Latest Stock Buy or Sell? Make More Informed Decisions!

This has taken a big tumble. A couple of months ago they announced the loss of a big client. This is the problem with high risk stocks. When you buy a very high valuation company that really has only one major product line, it can correct very severely because of something happening. The stock needs to be much lower before it would be attractive to him.

What US bank do you prefer? Under Obama, the banks that made sense were the regional banks, because the regulatory glare was very onerous. Under Trump, that has kind of softened, and we are under a rising interest rate environment. Some of the US money centred banks make sense. He owns the BB&T (BBT-N) on the regional side. He also owns Bank of America (BAC-N) which just announced very good results.

Just looked at the results fairly recently in Cdn$ terms, and there is just no rhyme nor reason with what is going on. Some years it is huge profitability and other years it is big losses. He can get no fundamental comfort in terms of its performance. It has good cash reserves, so the dividend is probably safe.

Thinks it has a discount from BREXIT on it, but is very exposed to Asia, which is a real growth driver. Its key market is based in Hong Kong, which is pegged to the US$, giving US leverage on the interest rate rise. It has a China credit card business, which is new, because China is a closed credit card market. Has a very attractive dividend. It will benefit from rising interest rates as Net Interest Margin, a critical driver of buying profitability, will need to rise by 70% to reach pre- crisis levels. (Analysts’ price target is $41.22.)

An IT outsourcing company. When Mr. Trump got into power, the first thing he did was to bash all the foreigners, and a lot of the stocks, plus some of the tech stocks, were heavily reliant on this sector. Historically, it has had a very, very strong record of growing earnings something like 20% for 15 years. Very, very strong balance sheet. On Nov 1, they come into a $2 billion share buyback. Dividend yield of 2.7%. (Analysts’ price target is $15.50.)

A global elevator company. The dividend has risen substantially. In the last couple of years, it has been relatively dead money, but now we are starting to see an expansion of the global economy, so he expects it to start to move again. Cash reserves exceed all liabilities by a considerable margin. A good growth stock on urbanization. Countries like China and India need more elevators, and this company has the market share in both countries. Dividend yield of 3.4%. (Analysts’ price target is €44.00.)

Market.He is concerned about high valuations. It’s hard to go against the tape which is really strong and good. He is more of a bottom-up and goes stock by stock by stock, which is just harder and harder and harder to find. We have to start worrying about being priced to perfection. If something comes down the road that isn’t quite as rosy and shiny as we would like, there could be pullbacks of 5%-10%, or even worse. If interest rates rise, we could see a substantial pullback, but there has been a reluctance to raise interest rates. There are also the things we don’t know about. For example, the Greek sovereign debt problem. Would that have been predicted to have as much effect as it did?

This is a really great company. There are lots of companies with stretched valuations, and this is one of them. It looks too rich, as well as having a bit of problem with ESPN. His charts show him an improving ROC, which has been improving for about 8 years. Unfortunately, the stock has also improved for about 8 years. What if returns start to slide a little.

Great company. They are improving their return on capital. Have done everything you could possibly want them to do as a company. However, there is a runaway stock price. If you own it, Hold and look for a better exit.

This has certainly had its good days. It’s been quite a good company for many years. He likes the medical technology space.

A good, high quality company. You get a little bit of dividend while you wait. It is certainly not in the best of times at the moment. However, it looks like it is coming out of a bottom on its fundamentals. He sees ROC declining for about 5-6 years, but in the last couple of quarters it has started to rebound from -1% to +1%, which is a great sign. It’s not that expensive.

He really likes this but can’t get there on valuation. A good operator and they’ve done a lot of good things. Earns a decent rate of return for a pipeline company, but is slightly higher than some of their counterparts. It is just out of the range of valuation that he would be willing to pay, around $20.

By any stretch of the imagination, this is still a speculative stock. They’ve invested about $900 million, but valuation is $9 billion. Yet they haven’t earned any money and are still negative EBITDA. A game changer with a really great technology and can be widely used by many businesses. Has a good overall business model.

Has always had a low ROC, and is actually getting a little worse. Uranium prices are pretty close to their low as well. Dividend yield of 3.6%.

(A Top Pick July 24/17. Up 15%.) 64% of revenue comes from copper. There is some zinc in there as well. They are in pretty good locations as far as geopolitical risks go. He liked that they had an improving Return on Capital (ROC).