Latest Expert Opinions

Signal
Opinion
Expert
COMMENT
COMMENT
May 1, 2017

An inexpensive technology stock. Wishes they would pay more of a dividend, simply because they have so much cash. The trouble is, a lot of earnings come from one product. That product can continue to grow, and is a very high margin product for them. Their service area is growing as well. Have a lot of cash, and they buy back a lot of shares. There is a good upgrade cycle on the phone. Their services business is additive, but not great. If they were allowed to bring their overseas cash back to the US, that would substantially help them out because they could buy back more of their shares.

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Apple (AAPL-Q)
May 1, 2017

An inexpensive technology stock. Wishes they would pay more of a dividend, simply because they have so much cash. The trouble is, a lot of earnings come from one product. That product can continue to grow, and is a very high margin product for them. Their service area is growing as well. Have a lot of cash, and they buy back a lot of shares. There is a good upgrade cycle on the phone. Their services business is additive, but not great. If they were allowed to bring their overseas cash back to the US, that would substantially help them out because they could buy back more of their shares.

PAST TOP PICK
PAST TOP PICK
May 1, 2017

(A Top Pick June 16/16. Up 20%.) A great company. QE in the US drove up a lot of purchasing going forward, which was the reason for the great participation in cars. It happened in Europe, but not to the same extent and he thinks that is going to happen. Also, people were really worried about China, but China has done quite well for them. They care about their business, the technology, and everything that goes into it. Management is happy to give up margin, because they have a view of the future, which makes a lot of sense. They don’t do things for the short term, they do things for the long-term.

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(A Top Pick June 16/16. Up 20%.) A great company. QE in the US drove up a lot of purchasing going forward, which was the reason for the great participation in cars. It happened in Europe, but not to the same extent and he thinks that is going to happen. Also, people were really worried about China, but China has done quite well for them. They care about their business, the technology, and everything that goes into it. Management is happy to give up margin, because they have a view of the future, which makes a lot of sense. They don’t do things for the short term, they do things for the long-term.

PAST TOP PICK
PAST TOP PICK
May 1, 2017

(A Top Pick June 16/16. Up 8%.) He still likes this. Putting Kraft and Heinz together they were able to cut costs, increase margins, and now it is time to start to grow the top line. Kraft is predominantly a US company where Heinz more of a global company. He would like to see them push North American Kraft products through the Heinz network, which is where there would be upside.

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(A Top Pick June 16/16. Up 8%.) He still likes this. Putting Kraft and Heinz together they were able to cut costs, increase margins, and now it is time to start to grow the top line. Kraft is predominantly a US company where Heinz more of a global company. He would like to see them push North American Kraft products through the Heinz network, which is where there would be upside.

PAST TOP PICK
PAST TOP PICK
May 1, 2017

(A Top Pick June 16/16. Up 11%.) He sold this as he expected potash prices to continue to fall because of overcapacity. Doesn’t expect the growth in potash prices that the company was expecting.

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(A Top Pick June 16/16. Up 11%.) He sold this as he expected potash prices to continue to fall because of overcapacity. Doesn’t expect the growth in potash prices that the company was expecting.

COMMENT
COMMENT
May 1, 2017

He likes this and feels there’s higher upside on the stock. They purchase auto dealerships and then centralize the back offices, cutting their cost structure down. It is the service side where they make all the money. When new management came in, they cut the dividend and the stock collapsed. He bought it at around $18-$20. He likes that their dividend is a reasonable dividend now, and they have decided they are going to only buy 1 or 2 places a year. Originally, they were geographically in Alberta and BC, which hurt them in the last several years. They are trying to diversify geographically across Canada.

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He likes this and feels there’s higher upside on the stock. They purchase auto dealerships and then centralize the back offices, cutting their cost structure down. It is the service side where they make all the money. When new management came in, they cut the dividend and the stock collapsed. He bought it at around $18-$20. He likes that their dividend is a reasonable dividend now, and they have decided they are going to only buy 1 or 2 places a year. Originally, they were geographically in Alberta and BC, which hurt them in the last several years. They are trying to diversify geographically across Canada.

COMMENT
COMMENT
May 1, 2017

Very similar to Home Capital (HCG-T) in how they run things. The issue a lot of these companies face is that they are borrowing money at a retail level, which has hurt them a fair bit. Everybody worries about the mortgages, but those are probably fine. The problem is, they have to be funded and the funding is the bad part. If somebody doesn’t trust you when you are funding things, it becomes very difficult. That is exactly what happened in the US in 2008. (CEO just stated that there was no material decline in deposits, and they have just lined up a $2 billion standby credit facility, just in case.)

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Very similar to Home Capital (HCG-T) in how they run things. The issue a lot of these companies face is that they are borrowing money at a retail level, which has hurt them a fair bit. Everybody worries about the mortgages, but those are probably fine. The problem is, they have to be funded and the funding is the bad part. If somebody doesn’t trust you when you are funding things, it becomes very difficult. That is exactly what happened in the US in 2008. (CEO just stated that there was no material decline in deposits, and they have just lined up a $2 billion standby credit facility, just in case.)

COMMENT
COMMENT
May 1, 2017

A regional US bank. US banks are certainly not expensive, and this is just trading at BV, about 15X earnings. The key to all these banks is that there will be a slightly higher yield curve, allowing them to borrow Short and lend out Longer. Certain aspects of Dodd Frank hurt regional banks more than bigger banks, and if they can make that less onerous for regional banks, that will really help them and save them a lot of cost. This bank can also grow by acquisitions, which he expects will happen. (See Top Picks.)

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A regional US bank. US banks are certainly not expensive, and this is just trading at BV, about 15X earnings. The key to all these banks is that there will be a slightly higher yield curve, allowing them to borrow Short and lend out Longer. Certain aspects of Dodd Frank hurt regional banks more than bigger banks, and if they can make that less onerous for regional banks, that will really help them and save them a lot of cost. This bank can also grow by acquisitions, which he expects will happen. (See Top Picks.)