Latest Stock Buy or Sell? Make More Informed Decisions!
Today, Stockchase Discover and The Panic-Proof Portfolio (Stockchase Research) commented about whether ZIM-N, PVH-N, BSET-Q, BCE-T, T-T, GM-N are stocks to buy or sell.
- Page 1/2
- Next Page
BUY
Allan Tong’s Discover Picks GM stocks trade at a mere 5.28x PE, though their beta is 1.22 and they pays no dividend. Around $32, shares are flirting with 52-week lows, which is an attractive entry point. Bears will point that cars, gas or electric, are a cyclical business, and the economy is slowing down. Fair point. However, the supply chain will ease eventually while demand for EV’s will not diminish. In short, GM stocks have been beaten up so much lately that they’re now looking attractive enough to nibble at. Read 3 defensive stocks weather uncertain markets for our full analysis.
Automotive
BUY
Allan Tong’s Discover Picks Telus pays a fat 4.72% dividend yield at a % payout ratio. It trades at 23x earnings and a mere 0.54 beta. Shares are actually trading at 2022 lows beneath $29, but that’s in line with the overall TSX. Surprisingly, Telus has beat only one of its last four quarters, met two, but missed one. Not exactly a slam dunk. Read 3 defensive stocks weather uncertain markets for our full analysis.
telephone utilities
BUY
Allan Tong’s Discover Picks BCE, owned by Bell which owns the phone lines that the internet runs on (though everyone ignores this conflict of interest) pays a 5.82% dividend, trades at 19.6x earnings and at a super-low 0.34 beta. BCE stocks, too, are wallowing around 52-week lows of $63, but the stock has beaten or met all of its last four quarters. Read 3 defensive stocks weather uncertain markets for our full analysis.
telephone utilities
Premium content
TOP PICK
Stockchase Research Editor: Michael O'Reilly This TOP PICK just beat analyst expectations by 80% and trades just 1.1x book value. This 120 year old manufacturer of home furnishings operates thru 97 stores in the US. Revenue has grown to almost double pre-pandemic levels. Retail margins expanded despite rising cost inflation. Order backlogs remain robust. We like that management has grown cash reserves while buying back stock and retiring debt. It pays a nice dividend, backed by a payout ratio under 25% of cash flow. We recommend a stop loss at $14.50, looking to achieve $32.50 -- upside over 65%. Yield 2.97% (Analysts’ price target is $32.50)
household goods
Premium content
TOP PICK
Stockchase Research Editor: Michael O'Reilly This owner of such brands as Calvin Klein and Tommy Hilfiger recently beat analyst earnings estimates by over 35%. Despite lockdown and supply chain issues, the company is reporting strong sales recovery already in Korea and Australia. It trades at 5x earnings, compared to peers at 14x and is trading under book value at today's price. We like that management has prudently used some cash reserves to help aggressively retire debt and buy back shares. We recommend a stop loss at $47, looking to achieve $95 -- upside potential over 65%. Yield 0.2% (Analysts’ price target is $95.40)
Premium content
TOP PICK
Stockchase Research Editor: Michael O'Reilly This TOP PICK is an Israel based shipping company that operates from Asia to the US East coast. It holds over $36/share in cash reserves and bases its dividend on income -- paying 20% of income quarterly and 30-50% on an annual basis. It has been able to pass along supply chain cost increases to customers, reporting revenues up 113% over the year. Analysts foretell that a global recession could hurt the forward outlook, so keep a tempered view for dividend yield. This is a good inflation resistant asset to hold. We recommend a stop loss at $27, looking to achieve $60 -- upside over 42%. Yield 11.9% (Analysts’ price target is $72.66)
Transportation
COMMENT
He's seeing a lot more value in the markets after this strong sell-off. He's chipping away at these companies at or below his fair-market-value estimates. He is sector and geography agnostic. He looks for strong and predictable returns on capital, and the founder is still involved (i.e. managing it). He's not looking at sectors per se. We're already in a recession, probably since the middle of Q1 earlier this year. A market downturn can be your best friend, which sounds off-putting. Investors should focus beyond the next 6-12 months, which he realizes is tough to do. But investors can look forward to better returns in the future. No idea if there's another leg down in the market though.
WATCH
A predictable, quality company though the PE is too high (though not bad); he prefers 20x PE. Is watching it. There is 80% insider ownership, which can be positive, though not always. In other words, he's neutral about this issue of ownership. Can they compete in China? It's a massive market, but very difficult to survive here. Too risky for him. EL has tremendous brands and nicely grow, overall, though.
Consumer Products
DON'T BUY
He owned it 5 years ago, but return on invested capital over 10 years was above 20%, but has more recently fallen to 5-6%. SAP relies on production and the supply of milk, which they don't control the price of (makes him nervous). So, it's like a commodity play. The returns on capital are too low for him and have been declining.
food processing
DON'T BUY
Doesn't own any of the Canadian banking cartel. This industry needs disruption and more competition. Banks have enjoyed excess profits because they are a cartel. TD and Royal were the leaders here, but return in invested capital are in the mid-10s. Sure, reliable returns, but that is due to an oligopoly. More banks would benefit the Canadian consumer, certainly.
banks
DON'T BUY
They carrry little debt and are still run by the founder which is good. It trades around 14x earnings while returns remain above 20%. Well-run. Has relied a lot on acquisitions and integrating them well. They relied on the Paw Patrol franchise a lot, but that is relying too much on a single franchise. This is a hit-or-miss situation which he doesn't like. TOY doesn't have the track record of Disney to withstand that risk.
PAST TOP PICK
(A Top Pick Jun 01/21, Up 12%) Owned this since 2014 and his largest position. Founder-run and the best capital allocators on the planet. Generate returns of 30% since 2006. He expects this to continue. CSU doesn't rely on debt, so they can buy companies cheaply in this economic downturn.
computer software
processing
PAST TOP PICK
(A Top Pick Jun 01/21, Down 19%) Been challenging, though has added at lower levels recently. They had huge challenges in Covid, namely selling infant formula to China which was shut down of course. A2M recently launched in Canada, so he's optimistic they will return to pre-Covid profits. But this turnaround is taking time. Likes the brand, but is getting a little impatient.
agriculture
