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Stayed away from this because of the balance sheet. They ran into issues with their covenants. On the debt side they borrowed a significant amount of money to buy Octavis’ generic business. The income was less than expected because of deterioration in the pricing of generic drugs. About half the company’s operating profit was coming from Copaxone for MS, and the competition was able to invalidate the patent on the 3X a week dosage, and was able to take some share.

In the consumer staple sector. There is a reduction in barriers to entry within packaged foods. He would rather be in flavouring companies, such as Fruteron (?).

Doesn’t own any Spanish banks and doesn’t know why anyone would. The Spanish market has a tremendous amount of overcapacity. Spanish lenders say that the origination spreads on new loan production just keeps on compressing, which tells him there is absolutely no point in being involved.

Doesn’t own any Spanish banks and doesn’t know why anyone would. The Spanish market has a tremendous amount of overcapacity. Spanish lenders say that the origination spreads on new loan production just keeps on compressing, which tells him there is absolutely no point in being involved.

Take some profits?A producer of pneumatic and hydraulic fittings. They compete with other global players. With the recent turnaround in construction equipment and the continued strong performance of the semiconductor industry, he thinks this continues to be well positioned.

(A Top Pick Nov 23/16. Up 33%.) Manufactures hydraulic and pneumatic equipment. He found a better idea, so sold his holdings.

(A Top Pick Nov 23/16. Up 42%.) An air-conditioning/ventilation company. They produce intelligent building controls, and thinks they are the leader. These are devices that open and close valves or dampers. They invented the directly connected actuators, which are field programmable. This company is family controlled and has no debt.

(A Top Pick Nov 23/16. Up 74%.) Their largest line of business is leak detectors. There is a 50% probability that whoever services your air conditioner, uses their leak detector. Has a very significant segment in process control for vacuum processes, where semiconductors would be the largest application. Have a smaller segment in environmental systems, which are products for detecting things like gas leaks. Their largest customer in their business is the US Department of Defense for a product called Hapsite, which is used to detect chemical weapons.

Makes electronic test equipment. This is Hewlett-Packard, but without the printers, medical equipment or computers. It’s the business Hewlett-Packard founded in their garage back in the 1930s, which really invented the whole category of electronic tests. This is a good opportunity and timely because 5G wireless is coming. If you want to develop and deploy 5G wireless, you need to deal with one of a small group of companies, Tektronix, Roddy and Schwartz and Ritzy (?), but he likes Keysight the best. They have a significant defence segment, and thinks it can be a higher component of their revenues. They are better at detecting RF (radio frequency) emissions than anyone else, and have their own semiconductor foundry where they make the chips. (Analysts’ price target is $50.)

The world’s low-cost producer of eyeglass lenses. They make them in Thailand and the Philippines. Also, one of the largest producers of endoscopes. Minimally invasive is where medicine is going. Had a business that was flat that was making hard disk platters. When you make them out of glass, you can put more into the casing, which increases capacity. They also make photo masks. (Analysts’ price target is ¥6289.)

They are in several segments, and their larger segment is in natural food colours. Believes they are the largest in the world. Also growing nicely in pigments used in cosmetics and printing. This is not printing on paper, but printing on textiles. Dividend yield of 1.7%. (Analysts’ price target is $85.65.)

Doesn’t think this is a good time to be getting into this. Sold his holdings 2 or 3 years ago because everybody thought the Marvel movies were an absolute layup, but as it turns out nothing is assured in this business. Also thinks people are dropping ESPN. There has also been a tremendous growth of online.

Also likes Northrop Grumman and Raytheon, but would be careful about doing too much. In the case of Raytheon, part of the moat is that they have their own semiconductor foundry, which has allowed them to win share within radars. If they have a chip no one else has, that extends the power, range and reliability of radar. In the case of Northrop, so much of the backlog became classified that they were forced to classify the entire backlog. This is helpful, because classified backlog is the best thing to look for, for future growth. It is very well positioned in space. The Minuteman missiles are quite old and are going to be modernized.

A fine company. As he went through the process of deciding between this and MasterCard (MC-N), he chose this one because they owned a company that provides fast HCH services, which allow payment processors to verify whether or not a check or electronic debit is good or NSF, and whether or not to process it. Feels MasterCard is a little more future proof because if payments move off of its network, they would participate in other kinds of payment processes. However, it is likely to perform very similarly to Visa.