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TOP PICK
Stockchase Research Editor: Michael O'Reilly We reiterate our TOP PICK recommendation of LEN as the largest home builder in the US. Continued low interest rates has sparked demand growth in their prime markets of the Sun Belt, Florida and Texas, where housing inventory is already tight. JP Morgan recently put a $141 target price on the stock. It trades at only 10x earnings, compared to peers at over 20x and is valued currently at less than 2x book. It pays a dividend backed by a payout ratio under 10% of cash flow, while paying down debt and building cash reserves. We would buy this with stop at $96 -- looking to achieve $140 -- upside potential over 32%. Yield 0.95% (Analysts’ price target is $117.25)
REAL ESTATE

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TOP PICK
Stockchase Research Editor: Michael O'Reilly We reiterate our TOP PICK recommendation of TOL as a luxury home builder. Continued low interest rates continues to spark new construction allowing the company to pay down debt, buy back stock, while growing cash reserves. It pays a small dividend, backed by a payout ratio under 15% of cash flow. It trades at 12x earnings and less than 2x book value. We would buy this with a stop loss at $54.00, looking to achieve $75.00 -- upside potential over 16%. Yield 1.07% (Analysts’ price target is $74.10)
contractors

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TOP PICK
Stockchase Research Editor: Michael O'Reilly We reiterate our TOP PICK recommendation of DIR.UN. As an industrial REIT it has benefitted from the supply chain needs created by the pandemic. It trades at 9x earnings compared to peers at 38x and is valued at under 1.5x book. It pays a great dividend backed by a payout ratio under 50% of cash flow. We would buy this with a stop loss at $16. As we continue to view this as a defensive stock, we will hold this under our stop is triggered. (Analysts’ price target is $17.03)
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PAST TOP PICK
(A Top Pick Oct 08/20, Up 17%)Stockchase Research Editor: Michael O'Reilly Our PAST TOP PICK with SR has triggered its stop at $65. We recommend covering the position at this time. Combined with the previous recommendation to cover half the position upon reaching our initial objective, this results in a net investment return of 24%.
Energy Infrastructure, Industrials & Utilities
COMMENT
The past year we've seen a shift from growth to value stocks, triggered by the first vaccine news last fall through March/April 2021. Since the spring, we've seen a rise in Delta which could delay the recover. The value rally is on pause. He'd buy cyclical stocks that will do well in an inflationary environment. He adopts a barbell strategy in case inflation (wage increases) last a little longer than expected, but remain temporary. Iron ore and potash are commodities worth buying. He's also looking for discretionary and tech growth stocks, but not the megacap techs in case we run into stagflation.
Unknown
WAIT
If they go private There is a bid to go private, but it's been dragging on for a while. DND stumbled with their recent UK acquisition, which may be a factor. The price will likely be above $50/share. DND has lagged its peers. He expects the deal to close, but wait for the big before deciding what to do with your shares.
0
BUY
It's not overvalued and he likes it here. ATD boasts valuation (cash flow, 17x PE, great balance sheet, fine ROE), price momentum with low volatility. However, they are running out of targets to sustain their growth. Overall, likes it.
food stores