Latest Stock Buy or Sell? Make More Informed Decisions!

Today's topic of the day can quickly displace previous topics that we thought would last for a while. Regional banking issue in the US was a watershed moment because the Fed took its foot off the accelerator of tightening. 

He looked at the moment in time when the big technology stocks took off and left the rest of the market behind, which was early March, and it was almost to the day that SVB went under. It signalled that AI was rearing its head, but that the Fed would become more accommodative because of the problems created by an accelerated move higher in interest rates.

See his article at goodreid.com, under Insights, "US Market Bifurcation: A Story of Two Markets". The story is about those very few (6 or 8) companies that are responsible for the vast majority of the gain in the US equity performance in 2023. The good news is that whenever this has happened in the past, the leaders haven't fallen back to the pack but, rather, the others have caught up. 

To investors, you want to understand what sectors haven't performed well. Healthcare and energy. They've trailed, multiples are at historic lows, strong fundamentals, very good opportunity there.

He doesn't see a prolonged downturn. If you look at sentiment indicators and the AAII numbers, bullish sentiment is at the highest it's been since early 2022. Might indicate the markets are a bit ahead of themselves, which is not unusual. 

At some point, we'll have a normal bull market correction. That's healthy for the market, and it's a good opportunity for those who've been hesitant to enter the market.

Disconnect between a company and the stock. Trading at high end of multiple range, now at a 35% premium to the market. Price has already baked in investors using it as a place to hide out for an upcoming downturn.

Trades at a premium to historical multiple. Missteps. Inventory has caused problems. 

Insurer margins squeezed as procedures delayed by Covid now go ahead. Market's overreacted to this. Still a good long-term hold. Confident in management. Over next 5-10 years, healthcare spending will be double GDP growth.

Quality company. Suffered a while ago due to worries of recession. Cyclical, as people only rent when they have a lot of confidence in projects. Recovered because people are seeing the end of the hiking cycle, economy continues to be strong. Low multiple with high growth rates, a great combination.

Not a favourite. Revenue per share is down, yet still spends $20B a year on capital expansion. Not getting much for their money. Low marks on growth, and that ends the discussion for him. Hefty and unhealthy dividend yield of 7%.

Doesn't reach an acceptable level for its growth model. At one time, CEO said dividend was solid, and then it was cut mere weeks later.

You have to be very careful of buying into a company that has a sparkling dividend yield. It has to be supported. If it's not supported, then pass.

From today's price, $5.50 is in play. As a shareholder, you have to decide if it's worth holding onto your shares to get your $95 per share. There is a chance that the FTC is successful in challenging the US court order, in which case you'd want to exit now. He'd probably take his money and go, as there's a lot to be said for certainty.

Still really expensive at over 30x earnings for a consumer product. Not fantastic growth. Relatively weak balance sheet, lots of debt. Fairly well managed. Cost-cutting efforts can only go so far. Be careful.

Has risen on an expanded multiple, which isn't the greatest thing, pushing 30x earnings. Recurring services have become a bigger piece of its business. 93% loyalty rate. Share buybacks have been accretive.

Fabulous company that was thrown in the trash. Controls lots of franchises within the ecosystem of the travel industry, and doing a great job. Growth rates are probably around 20% per year.

Exited, as he wasn't completely comfortable with management. Curveball from management last September made him lose confidence.

Healthcare sector has been challenged, but growth rates will be robust over many years. Vertically integrated powerhouse. Very high free cashflow yield, in the low teens. Trades at 9x earnings. Unloved, but patience will pay off.