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BUY
The material sectors tend to be highly volatile. Seeing commodity prices firm up. Taking advantage of it. Their corporate policy is to pay out a percentage of earnings and their earnings have been very good. Declared an attractive dividend, but you cannot bank on this dividend going forward. Certainly doing well, strong balance sheet.
other mines
DON'T BUY
They do not take any credit risk. They are a transaction company, and with the move away from cash, MA will benefit. However, the valuation compared to their historic multiple is high. They used to trade at a market multiple. Now, it is at 2x the market multiple. It has been rerated. However, thinks it is stretched and any economic dislocation can see a big correction.
other services
DON'T BUY
In the news for their vaccine. It's pretty much all their business right now. Total revenue was $60M, but their market cap is $170B. The question is, are their legs with the vaccine franchise. They have lots of drugs in their pipeline, but there is a lot of risk.
Pharma & Healthcare
DON'T BUY
Years ago, it was the darling of the chip space. They have fallen on hard times. They still do $75B in business but they cannot get traction from a growth standpoint. Greatest attribute is the cheap valuation around 12x earnings. More a value trap. It could turn itself around. There are other better opportunities.
electrical / electronic
BUY
Capital market business is on fire in the US. There is tremendous amounts of liquidity. Goldman has been successful in this business. Chosen to go with other opportunities with banking, loan spreads, but still likes this.
investment companies / funds
BUY
Likes it. An aerospace company in defence. The aerospace part has not been doing well, but it is starting to get legs. The combined operation is still undervalued. They spin off a lot of cash. Should support growth in their capital allocation policy leading to higher dividends and stock buybacks.
Defense
BUY
Can buy now. A fairly recent entry to his portfolio. Always a mystery from a financial standpoint. Becoming more traditional in their accounting and how they allocate capital. New CEO that is investing heavily in distributions and fulfillment centres. More same day delivery is coming. Cloud business is the best in the world too. Getting involved with content and bought MGM now. A company that is growing quickly.
specialty stores