Latest Stock Buy or Sell? Make More Informed Decisions!
Today, The Panic-Proof Portfolio (Stockchase Research) and Stockchase Discover commented about whether TSLA-Q, SHOP-T, MSFT-Q, ABBV-N, SSD-N, HOG-N, HIU-T are stocks to buy or sell.
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Premium content
TOP PICK
Stockchase Research Editor: Michael O'Reilly We again reiterate HIU as a defensive TOP PICK for Canadian investors. The low MER inverse ETF for the S&P500 is a good haven during periods of increased market instability. Its value will also benefit if the CAD dollar weakens during a market retracement as currency is not hedged. We recommend trailing up the stop (from $12.50) to $13.00. Yield 0%
E.T.F.'s
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TOP PICK
Stockchase Research Editor: Michael O'Reilly The company is interested in spinning off its EV line, which could bring good value (think Tesla trading at 80x earnings). The company is currently trading at 9x and recently reported earnings support a healthy ROE of 27%. Supply chain issues and microchip shortages have slowed sales growth, but earnings still met expectations and it is sign the demand is outstripping its supply -- a good thing. The company has prudently used some cash to retire debt. It's small dividend is supported by a payout ratio under 15% of cash flow. We recommend setting a stop loss at $28, looking to achieve $52 -- upside potential over 40%. Yield 1.64% (Analysts’ price target is $52.16)
household goods
Premium content
TOP PICK
Stockchase Research Editor: Michael O'Reilly The new CEO has accelerated the company's expansion into new high growth areas, including the OEM auto market. The company's traditional construction and manufacturing sectors helped propel revenue growth over 40% last year. Recent earnings beat expectations by 30% and support a solid ROE of 26%. It trades at 15x earnings, along side its peers. We like that is has continued to build cash reserves, while buying back stock. It pays a small dividend backed by a payout ratio under 15% of cash flow. We recommend setting a stop loss at $90, looking to achieve $146 -- upside potential over 30%. Yield 0.96% (Analysts’ price target is $146.33)
INDUSTRIAL PRODUCTS
Premium content
PAST TOP PICK
BUY
Allan Tong’s Discover Picks MSFT stock trades at 30.4x earnings, consistent with its 29.8x a year ago. In a time of volatility, MSFT stock remains steady in this regard. Microsoft remains a darling of Wall Street with 21 buys, one hold and a $363.781 price target, which is roughly 33% higher than current levels. Unfortunately, the name is gotten swept up in the massive tech stock sell-off, which drowned markets on April 29. Consider those pullbacks buying opportunities. Read Are mega tech stocks still alive? for our full analysis.
computer software
processing
PARTIAL BUY
Allan Tong’s Discover Picks The silver lining is that Shopify’s PE has plunged to 18.5x. In contrast, Amazon trades at 42.8x and Apple at 26.2x. Only Meta trades lower among the megatechs at 12.8x (and that is a whole different story). Shopify’s EPS stands at a reasonable $29.34, ROI 29.2% and profit margin of 63.2%. Not shabby at all. The company beat three of its last four quarters, including its most recent (Q4 2021). Again, decent. Read Are mega tech stocks still alive? for our full analysis.
0
DON'T BUY
Allan Tong’s Discover Picks This leaves TSLA stock with a PE around 183x, a market cap over $900 billion, and a beta of 2, based on shares trading around $900. Now, Tesla has beat its last four quarters, including a blowout last time, so the company does perform. It remains the global market leader in EV’s with nearly a 14% market share, compared to VW Group at 11%, BYD, a Chinese company, at 9%, and GM at 7.6%. In 2021, 6.6 million EV’s were sold (led by Chinese sales), more than tripling auto market share since 2019. Current sky-high fuel costs will only fuel demand for EV’s. Read Are mega tech stocks still alive? for our full analysis.
Consumer Products
COMMENT
It's widely expected to be a 50-point move tomorrow as well as June, but what he will listen for is their commentary and tone--hawkish or dovish? The bond market is the driver here. The 10-year yield touched 3% yesterday and anticipating the Fed's action while the market rerates what it expects will happen. The market is now at an extremely negative point, as pessimistic as 2008 or even further back, based on data he's seen. There are challenges and the market won't turn on a dime, but investors must remove their emotions and accept that cyclicality is a part of markets. It's a difficult but important time.
BUY
Too late to buy defence stocks? Not too late. Defence stocks have moved 30% off their levels 6-8 months ago because of the Russian war. Both LHR and General Dynamics earn about 70% of their revenues from the US government. He prefers Raytheon, a defence contractor (that makes the Patriot missile) and also produces commercial aircraft. The latter derives out of their legacy UTX business and amounts to 65% of their overall business. Expects the US government as well as NATO to be customers in their defence business as commercial picks up.
Transportation
COMMENT
Low profit margins, but high PE of 60x It's been growing into its earnings at the PE keeps declining. E-commerce is a low-margin business and recent results were disappointing. They invested a lot in building fulfillment centres during Covid, including hiring a lot of workers. However, the cloud business makes up almost all their profits, though revenues are smaller than e-commerce. Cloud has tremendous growth and potential. Basically, cloud is so strong that you're getting e-commerce for free.
specialty stores
COMMENT
His choice in the copper space. But it's a difficult market, extremely nervous that the US Fed will force that economy into recession. Companies like FCX rely on strong global growth and a Fed move could see FCX retrench. Also, FCX relies on demand from China, which is locking down in some parts to battle Covid. Long term, this is a great company. A few weeks ago they reported a strong quarter, net debt of $1.3 billion and return 50% of free cash flow to shareholders (buybacks and dividends). They remain profitable. Be patient with it, though.
non-base metal mining
HOLD
Impact of Russia? They don't have as much exposure to Russia as other American banks like Citi. Also consider the size of the Russia economy, which is around Canada's, so not that large. JPM shares are down because of fears that the US Fed will lead the US economy into recession. If that does not happen, JPM will deliver good results, like positive loan growth. This is good to hold onto.
Financial Services
PAST TOP PICK
(A Top Pick May 25/21, Down 36%) He sold it. Troubled times with more than its share of challenges. They were losing share to TikTok. Meta's Reels is trying to catch up. The company changed its name to Meta to transition to the metaverse. They may succeed, but it will take years and cost a lot.
Technology
PAST TOP PICK
