It rises from the S&P goes down. A great way to be bearish without taking too much risk. Makes you money in a down market, if you use this judiciously.
Like the HIU, rises when the S&P goes down. Own this if you expect hard times ahead, if you're bearish, as banks continue to raise rates to fight inflation.
top pick CASH as a top pick. He sees interest rates going up and clouds on the horizon. Play defence, preserve cash. Can own money market funds or GICs, depending on how long you want to be locked in.
Good to reduce volatility. A covered call on a dividend payer layers in defence upon defence. ZWC will provide a steady income stream on the way up, yet limited vol on the way down.
Allan Tong’s Discover PicksCVS has been paying down debt after buying insurer Aetna three years ago and their balance sheet is in such decent shape that the company recently announced share buybacks, though you may need to wait for a dividend to increase from the current 2.2% based on a low 34% payout ratio. CVS trades a fine 16x PE. The 6.02% EPS marked a 7% rise over the past year. Sales are up 8% YOY and growth is expected around that much. Expect sustainable, moderate growth. (If you want mega, double-digit growth, gamble on Bitcoin.) Read 3 Recession Proof Stocks for our full analysis.
Allan Tong’s Discover Picks EV’s remain a fast-growing segment in autos, and Ford is wise enough to invest heavily in it by building an assembly plant in Ohio. The company grew 5.6% in the past year and is expected to maintain that pace in the coming year. Last month’s quarter was strong enough to support a 50% increase in the dividend, now paying 3.95% at a low 10.47% payout ratio. Shares themselves are still trading very low, at a 5x PE above $15. That marks a $4 jump from a month ago, when the market was evacuating Ford like a sinking ship. Those fears were overblown. In fact, Wall Street puts the forward PE at 7.15x though. Read 3 Recession Proof Stocks for our full analysis.
Allan Tong’s Discover Picks Since early February, IFC-T has been range-bound roughly $172 and $190 where it trades as of this writing. While the market continues to rise this summer, volatility won’t vanish as long as inflation rages, so look for IFC to fall below $180 before stepping in. The current rally was triggered by the company’s quarter released at the end of July where the $3.14 EPS easily beat the street’s $2.78. that EPS marked a 21.92% YOY. Also, Intact beat its prior four quarters as well.
The price target for IFC stock is $214.78, and the forward PE is 19.93x, much higher than the current 13.04x, so Bay Street is confident. Read 3 Recession Proof Stocks for our full analysis.
Ford, GM and, of course, Tesla, attract all the attention, but this Japanese carmaker could outpace them. Trading in New York, Honda has just partnered with Sony to produce EV's by 2025. It's a belated move into electric cars, but promising, given the prowess of Sony in electronics and Honda's track record as a successful gas automaker. Each company will invest five billion Yen (US$37 million). Meanwhile, Honda will launch two EV's in partnership with GM in 2024.
Fortis is building transmission lines to renwewable energy which will de-carbonize their fleet and attract more ESG investment. Renewable energy is big and getting bigger. Fortis shares tend to swing within a range, so pick it up below $60 and watch it ride higher. It currently trades just above $60. The current EPS of $2.65 is double the industry average. Its PE of 22.9x is below the average of 35.1x, but higher than its own forward PE of 20.04x. Fortis is close to fair value now, though recently TD, BMO, Scotiabank and RBC targeted $62-65 for the name. Again, own this for income.
The company's revenue rose 12% in Q4 (16% if not for the currency swing). There was growth in their all-important cloud business by 25%. Compare this to 5% growth in PC's, post-pandemic. Cash flows remain strong while the profit margin is holding at a near-record 20% of sales. Also, Activision Blizzard, which MSFT will absorb, just reported a mixed earnings beat and those shares have inched up. That said, it's clear that videogaming and remote work are retreating to pre-Covid levels.