare sector, and even the energy side. Those are the beneficiaries under a Trump Administration. Would probably be a little underweight in the areas of consumer staples, telecoms and real estate. He sold into the “Trump bump rally” taking some profits a couple of days ago, mainly of financials, which are technically overbought at this point. He is about 15%-20% cash at this point.
This is pricey in terms of a PE multiple, trading at nearly 300X on a forward earnings basis. However, they’ve got great growth and exciting things are happening with them. Doing very well going to the international market, not so much in China. They are going to reach about 92 million subscribers internationally. Their costs are swelling, because they have to get a lot of original content, which is going to be a headwind for them. He views this as more of a trading stock than anything.
Holds a basket of “dividend growing” names and we are in a rising interest rate environment. Believes there is going to be a shift from money invested in just high dividend paying stocks, and into dividend growers. This hit a brand-new high today. You might want to watch to see where the markets lead in the next few weeks, because we have had a bit of a run and the market is approaching overbought areas.
From the perspective of what has happened with Trump in the election, there has been a commitment to the industrial space and the defence space. He likes the name for that and would consider it. The stock is not overbought now; it is in the 70.5 RSI, but would probably let it calm down a bit and get back into the $230-$245 range.
In the consumer staples space in Canada and the US, we are seeing some weakness. He sees money moving from defensive types of names into more cyclicals. The company had some very good earnings earlier this week, and the stock has moved up towards its 200-day moving average, but if you look at how the stock has performed over the last year, that moving average has really been flat, a bit of a warning sign. Trading at about 17X earnings with not that high of a growth rate.
Great management. It is one of those very undervalued stocks. He would buy here.