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TOP PICK
TOP PICK
October 11, 2018

Trades at 9x earnings. The Aetna deal with likely be approved soon, being a vertical integration in the healthcare sector. The only question is can they integrate successfully? (2.7%Analysts' price target$88.14)

CVS Health Corp(CVS-N)
October 11, 2018

Trades at 9x earnings. The Aetna deal with likely be approved soon, being a vertical integration in the healthcare sector. The only question is can they integrate successfully? (2.7%Analysts' price target$88.14)

Paul Harris, CFA
Portfolio Manager and Partner, Avenue Investment Management
Price
$73.190
Owned
Yes
BUY
BUY
October 11, 2018

Short-seller Muddy Waters is about a specific legal case in progress. Strong franchise in Asia, but what's hurting them is their John Hancock franchise in the U.S. with a low ROE. Have a strong asset management business. MFC must deal with Hancock--can't sell it but must improve ROE. Management is slowly doing that. Now is a good buying opportunity with a good yield. Could take time.

Manulife Financial(MFC-T)
October 11, 2018

Short-seller Muddy Waters is about a specific legal case in progress. Strong franchise in Asia, but what's hurting them is their John Hancock franchise in the U.S. with a low ROE. Have a strong asset management business. MFC must deal with Hancock--can't sell it but must improve ROE. Management is slowly doing that. Now is a good buying opportunity with a good yield. Could take time.

Paul Harris, CFA
Portfolio Manager and Partner, Avenue Investment Management
Price
$20.310
Owned
Unknown
COMMENT
COMMENT
October 11, 2018

They make beautiful cars, but Musk has been inconsistent and are burning a lot of cash. Musk needs somebody who can actually run a car business. Musk is a visionary, but he needs to run a business, like Steve Jobs at Apple needed somebody. He will likely do an equity issue and dilute the stock. If Tesla keeps missing numbers, competitors will slowly catch up.

Tesla Motors Inc(TSLA-Q)
October 11, 2018

They make beautiful cars, but Musk has been inconsistent and are burning a lot of cash. Musk needs somebody who can actually run a car business. Musk is a visionary, but he needs to run a business, like Steve Jobs at Apple needed somebody. He will likely do an equity issue and dilute the stock. If Tesla keeps missing numbers, competitors will slowly catch up.

Paul Harris, CFA
Portfolio Manager and Partner, Avenue Investment Management
Price
$252.230
Owned
Unknown
COMMENT
COMMENT
October 11, 2018

A top investment bank in the world. New CEO needs to talk about the company more, but investment banks should do well in volatility. What's hurt Goldman is that its retail side if weak and are only now slowly going into that area and seeing decent growth. Beware: there's a lot of volatility in investment banking and they don't have retail to fall back on. A good brand to own.

Goldman Sachs(GS-N)
October 11, 2018

A top investment bank in the world. New CEO needs to talk about the company more, but investment banks should do well in volatility. What's hurt Goldman is that its retail side if weak and are only now slowly going into that area and seeing decent growth. Beware: there's a lot of volatility in investment banking and they don't have retail to fall back on. A good brand to own.

Paul Harris, CFA
Portfolio Manager and Partner, Avenue Investment Management
Price
$212.970
Owned
No
COMMENT
COMMENT
October 11, 2018

Stock has come off when CEO Jack Ma left. A big issue is how they grow outside China--can they do it? Valuation isn't cheap, but they are strong in China along with a growing middle class. They will do well long-term there. 

Stock has come off when CEO Jack Ma left. A big issue is how they grow outside China--can they do it? Valuation isn't cheap, but they are strong in China along with a growing middle class. They will do well long-term there. 

Paul Harris, CFA
Portfolio Manager and Partner, Avenue Investment Management
Price
$141.900
Owned
Unknown
BUY
BUY
October 11, 2018

Great company. Pharma, medical devices and consumer are their 3 divisions, which makes them unique--that diversification serves them well, unlike phrama companies depend solely on their pharma division. Has raised dividend for 54 years. Well run. 

Johnson & Johnson(JNJ-N)
October 11, 2018

Great company. Pharma, medical devices and consumer are their 3 divisions, which makes them unique--that diversification serves them well, unlike phrama companies depend solely on their pharma division. Has raised dividend for 54 years. Well run. 

Paul Harris, CFA
Portfolio Manager and Partner, Avenue Investment Management
Price
$133.840
Owned
Yes
COMMENT
COMMENT
October 11, 2018

Hard to value Netflix. They have pricing power and dominate the growing streaming sector. Good market share in the U.S. and growing share outside U.S. It's all about the content they produce, which eats up their cash flow. It'll be volatile. Young people who use Netflix share their passwords, so that's an issue. Netflix has to deal with this. But their brand is strong and the shift to streaming away from TV is definitely on their side.

Netflix Inc.(NFLX-Q)
October 11, 2018

Hard to value Netflix. They have pricing power and dominate the growing streaming sector. Good market share in the U.S. and growing share outside U.S. It's all about the content they produce, which eats up their cash flow. It'll be volatile. Young people who use Netflix share their passwords, so that's an issue. Netflix has to deal with this. But their brand is strong and the shift to streaming away from TV is definitely on their side.

Paul Harris, CFA
Portfolio Manager and Partner, Avenue Investment Management
Price
$321.100
Owned
Unknown