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He decided his firm's best bet was to position themselves in the area that had the most damage in '08/'09 so their multiples were a lot less than the senior players. Over time he felt there would be a journey of forgiveness – they would earn it from the markets. This is exactly what has happened. It is still trading below book value.
The CEO has a pretty big hammer in terms of the voting shares. He generally likes chairman of the board and chief operating officer to be separate. He generally votes against a combined role. TSLA-Q is a fabulous technology but you have to ask how much of the future expectation for this company is already priced into this stock.
(A Top Pick Jun. 21'17, Down 14%) It is an interesting space. They are seeing a changing dynamic in healthcare. They are acquiring another company. Their vision is to control the patient experience. They want to provide more health care than just filling a prescription. Most healthcare service is the monitoring of chronic conditions. They should bring healthcare costs down. This is an area where the market has not rewarded them.
(A Top Pick Jun. 21'17, Down 7%) It is going to benefit from the growing need for housing and renovation around the world. We are still not satisfying population growth in the US. 8-9 times earnings. There is lots of opportunity as the housing market develops. The housing cycle is not coming to an end.
They took over Pringles last year. This whole space has been extremely challenged. They struggle to grow and particularly in the cereal space. They are having trouble because people's' preferences have changed. There are higher raw materials costs. We are moving away from snacks as well as cereals. Some of these tried to attract investors with high returns of capital. In fact they are just giving back your own capital and not producing enough to cover these big dividends. We should see it 12% lower next year.
It has really reinvented itself. It was THE growth company through the late '80s and through the 90's. They were assigned a generous multiple and they were a big winner in that period. They are number 2 in the cloud. It is a huge growing area and the market has fallen back in love with them as they are now a growth story again. It is a bit of a 'Show Me' story. There is a lot of choice in technology.
It is a very well run company. Pharma, medical supply and personal goods businesses. The pharma business is doing well. They have a number of drugs. Brands are not as valued by millennials as by their predecessors. This is the struggle that JNJ-N is having. They have a strong balance sheet and a nice dividend.
It has been in the news a lot. They own technology that is a cure for Hep-C. There is a lot of controversy as they are expensive and a cure costs about $90,000. Lobby groups have negotiated better pricing. It has had huge cash flow and great earnings but is falling dramatically.
Market. A minority government in Ontario would cause problems for policy change. Over the last couple of years the polls have only been predictable in that they have predicted the opposite of what happens. We have seen a completely different market coming off the February lows. It is led by very few growth companies. Every 8 to 10 years you have to take a stand on what you like and not buy what is being rewarded at the moment. This is when money managers earn their money. If you become more and more concentrated as the market does, then you take on a lot more risk.