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Almost anything in semiconductors or tech got whacked pretty hard. Highly valued stocks got hit the hardest. He looks to see if a stock's had an earnings downgrade. Tech took quite a hit, and he's taken money out recently, but a lot of the problems have been front-ended. Last year was the adjustment to higher interest rates, and valuations collapsed across the board. That part's done, so now you have to pick the winners and do a bit more work on the earnings stories.
In a widespread war, what companies would benefit from wartime production?(A Commentary)
Feb 23, 2023He doesn't worry too much about what he thinks are low probability factors. GM, MG, STLC all have capabilities in factories and raw products to switch to products other than those used in peacetime. He doesn't necessarily want to invest on that basis. But if that's your view, the major industrials wouldn't suffer as much, because they would have a production outlet. During the pandemic, modern manufacturing processes allowed many businesses to switch to Covid-related products. He can't invest on the basis of what he doesn't know, so he goes with what he does know.
He's been taking some money out on earnings trepidation in Asian operations. Had a really good run. He's been adding to bank stocks, and TD is at the top of the list with its US acquisition still being finalized. MFC was trading at 8x PE with a 5% yield, whereas TD is more expensive. TD has more growth potential.
He's been taking some money out of MFC on earnings trepidation in Asian operations. He's been adding to bank stocks, and TD is at the top of the list with its US acquisition still being finalized. MFC was trading at 8x PE with a 5% yield, whereas TD is more expensive. TD has more growth potential.
He got nervous on nat gas stocks last year, so he took profits. Stocks have now checked back. He's more likely to add at this point. One of the greatest operators out there. Great acquisitions plus internal growth. Be a bit worried about a pure nat gas player, as there's no shortage of nat gas in NA. If he were to add right now, they'd be more purely oil-levered plays.
All of tech has been trashed. Higher valuation multiples came down. Biggest area of growth has become online advertising, and this has become a lot more cyclical since it's a bigger part of the economy. This may be a risk in an economic downturn. Bigger issue is the whole move to AI. GOOG makes money on the clicks, so AI may make GOOG somewhat irrelevant. A new risk to be aware of. He's not going all-in on it anymore, because a couple of its businesses are facing some shorter-term risks.
More that the market doesn't like banks right now, rather than not liking the acquisition. If the economy slows down, what will that do to loan losses? Earnings start tomorrow, might be all right as the economy hasn't rolled over yet. Lower end of valuation range, decent dividends, but earnings growth will be challenged in the short term.
He likes it here, checked back from its 40 PE multiple. Gaining so much market share from INTC in workstations and the PC market. Good play on AI, servers, and data centres. $4 EPS this year, trading at 20x which is not bad.