Latest Stock Buy or Sell? Make More Informed Decisions!
Today, Gordon Reid and Lorne Steinberg commented about whether DOW, 7951.HK, BNS.TO, XRX, NVS, NTR.TO, GBTC, V, GLW, BBD.B.TO, HSBC, 6804.T, RDS.A, MS, BABA, VOD, CSCO, BB.TO, ALL, F, DEO, WMT, DIS, CB, PM, GOOG, DNKN, QCOM, NWL, HON, BKNG, ANTM, MSFT, FDX, DY, TPC, GLD, GDX, SBUX are stocks to buy or sell.
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BUY
Bought at $1155, now what? He holds this himself. It is in the sights of the government for security issues. Being big can sometimes put a target on you. Is it bad that a big company creates the best search engine? The long term outlook is very bright with many upcoming initiatives that will contribute to the bottom line. Autonomous driving and other new technology will become mainstream in the next 5-10 years. He would continue to hold it and add to current positions.
Gordon ReidOwned
Technology
TOP PICK
A specialty insurer. They hold pricing power now and he expects that to continue for a few years. They implented good cost monitoring measures.
It trades at 1.3 times book -- quite reasonable. Well managed. Yield 2.00% (Analysts’ price target is $152.44)
Gordon ReidOwned
insurance
TOP PICK
They are much cheaper than Netflix -- only 16 times earnings. Price is pausing, but longer term it has a great future following the 21st Century acquisition. They own Hulu as well. Yield 1.26% (Analysts’ price target is $149.28)
Gordon ReidOwned
entertainment services
TOP PICK
The latest study shows they are competing well with Amazon on groceries. They have made major investments internationally and will soon be recognized by the market. Yield 1.92% (Analysts’ price target is $110.93)
Gordon ReidOwned
department stores
COMMENT
It's a tough market because corporate earnings are declining, the global markets is softening, yet valuations keep rising. American stocks are diverging from Europe and Japan. Buying the market won't be a good idea with valuations at this level. No doubt that lowering interest rates are driving markets now, but 10-year yields are already down to 2%. Ultimately, you need earnings growth to drive stock prices. The high-yield bond market yields 6% and is in great shape, but to succeed here you need wide diversity across America, so best to use a fund. In contrast Canada is susceptible to commodity bonds and therefore higher delinquency.
BUY
Allstate invests in bonds.Can Allstate make money investing in the premiums? And, is PE or PB a better metric to value insurance companies? Every insurance invests heavily in bonds. The price of bond yields is built into the price of insurance premiums; all baked in. Note that property and casualty insurance is re-priced each year, so PC can absorb losses in bonds. Secondly, Allstate is very disciplined and has enjoying 10% dividend growth in recent years. PB, Allstate isn't expensive at 14x PE and 1.5x PB, which are both key metrics. They are best in class.
Lorne SteinbergOwned
insurance
BUY ON WEAKNESS
He's owned this for a decade, not as cheap as it used to be now that it's a Wall St. darling. After years of flat revenues, revenues are accelerating. The software part generates recurring revenues, and that has zoomed. Earnings will grow 10% annually. They buy back stock and increase their dividend. But it's trading near its all-time high.
Lorne SteinbergOwned
electricalelectronic
DON'T BUY
Upcoming share splits and will list in Hong Kong Share splits have no influence, but listing in Hong Kong will make it easier for investors to access the stock. Also, BABA faces more competition. The stock is not cheap. Further, Chinese growth continues to decelerate. And who knows about these U.S. tariffs?
PAST TOP PICK
(A Top Pick May 07/18, Down 16%) Global banks have been hit hard by an inverted yield curve and lower interest rates, but MS is cheap at 9x earnings. He expects double-digit growth ahead. They're raising their dividend and buying back shares. MS is the largest wealth manager in America. Boasts a PE below 10x.
Lorne SteinbergOwned
investment companiesfunds
PAST TOP PICK
(A Top Pick May 07/18, Down 1%) They benefit from higher oil prices right now. Pays a solid yield of 5.5%. Cash flows are growing. Surprisingly, RDS is one of the largest investors in renewable energy which will well-position them in the decades to come.
Lorne SteinbergOwned
integrated oils
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