COMMENT

Market. Consumer staples had been the recommended safety trade after the 2008 financial crisis and performed very well since that time. Now those same stocks are being sold off. Capital is going into stocks perceived to be more growth orientated, such as bit-coin and cannabis. Investors should not chase the latest and greatest at whatever valuation; be less emotional and think about holding it for 5-10 years.

DON'T BUY

There is a fair bit of political hair on this at the moment. He struggles with the business model. Will it be around in 10 years? He has been wrong so far, but the political issues are going to be problematic. He would stay away.

DON'T BUY

It was a great company when it went through their acquisition phase. However, about three years ago they ran out of big companies to buy. Now they have to decide if they going into other beverage markets or decide to cut costs to grow earnings. It still looks too expensive and he would stay away.

BUY

He sees them offering banks, hospitals and others outsourcing services that will grow over time. The company has performed well, but it always seems too expensive. He sees it as a buy.

BUY

The major issue is surrounding QE in the EU. It will likely take two years before interest rates will begin to rise in Europe before earnings will grow. At this point the company has done well selling off poor assets, but it will take time. He would be a buyer here. They have announced there will not be any dividend increase for a few years.

DON'T BUY

The hype around this company is disconcerting. He wonders if they will be able to execute on what they promise. At these valuations, it is not something he would recommend to clients. A company this big will have a very difficult time doubling in value. Market cap is $780 billion – bigger than the Swedish GDP.

DON'T BUY

The law of large numbers means a company of this size and valuation will struggle to double in value. There are very high expectations of future earnings growth and valuations are too expensive. This is a better trade than a buy and hold. (Analysts’ price target is $290 )

WEAK BUY

The issue is they have not recovered from issues in the US and the global 2008 financial crisis. The CEO has just been replaced. The problem is regulators have forced banks to get out of higher margins business. The Trump Administration has helped reverse some of this. If you have a multi-year hold this could be interesting.

DON'T BUY

The Chinese are attempting to build their own semi-conductor facility and they need to buy the equipment – this company is who they would buy from. This new demand has caused sales to sky-rocket. The question is, will this sales growth continue. He expects some increased competition in prices so these valuations are at their stretch point. He would prefer to buy at the bottom of the cycle rather than at the peak.

DON'T BUY

He looked at this in the past, but he thinks there are better ways to get emerging market exposure. Alternatively, you could pick an ETF or conglomerate. He would not be a buyer.

DON'T BUY

This company is an aggregator of social media for China. It is a very good business, but he struggles with the valuation being so stretched. There is not a great chance it will double in value in a reasonable amount of time. There are better opportunities to get Asian exposure like China Mobile.

BUY

This company has exposure to the refinery segment specifically in design and outsources the manufacturing. The balance sheet is very strong with only 3% debt and dividends continue to increase. This is a very high quality company. It is still relatively cheap and he would be a buyer.

DON'T BUY

The major components in developing a semi-conductor foundry are from companies like this. With the Chinese building new facilities there is enormous demand for the equipment that AMAT-O produces. The question is will the demand continue? The time to buy was 2015. This is a better trade than a long term hold. You could consider shorting it when it starts to show weakness.

BUY ON WEAKNESS

It had a pretty good year last year. The business model is now moving into a new phase. Longer term he sees it as a tax on the business community. If you want access to their service you have to pay. You have to be careful on the entry level.

COMMENT

The original owner of the company was responsible for some very good acquisitions. He continues to grow the business by acquisition. The challenge is the valuations are under tight scrutiny. He would prefer Open Text (OTEX-T).