PARTIAL SELL
A little more expensive than WFG and less ROE. Has had quite a good run but would stick to WFG or Interfor. Would sell this for other larger players.
HOLD
Should hold even though it has run up quite far. Lumber prices are astronomical, up 50% in the last quarter. Not a lot of factors that would stop or slow this. Home building is off the charts. New capacity is difficult due to covid. Will have excess cashflow. Not expensive at 4x enterprise value, 6x cashflow and 30% ROE. Still has more legs.
BUY
Has been a long suffering value stock. Tech 1.0. Has been surprised by other faster growth tech companies. Fits in the value bucket. One of the top cheapest stocks in the S&P 500. Strong ROE at 25%, 8x enterprise value, 14x price to earnings. Balance sheet is clean. Small yield with good payout ratio. Starting to see activists pushing changes in the company. Will add more if the price momentum continues.
DON'T BUY
Pretty good valuation characteristics. Trades at 8x price to free cashflow. Net debt is fine. Recently completed an acquisition. Problem is that gold does better during deflation rather than inflation. We have seen some sell offs in the sector. Poorer price momentum.
SHORT
An industrial sector stock that does well in this type of environment. Has been a volatile stock with negative ROE. Cashflow is poor too. Interest coverage is not good. Yield is there but payout ratio is high.
DON'T BUY
A chip maker, more on graphics card side. Bitcoin mining is also a big source of revenue for them. Doesn't hold it but price momentum and valuation is pretty okay. Expensive on price to earning but it is high quality. Has flatlined though like with other growthier companies.
PARTIAL BUY
Price momentum and valuation has not lined up. It is a low volatility stock with good yield. Almost a bond replacement from the stable and reasonably priced business. Not the cheapest on EBITDA, cashflow or book value. Solid balance sheet.
DON'T BUY
Has had a great run. It was put to the test in the last 6 weeks. Markets are less keen on paying for these high priced companies, especially when growth is not as scarce. Scores well on price momentum, but terribly for valuation and volatility. Negative ROE and no earnings. Debt is not a problem, but it is the willingness of the market to pay higher multiples that is the problem. Maybe it will grow into their valuation. In the mid-term there are better opportunities at more reasonable prices.
HOLD
Very high quality with no issues on the balance sheet. Own it for its yield at 6.1% with a reasonable payout ratio. Low volatility. A bond replacement. Hold for the yield.
BUY

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. At 12x earnings, it is very cheap. A good risk-reward play. The dividend is growing fast and good growth is expected at 17% EPS growth for this year. 1B in cash and a very strong balance sheet. It has better margins than AEM. Unlock Premium - Try 5i Free

BUY

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. There is good potential upside in the short term considering size and strong growth prior to the pandemic. It also has higher risk though. Cheap on valuation and has made good acquisitions. Unlock Premium - Try 5i Free

BUY

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. Q4 revenues were 6% better than estimates. EPS was short by 23% at $0.20. Sales are set to grow at a nice rate but debt is quite high at 2x cash flow. Remains cheap at 8x earnings. They will be buying back stocks. It could grow its valuation to 10 to 11x. Unlock Premium - Try 5i Free

COMMENT

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. Industrial and consumer discretionary could be sectors that will see good growth. Tech also remains attractive. International stocks are cheaper currently as well. Unlock Premium - Try 5i Free