Latest Expert Opinions

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Opinion
Expert
DON'T BUY
DON'T BUY
January 30, 2018

He doesn't like this one. The dividend is secure. It’s a massive behemoth bank, but has been struggling to drive earnings growth for years. There's been no organic growth. They may have to make an acquisition, but acquisitions are not cheap these days. If you want to own banks, you are better off owning Goldman Sachs (GS-N) or Morgan Stanley (MA-N). There are better investments elsewhere.

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He doesn't like this one. The dividend is secure. It’s a massive behemoth bank, but has been struggling to drive earnings growth for years. There's been no organic growth. They may have to make an acquisition, but acquisitions are not cheap these days. If you want to own banks, you are better off owning Goldman Sachs (GS-N) or Morgan Stanley (MA-N). There are better investments elsewhere.

COMMENT
COMMENT
January 30, 2018

How do you analyse value when there is so much debt? He doesn’t like buying companies with too much debt. With this company, and a number of other companies like it, you have to separate the debt. There are 2 kinds of debt in this. A large chunk of it is related to financing customers who are buying their products. Like many, many companies, a large part of the debt is profitable debt where they make a spread when selling equipment. He calls this the financing debt, which is a profitable debt for them. Xerox is an investment company and their real debt is not actually that great, which is why it has an investment grade balance sheet. This is why you have to dig behind the numbers and look at the notes in the financial statements. He likes this stock. They are back to growth mode again, earnings have started to grow and free cash flow is growing. Companies have found they need document management, and even on the printing side the move to colour printing means they are making a ton of money on expensive ink cartridges.

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Xerox (XRX-N)
January 30, 2018

How do you analyse value when there is so much debt? He doesn’t like buying companies with too much debt. With this company, and a number of other companies like it, you have to separate the debt. There are 2 kinds of debt in this. A large chunk of it is related to financing customers who are buying their products. Like many, many companies, a large part of the debt is profitable debt where they make a spread when selling equipment. He calls this the financing debt, which is a profitable debt for them. Xerox is an investment company and their real debt is not actually that great, which is why it has an investment grade balance sheet. This is why you have to dig behind the numbers and look at the notes in the financial statements. He likes this stock. They are back to growth mode again, earnings have started to grow and free cash flow is growing. Companies have found they need document management, and even on the printing side the move to colour printing means they are making a ton of money on expensive ink cartridges.

COMMENT
COMMENT
January 30, 2018

Not a huge fan of telecom companies globally. However, their dividends are sustainable, so he wouldn't be worried about a dividend cut in the future. However, this has been a zero-growth company, and will probably remain so. They are into cost cutting that will fuel marginal earnings growth, but it is not attractive to him. Rising interest rates will mean these kinds of companies will be negatively affected.

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Vodafone Group PLC (VOD-Q)
January 30, 2018

Not a huge fan of telecom companies globally. However, their dividends are sustainable, so he wouldn't be worried about a dividend cut in the future. However, this has been a zero-growth company, and will probably remain so. They are into cost cutting that will fuel marginal earnings growth, but it is not attractive to him. Rising interest rates will mean these kinds of companies will be negatively affected.

COMMENT
COMMENT
January 30, 2018

A brilliantly run incredible company and massively successful. He is not buying this, because infrastructure type companies are susceptible to rising interest rates. This is such a creative outfit, that if rates keep going up and there is more downside, he might become interested.

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A brilliantly run incredible company and massively successful. He is not buying this, because infrastructure type companies are susceptible to rising interest rates. This is such a creative outfit, that if rates keep going up and there is more downside, he might become interested.

SELL
SELL
January 30, 2018

If he owned this, he would Sell. He can see more downside, as people have been buying these as dividend plays. They are low-growth or no-growth companies that are struggling as the world evolves in their very difficult sector. There are better places to put your money.

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If he owned this, he would Sell. He can see more downside, as people have been buying these as dividend plays. They are low-growth or no-growth companies that are struggling as the world evolves in their very difficult sector. There are better places to put your money.

BUY
BUY
January 30, 2018

This has morphed itself from making radios, etc. into being a global leader in medical technology. If you go into a hospital room, you will their equipment all over the place. They’ve done a fantastic job after a lengthy restructuring. It pays a dividend, and there should be some dividend growth following earnings growth. He is looking for double digit earnings growth. He still sees upside in this.

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This has morphed itself from making radios, etc. into being a global leader in medical technology. If you go into a hospital room, you will their equipment all over the place. They’ve done a fantastic job after a lengthy restructuring. It pays a dividend, and there should be some dividend growth following earnings growth. He is looking for double digit earnings growth. He still sees upside in this.

PAST TOP PICK
PAST TOP PICK
January 30, 2018

(A Top Pick Nov 24/16. Up 55.95%.) The Japanese market remains compellingly cheap. This one is a global business that makes manufacturing equipment for the auto sector and others. There are thousands of great Japanese companies that you never hear about, because they are either making electrical components that are inside all kinds of different devices, or they make manufacturing equipment.

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Aida Engineering (6118-JP)
January 30, 2018

(A Top Pick Nov 24/16. Up 55.95%.) The Japanese market remains compellingly cheap. This one is a global business that makes manufacturing equipment for the auto sector and others. There are thousands of great Japanese companies that you never hear about, because they are either making electrical components that are inside all kinds of different devices, or they make manufacturing equipment.