Latest Stock Buy or Sell? Make More Informed Decisions!
Today, Teal Linde and John Stephenson commented about whether GPS-N, META-Q, C-N, FM-T, BKR-Q, ATZ-T, SLF-T, CJT-T, AAPL-Q, TA-T, CCO-T, HBM-T, DIS-N, TECK.B-T, HBC-T, WBA-Q, BEP.UN-T, BAM.A-T, V-N, DAL-N, ADBE-Q, CS-T, BCE-T, FTR-Q, ENB-T, BAC-N, BIP.UN-T, WMT-N, FIVE-Q, GOOG-Q, META-Q, RRX-T, BAC-N, ALA-T, WEF-T, RY-T, GM-N, HCG-T, DH-T, AD-T, EFN-T, CTSH-Q, AL-N, IFP-T, AC-T, BNS-T, BCE-T, CM-T, ATZ-T are stocks to buy or sell.
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This sold off after the election. In terms of growth rate and valuations, the revenues next year are expected to grow 16%, EPS growth of 19%, and you only have to pay 19X earnings to get that. Consumer staple stocks are trading at 20, 21, 22 times earnings, and the revenue growth is only 2%. (Analysts’ price target is $967.70.)
A stock for those who wished they had bought Dollarama (DOL-T). Dollarama is successful because it is basically moving its price point up from $1 up to $2, $3 and to $4. This company simply started selling items at $5 or less. Secondly, they cater to the teenage market. Thirdly, they only have 500 stores in the US, and want to get to 2000. They are growing at 20% on the top and bottom lines, faster than Dollarama with more runway. Trading at only 26-27 times next year’s earnings. (Analysts’ price target is $49.07.)
Market. Ironically, the election has been a pretty good thing for equities, and going forward, more importantly, it is going to be very good thing because it has really accelerated a backup in yield. There has been a huge move from about 180 to about 232 on the 10 year. There is a 100% unanimity right now in Fed fund futures, and on the 14th the market fully expects them to raise rates. That has been one of the catalysts for stock pickers, fundamentalists, investors who like to follow the stories, who really need to see the Fed getting out of the way and for the broader economy to take part. As a generalization, you want to avoid the interest rate sensitives, because they are not going to do well going forward.
A great company. The problem is, it is an enterprise that is so large that they have all the incremental shoppers, and there is nothing more that can be done. They are struggling with e-commerce. In the law of large numbers, it is hard to move the needle. Expects margins will continue to be under pressure for some time.
Just announced a $750 million equity offering, that is $1 below market price. Normally a new offering can seem to be dilutive, and you see a drop. That may be seen as a very early sign that they are able to raise such a large equity offering. A good infrastructure stock and an area you want to be in.
US financials have had a really good run of late, and he likes them. This is looking a little toppy right now, but is still trading slightly below BV. Feels that it has a couple of dollars more to run. You have a good 10% upside as a minimum in this name. Money is going to come out of some of the defensive sectors and go into these cyclicals, and the financials screen really, really well.
Although the takeover of Manitoba Tel (MBT-T) has gone on for 5 or 6 months, there is no reason to think that it will not go ahead. This is a good company. Given that he thinks there is going to be fairly fast growth in the US, you don’t want to be in things that are interest rate sensitive as the telcos are. You might be better buying a bank.
Canadian or US stocks? The US will likely grow at close to 3%. Canada will be lucky to grow at 1.5% next year. You have the Cdn$ that is likely to fall against the US$. It really depends on your timeline horizon for investing. However, in general, if you are of the view that faster growth begets faster stock price (higher revenues and higher earnings) and better multiples, with a longer time horizon of at least 6 months or perhaps a year, you would be better off to convert some of your Cdn money now, because you are likely to see a decline in the Cdn$ over time, and will get a better stock performance in the US as well as the appreciation of your Cdn$. If you are more cautious and don’t want to take that risk, you could play it through Toronto Dominion (TD-T) that has a high level of US exposure.
Copper has had an enormous run, up over 20% in the last 3 weeks or so. Thinks it has had too much of a run and doesn’t see it being sustainable. This has decent fundamentals, but he thinks copper will pull back. However, in general, you want to be in some of the material names, and he would rate Teck Resources (TCK.B-T) much higher than this company.
(A Top Pick Dec 16/15. Up 9.35%.) People know it for Acrobat the PDF maker, but they do a whole host of other products that are useful. They have Creative Cloud, and still need to migrate many of their existing clients to pay for the license for the subscription based model, which is extremely beneficial for them. They’re also focusing on reducing some of their costs. In general, this is a really strong, cloud-based solutions story.
(A Top Pick Dec 16/15. Down 5.42%.) A superior operator in terms of an airline, and it has bounced all over the map. Reduced some of his exposure, but of the legacy carriers, this is best of breed. Really good cost control. Higher margins than others. Thinks better times are ahead for the airline industry.
The selloff from the Trump election is a great entry point for anyone who has been watching the stock and looking for the time to buy. Last quarter, revenues were up 56%. Next year revenues are expected to go 35%, earnings per share 27%. For that type of growth, you typically have to pay a pretty rich multiple. Because of the selloff, it is currently trading at 23X next year’s earnings. They have room to expand. The average Facebook user in the US generates about $14 in advertising revenue per month. In Europe, it is about $5. In Asia it is $2. (Analysts’ price target is $155.10.)