Daily Stock Opinions and Ratings

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Today, Stan Wong commented about whether DOCU-Q, DG-N, DLTR-Q, HXQ-T, ZWB-T, NDAQ-Q, COST-Q, AC-T, ATD.B-T, MSFT-Q, CSH.UN-T, PLD-N, L-T, AAPL-Q, RTX-N, DOL-T, VHT-N, VZ-N, DG-N, RCL-N, SHOP-T, NFLX-Q, VFV-T, ZQQ-T, ZWC-T are stocks to buy or sell.

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COMMENT

Not surprised with today's selling after a rip-roaring move from March's bottom. A bit of a consolidation is inevitable. He likes the travel and leisure space as long as you hold defence as well. He still likes tech, because tech will remain important in a low-contact world. Also likes select consumer staples stocks. The market is technically overbought, based on the relative-strength index which is high around 70. He doesn't expect a return to the mid-March trough given rapid progress in Covid treatments and vaccines, while May job numbers indicate we are in the recovery phase. The market may pause, but not plunge back.

COMMENT

ZWC vs. ZWB Both offer additional income through covered calls. ZWC yields 8.4% plus the dividend and premium from the covered call strategy. ZWB (Canadian banks) pays 6.5%. Both you pay 72 basis points in MER. ZWC is more diverse with banks, pipelines and telecoms so he prefers ZWC. Warning: long-term, covered calls can lag the underlying securities if there's a bull market in those securities. In an up market, he prefers the stocks themselves or other ETFs.

COMMENT

A Canadian tech ETF better than ZQQ? ZQQ is CAD-hedged, so where do you think the CAD will move? HXQ is similar to ZQQ, but a cheaper MER at 0.28%. ZQQ has no hedge to CAD. He prefers HXQ, because it's cheaper and unhedged.

WAIT

It mirrors the S&P 500, which has recently exploded. This ETF is close to its high. He feels the markets are a little overbought now, so wait till things calm, or right now buy a partial position. Warning: there could be a second wave and the US election is coming.

DON'T BUY

Obviously it's benefited from people staying at home. Their valuation has always been an issue for him, but they are attracting a lot of subscribers. Buy they face a lot of competition from Disney, Apple, etc. It's trading at the 50-day moving average. He'd consider that at the 200-day average.

DON'T BUY

Valuation is a problem for him. 2372x is their foward PE at a 46% growth rate. Shopify caters to small/medium businesses, which are most vulnerable to a second wave.

BUY

The cruiselines have really roared back. RCL is the biggest and has the best balance sheet among the big three cruiselines. Down the road, we'll be back on cruises and revenues will return. He likes this business and it will survive. But don't buy 30% of travel, but rather 5-15%. RCL is a quality name because of its balance sheet and large market cap vs. its peers. Also, 2021 bookings are higher than pre-2019 levels.

PAST TOP PICK

(A Top Pick May 22/19, Up 53%) DG has great locations away from big competitors in rural areas. About 75% of Americans live within 5 miles of their stores. Low beta at 0.7x vs. the S&P. Highly defensive. 80% of the goods they sell are consumables. It's a very defensive name.

PAST TOP PICK

(A Top Pick May 22/19, Up 2%) A cash flow, dividend name that pays 4.25%. Low beta. Their wireless segment continues to thrive with the largest customer base in the US. $18 billion in free cash flow. A boring, but steady and defensive name.

PAST TOP PICK

(A Top Pick May 22/19, Up 19%) Charges only 10 points. Holds Pfizer, Merck and other big pharma, totaling 40% of this ETF. A low-beta, defensive stock in the health sector, as sector that will continue to attract capital.

BUY

DOL vs Dollar Tree vs. Dollar General He likes Dollar General for its location and execution. Doesn't like Dollar Tree because their locations are urban centres where there's too much competition. He prefers Dollarama over Dollar General, but likes DOL, but many DOL stores are inside malls, which is a problem now (malls are closed). He prefers DOL to Dollar Tree because they execute better; and Dollar General over Dollar Tree.

DON'T BUY

Performance is flat and is declining vs. the S&P, which are flags. If the economy really ramps up, these industrial stocks will do well, but he doesn't own this space. He prefers healthcare. A lot depends on the November vote and the kind of military spending Washington will plan. RTX is starting to approach its 200-day moving average, but that could be a ceiling.

DON'T BUY

It's trading at 26x forward earnings at an 11% growth rate, but they get help being in index funds. Long-term, he's concerned that 60% of revenues come from iPhone sales. Apple is a margin business, growing earnings by 9%. Other U.S. tech names are stronger, but you can't deny Apple's performance. They enjoy strong margins, but when will consumers say, "I won't pay $800 for a phone." That concerns him.

DON'T BUY

Are grocers safe? Yes, during this stay at home phase. Loblaw trades at 16x forward PE with a 7% growth rate. It's low beta at half the volatility of the TSX. Q2 will probably be good in terms of revenues. But he's concerned with their private label segment has required a lot of investment. Also, Loblaw is highly unionized and faces wage pressure. He prefers Metro a bit for its better valuation.

BUY

Commercial property REITS' outlook Careful with them, like Allied Properties REIT. He prefers the logistics REITS like PLD-N. No one knows what things will be like. Some retail REITs are rebounding. Some REITs are a trade. But office and commercial REITs are hard to forecast; he owns none.

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