PAST TOP PICK
(A Top Pick Jul 14/21, Down 9%) It has a wide moat with very few competitors. They invest a lot in data analytics and tech. 55% recurring revenues.
investment companies / funds
HOLD
Stay patient with this. Are well-managed, have a solid business plan and their valuation is very cheap. Also, they produce a lot of cash. They are developing self-driving cars operating as taxis--this is the future.
Automotive
BUY
The valuation has always been a little high for him, but now the stock has come down while earnings have grown respectably. MSFT did just warn of forex with the USD very high (this will hurt foreign revenues for all US companies). Now, their PE is more acceptable. He's always loved their management, better than Meta or even Google.
computer software / processing
BUY
Has owned this for a long time. Are vertically integrated. Their core are the 10,000 pharmacies. Have merged with Caremark, a pharmacy benefit manager, and bought Aetna the health insurer. Great CEO. They write about a billion prescriptions a year. CVS offers stability to a portfolio to offset the cyclical ones.
specialty stores
DON'T BUY
A value trap. It's been bottoming out for a long time and never found its feet. They spent $20 billion annually in R&D that hasn't paid off. Competitors are leaving them behind. He owns Qualcomm instead, because they execute well.
electrical / electronic
BUY
The fear is that if there's a recession, then payment transaction volume will drop. But a recession will be temporary, if it happens. Their valuation has fallen to somewhere more reasonable. Their earnings have done quite well. The PE has fallen to the low-30s to low-20s which is much more acceptable.
other services
DON'T BUY
He sold Meta in recent months, because it's too risky and faces competition from Tik Tok, though Meta has rolled out Reels. Meta needs to reinvent themselves through the metaverse, which is really AI. The metaverse just might be the next great thing, but can Meta support its business until then. Meta's costs are rising.
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