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COMMENT
Will the valuations for big tech end in tears? Not sure of that, but we wanted to see tech take a breather and to see the rally broaden out to other sectors. Heavy lifting to year end won't be in the Shopifys. They'll be fine in the next couple of years, and you'll probably have an opportunity to pick away at them a bit lower. But when the value complex like banks and lifecos have a 10-15% move, and if you assume the economy will recover 2021-22, there's still a lot more for these value names to go.
COMMENT
Are you avoiding certain sectors? It's still a balance sheet issue. Vaccine won't be widely distributed for quite some time. Some sectors are in dire need of assistance right now, and even if they get it, balance sheets could still be worse off 6-9 months out. You could pick away a tiny bit at a Carnival Cruise Lines. But there's so much upside in names with great balance sheets, like banks, Enbridges, and Manulifes, that you really don't need to take on the extra risk to do well in this rally.
BUY ON WEAKNESS
Good stock. Models 45% revenue growth, similar to Shopify but at half the multiple. Better opportunities to buy tech as value plays are starting to work. Wouldn't buy it today, but try to buy under $50, say $48.
Technology
DON'T BUY
Still a wounded animal, though getting better. Valuation is around 7.8x. It is a levered play to oil, but you have a much better risk/reward with Arc Resources, Advantage, or Suncor. Global growth, US shale, environmental concerns are complicating factors.
oil
gas
PAST TOP PICK
(A Top Pick Dec 11/19, Down 5%) You want to buy commodities when they're forgotten about. Retail was the reason for the miss. Some investors worry it's a structural issue, but he puts it down to Covid and weather. Still likes it, but sold half his position for other industrial plays. You get paid to wait with a 14% EPS growth rate. Makes sense as long as potash can do OK and retail can get back to where they were. Yield is 4%.
agriculture
COMMENT
Time to switch from tech to value? The script for a recovery centres on financials, industrials, and cyclical tech. Tech is expensive, financials are inexpensive, with industrials in between. Lots more to go in financials and industrials. Likes Magna, Finning and Methanex in industrials. Likes banks, insurance companies and US banks. Good to see some consolidation in tech. Amazon, Tesla, and Google still make sense on price to growth, and he's waiting for those to get cheaper.
