COMMENT
Markets. Reflationary environment since last October/November. There will be fits and starts, but we'll work our way through. Financials, industrials, and basic materials are still underowned, especially in the US. Ultimately, good opportunities there. The tech-driven spaces are very expensive and seen as a source of cash for people to redeploy as we go through the reopening.
COMMENT
Commodities hit today. Fairly bullish still. Saw good consolidation from May-July, and we're retesting areas of support right now. Pretty underowned. Copper is pulling back, as well as zinc. Agricultural commodities are strong, and the main agriculture ETF made a new high. Aluminum and nickel have been strong. Basic materials, including chemicals, is an area you want to watch through this pullback and maybe accumulate.
COMMENT
Dividends and share buybacks. Generational low in interest rates. We're going the other way, though it takes time to put in a bottom. One of the most important areas is dividend growth. During falling rates, you want a stable dividend, such as utilities. But if we end up in a reflationary period, dividend growth is more important than a high dividend. So financials, industrials, and basic materials have lots of scope to raise dividends and return capital to shareholders. This will be a very important theme, much like the 1960s and 70s with the Nifty 50 and dividend growth.
BUY
A real star. Best POS software company. Good growth rate, this year it's about 75%, estimate for 2023 is about 70%. RSI has been strong relative to the market. Will continue its growth in Canada and around the world.
WATCH
Great run at start of pandemic. Difficulty is newer contracts are with health insurers, so margins are lower. Not as sticky a service as you might think. You can join, and then unjoin. Hasn't held up. Stock's a bit broken. Need to see price pattern improve and subscriber base more stable.
HOLD
Great way to have exposure to copper and gold. Long-life assets, well operated. Stock's around the 200-day MA. Important to see it hold above $31. Over time, will likely grow its dividend. The VTV, dominated by economically sensitive stocks, made a new high 3 days ago. These are holding in better than secular growth areas like tech. If it holds, one to add to.
BUY
Semis are more tied to the business cycle, so in a reflationary environment, they should continue to do quite well. Earnings were very strong, trading at virtually a new high. 3 areas of growth: cloud, video gaming, and crypto. Great company. AMZN is great, but not as well set up.
HOLD
Index provider. $10 EPS this year, which is up 25% over last year. Revenues are 50% from the Americas, but growing around the world. Great company. Tremendous run, so maybe it needs to consolidate. He'd choose SPGI today, as they do bonds and are moving into China. Both are great long-term holds.
BUY
Today, he'd choose SPGI over MSCI, as SPGI does bonds and is moving into China. Both are great long-term holds.
WEAK BUY
Very good history. Nice return since lows of March 2020. Near term, energy is challenged. Look at it for the higher dividend. Wouldn't want to see it break the 200-day MA, which is around $36. Not a rocket, but a good total return investment. Yield is just over 6%.
WAIT
Near term, energy appears to be consolidating. Infrastructure companies have had a great run, and will take time to consolidate. Longer-term, probably a good investment. Correction only started in last couple of weeks, so this may take some time.
BUY
Clean water companies fit into ESG portfolios. One of the strongest parts of the market. Leader in the group, steady growth which is likely to continue at 10% a year. Continues to outperform the S&P, so should have a tailwind for a while. Yield is a decent 1.3%.
PAST TOP PICK
(A Top Pick May 14/20, Up 57%) He moved on after its good run. Stay away from airlines right now, as they still have some work to do.
PAST TOP PICK
(A Top Pick May 14/20, Up 46%) Likes rails in general. Transports are an interesting place. For new money, he prefers logistics companies right now. Long-term, rails will continue to be attractive.
PAST TOP PICK
(A Top Pick May 14/20, Up 83%) Really likes the industrials. As a group, they're very attractive from a risk/reward perspective. Good pricing power, and demand is strong, with capacity constrained. Still looks attractive.