Latest Stock Buy or Sell? Make More Informed Decisions!
Today, The Panic-Proof Portfolio (Stockchase Research) and Christine Poole commented about whether ZTS, V, MDLZ, AQN.TO, TECK.B.TO, TRI.TO, BIP.UN.TO, WSP.TO, MG.TO, ATRL.TO, FTS.TO, BAM, GOOG, HSBC, UNH, MSFT, BEP.UN.TO, ABX.TO, T.TO, RTX, CVS, WBA, DLTH, XRX, MOS are stocks to buy or sell.
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Stockchase Research Editor: Michael O'Reilly MOS is a US manufacturer and world's largest producer of nutrients used in fertilizer for markets in North America and internationally. Recently reported revenues were up 37% and margins ballooned by 193%. It trades at 9x earnings, compared to peers at 21x. With good growth prospects its PEG ratio is just over 1.0 and it is trading at 1.3x book. It pays a small dividend that is backed by a payout ratio of 35% of cash flow. We would buy this with a stop loss at $21, looking to achieve $39.50 -- potential upside over 17%. Yield 0.89% (Analysts’ price target is $39.37)
chemicals
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Stockchase Research Editor: Michael O'Reilly XRX is the US leader in print management services, holding over 20% of the market share. Along with that success, the company has been accelerating its digital presence and automation processes, 3D printing and cleantech. Recently reported EPS of $0.47 easily beat analyst calls for $0.37. Revenues were up 22% and margins expanded, creating a jump of $198 million in free cash flow. One can only expect these to expand further as schools and businesses return post-pandemic. It trades at 17x earnings compared to peers at 40x and is trading under book value. It pays an excellent dividend, backed by a payout ratio that is under 75% of cash flow (under 45% based next year earnings expectations). We would buy this with a stop loss at $18.50, looking to achieve $30 -- upside potential over 22%. Yield 4.17% (Analysts’ price target is $53.75)
misc industrial products
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Stockchase Research Editor: Michael O'Reilly DLTH is a US based retailer of workwear through 62 outlets and a growing online platform. Recently reported revenues were up 20% over the year and margins expanded. A new CEO is onboard bringing years of experience in retail operations. It trades at 18x earnings, compared to peers at 30x and with good growth prospects, it has a PEG ratio under 1.0 -- good value. We would buy this with a stop loss at $11, looking to achieve $21 -- upside potential over 31%. Yield 0% (Analysts’ price target is $21.00)
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COMMENT
Market push and pull. Still constructive on markets, driven by corporate profits much stronger than expected. Case rates are going up, but hospitalizations aren't. Doesn't see severe lockdowns of a year ago, because the remedy of a vaccine is out there. Valuation multiples are the same as in January based on 2021 earnings. This tells her that what's driven the markets up is not multiple expansion, but corporate profits, and this is encouraging.
COMMENT
Use for corporate profits. Companies will spend. Capex is going up and quite strongly, especially in the areas that serve commodity, energy, and mining sectors. Spending on automation and the cloud. Government is also spending on infrastructure and renewables. Utilities, too, might need to expand their reach. A lot of catalysts for corporate spending. As companies get more confident, they'll loosen the purse strings. Important, as one company's spending is another company's revenue. It's all interrelated.
COMMENT
Where are we as the sectors rotate to grind the markets higher? Last month or two, back to growth stocks. Back in February, when interest rates shot up, the reopening trade was positively impacted. Now that interest rates have backed off, resurgence back to growth names, as in secular growth and not cyclical growth. You must assess the valuations you're paying. Pick your points. On a pullback, that's an opportunity for an investor to start building a position in a company they've been looking at.
HOLD
WBA has operations in the US and UK. Stays in drug retail and expands geographically. Doesn't grow quickly, but it's not an income stock either. Growth profile not attractive. She owns CVS instead, with its vertically integrated strategy.
Christine PooleOwned
specialty stores
HOLD
In attractive segments of defense. Suffered last year on commercial aerospace. Seeing a pickup in domestic travel. Transborder travel is lagging, but when it returns, it will be beneficial. Generating a lot of cashflow. Dividend is safe and may be increased over time. (Analysts’ price target is $101.00)
Christine PooleOwned
Defense
DON'T BUY
She doesn't own any gold producers. Hard to forecast gold prices. She prefers the senior producers with strong balance sheets and diversified geographically. USD continues to perform quite well. See what happens with inflation. Seeing encouraging signs that the sharp upward mood of inflation will moderate in months to come. Not necessary to own gold.
precious metals
BUY
Global scope in wind, solar, hydro. Renewable trend is not going away. Most of the renewables have pulled back, but most valuations had gotten ahead of themselves. Attractive entry point now. She's buying for new clients.
Christine PooleOwned
Utilities
HOLD
Gaining cloud market share at a rapid pace. Once a company transitions to the cloud, that contract is quite sticky, lasting for a number of years. Quite positive on their cloud business. (Analysts’ price target is $322.00)
Christine PooleOwned
computer softwareprocessing
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