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BUY
Allan Tong’s Discover Picks
Disney stocks jumped like a yo-yo, falling below $100, then returning to $105 when the report was released, and even surpassing $107. Let’s face it—Disney stocks have been gutted this year. DIS tumbled from above $155 to lose a full third of their value and making it one of the worst performers on Wall Street so far in 2022. It trades at 61x earnings, but has a forward PE of 24.1x. Read Summer stocks fun or summertime blues? 3 stocks to consider this summer for our full analysis.
entertainment services
BUY
Allan Tong’s Discover Picks In fact, when AmEx reported its Q1 2022 in mid-April, it stated a 42% rise in business travel spending year-over-year and 121% in travel and entertainment spending. That T&E spend in March matched pre-pandemic levels. Further, sales leapt 29% year-over-year $11.8 billion, wiping out pandemic declines. Card-member spending fueled this surge and it made record monthly volumes in March. Its Delta Air Lines card has made all-time highs in terms of accounts, while its platinum cards also hit record numbers in Q1. Card fees grew 16% year-over-year with three million new cards added. The EPS came in at $2.18, well above the expected $1.87. Management forecast 18% to 20% revenue growth for the full year. “People are looking to get out there and travel,” sais CEO Stephen Squeri on his conference call. Read Summer stocks fun or summertime blues? 3 stocks to consider this summer for our full analysis.
investment companies
funds
DON'T BUY
Allan Tong’s Discover Picks Unfortunately, SAM has missed all of its last four quarters, and they were wide misses. Its EPS is $-4.31 and worse, has declined 123.17% over the past year. SAM’s PE is -85.1x and profit margin is a woeful -2.73%. In Q1, shipment volumes fell 25% YOY as demand decreased. Revenue fell 21% in the quarter and its gross margin slipped from 45.8% to 40.2% YOY. The company has weak pricing power in a highly competitive business. Lots of negatives among its fundamentals. No surprise that Sam pays no dividend. The street feels lukewarm towards SAM stocks with five buys and six holds with a $442.90 price target or 23% higher. But will it get there? Read Summer stocks fun or summertime blues? 3 stocks to consider this summer for our full analysis.
Consumer Products
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TOP PICK
Stockchase Research Editor: Michael O'Reilly With over 929 million barrels of probable reserves focused in the prolific Montney and Pembina Cardium properties, we again reiterate ARX as a TOP PICK. Recent reported earnings doubled analyst expectations and the company is generating sizable positive cash flow. It pays a good dividend, backed by a payout ratio under 30% of cash flow. We continue to recommend a stop loss at $15, looking to achieve $21 -- upside potential over 19%. Yield 2.69% (Analysts’ price target is $20.96)
oil
gas
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TOP PICK
Stockchase Research Editor: Michael O'Reilly Following an earnings release that beat analyst estimates by 11%, we select HD as a TOP PICK. Revenues and profits were up on the year, impressive given revenue was up 33% a year ago as pandemic lockdowns had DYI busy on projects. We are not thrilled that they have used some cash reserves to buy back shares aggressively, while adding to debt, but trust in management's strategy. It pays a good dividend, backed by a payout ratio under 50% of cash flow. We recommend a stop loss at $264, looking to achieve $385 -- upside potential over 30%. Yield 2.57% (Analysts’ price target is $385.68)
specialty stores
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TOP PICK
Stockchase Research Editor: Michael O'Reilly EOG recently reported production increases of 13% over the year, helping to beat analysts expectations on earnings by 8%, while supporting a healthy ROE of 29%. Analysts now project earnings increases next year that project it at 9x earnings, compared to peers at 13x. It pays a good dividend that has been increasing for four consecutive years, backed by a payout ratio under 45% of cash flow. We like that the company has been increasing cash reserves, while buying back shares and retiring debt. We recommend setting a stop loss at $105, looking to achieve $149 -- upside over 16%. Yield 2.41% (Analysts’ price target is $148.87)
oil
gas
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PAST TOP PICK
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PAST TOP PICK
(A Top Pick Apr 01/21, Up 24.9%)Stockchase Research Editor: Michael O'Reilly Our PAST TOP PICK with MRK has triggered its stop at $50. To remain disciplined, we recommend covering half the position at this time. This will result in a net investment gain of 29%, when combined with the previous buy recommendation.
food processing
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PAST TOP PICK
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PAST TOP PICK
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PAST TOP PICK
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PAST TOP PICK
COMMENT
It's difficult to call the market short-term, though many S&P companies have reported well with earnings up 4-5% YOY. There's sometimes a disconnect between a company report to the market reaction, like Home Depot's positive report this morning with a strong backlog; HD shares opened sharply but have fallen. Investors are thinking/worried of the macro. She owns income and growth stocks. Utilities and pipelines pay dividends and she likes companies making profits, can access capital (to acquire) and therefore offer real growth.
COMMENT
Has owned this many years. It lagged the tech sector last year, but it was a tech defensive stock and have reported good results two weeks ago with 8% organic growth. Companies are investing in digitizing their companies, so CGI will benefit. CGI does acquisitions based on a strong balance sheet, and they grow organically. Doesn't pay a dividend.
consulting
