TOP PICK
They got hit because of some production difficulties. They are big buyers of the stock. They removed their outstanding convertible debentures last week. He has a $5.50 target with no dividend. (Analysts’ price target is $2.53)
TOP PICK
It is an oil producer. $4 is his target. Debt is not a problem. They are doing the long term things that are needed to grow the business. It is a very cheap stock. (Analysts’ price target is $3.31)
COMMENT
Is the lower market downturn today concerning? Slowdown today after several weeks of nice moves and new highs. Not surprising to see the pause. The S&P is at the higher range of a 10-year valuation. Not surprising that trade issues have caused a bit of a slide in markets.
COMMENT
Retail sector results are mixed. Some doing well, and others like Home Depot are not. You have to be selective in the space. Be careful. Be more defensive like dollar stores, or off-retail, Costco. Avoid luxury brands.
COMMENT
Comfortable getting back into equities? Rotation back into cyclicals coincides with yield curve being steeper. So investors feel recession is not in the next 12 months. He feels that rotation into cyclicals is a bit of a trade. Be well diversified. Have some value, don't be all in growth. Growth has higher beta and is more volatile. He errs on the side of non-cyclical. Watch valuations, as the defensives are expensive.
COMMENT
Has your view on the energy patch changed with the new federal Liberal cabinet? Liberal government needs to be more sympathetic to the west. But at this point in the cycle, energy tends to underperform, so he doesn't have any exposure.
DON'T BUY
WFC vs. BAC A lot of banks have started to perform. Doesn't own either of these. Both have same price to book. WFC has a slightly higher dividend yield of 3.8%, whereas BAC is 2.2%. The fraudulent accounts scandal is still hurting the WFC brand. WFC revenue relies heavily on the yield curve. He prefers BAC, as they're a little more diversified with their capital markets division.
WEAK BUY
BAC vs. WFC A lot of banks have started to perform. Doesn't own either of these. Both have same price to book. WFC has a slightly higher dividend yield of 3.8%, whereas BAC is 2.2%. The fraudulent accounts scandal is still hurting the WFC brand. WFC revenue relies heavily on the yield curve. He prefers BAC, as they're a little more diversified with their capital markets division.
BUY
Likes it. Chart is running well. Well above the 200-day moving average. More service oriented. 10% growth rate. Decent name.
HOLD
Tends to do well if rates are flat or rising. Holdings are solid, Microsoft, P&G, Visa, Walmart. Equity markets are overbought, but we're also seasonally in a good spot.
BUY
One of the FANG stocks in his portfolio. Likes it. Digital advertising is a secular growth story. Broken out to new highs. Volatility, but onwards and upwards.
HOLD
Hard to say if the bulk of the worst is behind it. Be patient and look long-term. They have money set aside for the legal issues. Has a backlog. A good industrial name, but don't own a lot at this point in the cycle.
SELL
Missed sales against a slumping economic backdrop. Doesn't like the look of the chart. Below the 200-day moving average, which is not a great sign. Growth back into mid-single digits. Look at Microsoft instead.
DON'T BUY
Tobacco companies have been up and down and sideways. He's not comfortable with this space. Not expensive, but not exciting. On a technical basis, meandering sideways.
SELL
Sold out recently. Great long term, but doesn't want to be there right now. Dead money for a while. Earnings have come down quite a bit. Lots of investment in moving to 1-day Prime and getting that going. Stock hasn't done well in the last year or so. Underperforming since mid 2018.