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Curated by Michael O'Reilly since 2020.
1550+ opinions with 4.81 rating (one of the best performing expert).

TOP PICK
Stockchase Research Editor: Michael O'Reilly

CNHI is the global leader in the manufacturing of agricultural combine harvesters.  It continues to improve efficiency of its production line processes and integrate new technology to help farmers.  It trades at 7x earnings, under 2x book value and supports a robust 32% ROE.  It pays a good dividend, backed by a payout ratio under 25% of cash flow.  It is prudently using some cash reserves to aggressively retire debt and buy back shares.  We recommend placing a stop-loss at $9.50, looking to achieve $15.00 -- upside potential of 25%.  Yield 3.2%

(Analysts’ price target is $15.07)
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Curated by Michael O'Reilly since 2020.
1550+ opinions with 4.81 rating (one of the best performing expert).

COMMENT
Stockchase Research Editor: Michael O'Reilly

The Singapore based company just completed its divestiture of its Nextracker subsidiary and now trades as Flex Ltd.  It partners with commercial and government entities to employ hi-tech supply chain solutions in 30 countries.  It trades at 13x earnings, under 2x book and supports a 22% ROE.  We recommend placing a stop-loss at $16, looking to achieve $33 -- upside potential of 40%.  Yield 0%      

(Analysts’ price target is $33.19)
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Curated by Michael O'Reilly since 2020.
1550+ opinions with 4.81 rating (one of the best performing expert).

TOP PICK
Stockchase Research Editor: Michael O'Reilly

LSXMA produces radio entertainment over satellite in the US and Canada and has over 34 million subscribers.  It trades at 12x earnings and at book value.  Quarterly cash reserves are growing, while debt is retired and shares bought back.  We recommend placing a stop-loss at $21.50, looking to achieve $40.00 -- upside potential of 28%.  Yield 0% 

(Analysts’ price target is $40.00)
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1550+ opinions with 4.81 rating (one of the best performing expert).

PAST TOP PICK
(A Top Pick Nov 16/23, Down 9.3%)Stockchase Research Editor: Michael O'Reilly

Our PAST TOP PICK with ADM has triggered its stop at $67.  To remain disciplined, we recommend covering the position at this time.  Along with our previous recommendation, this will result in a net investment loss of 13%.

COMMENT

He thinks that central banks have contributed to inflation with rising shelter costs. They're pivoting now as inflation comes down naturally. The rate hikes are down, and rates will decline perhaps gradually to the 2% target. Small-caps have been neglected by the markets, but are cheap. Bonds are also a bargain as are dividend payers like telcos, utilities and pipelines (e.g. Enbridge, Boralex) and enjoy growth tailwinds.

DON'T BUY

Doesn't follow it closely. Gross margins are 15% max. They were growing by acquisition until higher interest rates paused that. Organic growth is around 5% at best. It doesn't deserve a high valuation. They didn't attract a high enough offer to be bought out.

DON'T BUY

Doesn't follow it. The stock has gone nowhere in the past three years. Been a lot of turmoil in the company. The CEO left in a huff about compensation. They operate in a good business with EBITDA margins of 25%, but is volume- and price-driven. The business can be lumpy. They lost a client, but they recently growth good growth. Also, there's growing competition. Always trades at a premium, though. Take a profit or hold.

BUY

He was the lead activist investor. Since then, they have a brand new board and management board with serious experience. They're in a great space; huge infrastructure spending will happen in coming decades in intelligent transportation. They lead in electronic tolls in the US and lead in electronic weighing of vehicles. Insiders are buying a lot of stock in recent months, so they have a lot of confidence; this is rare and bodes well. Much upside ahead. 

PARTIAL BUY

Things haven't worked out for them in recent years. They went on a spending binge, buying companies, then Covid hit and nobody could travel. Bottom line: they recently did a rights issue, cleaned up the balance sheet as the main shareholder remains supportive. The mobile antenna division was hurt the most as their major client (Samsung) suffered with a swing in cell phone sales, but the other three divisions are doing well. They should sell the antenna division, but debt is in good shape. Better days lie ahead. Average down if you're under water.

BUY ON WEAKNESS

An AI play with a search engine that understands the human language. The valuation is always high. Supposedly, they're close to break even. Could be an acquisition target down the road. Wait for a better entry point. If they turn a profit, shares will do well.

DON'T BUY

Doesn't pay a high dividend and carries a lot of debt. They do debt-fuelled acquisitions. He doubts they can maintain their dividend.

HOLD

He remains a big shareholder. The pandemic hurt a lot of alcohol companies by cutting off their sales channels, and supply chain problems push costs through the roof.  They now have a big shareholder, a major player in North American juices, and he expects them to buy out DWS. DWS has divested some assets like real estate. They're putting the pieces in place for this sale, he suspects. Chances of shares rising are quite good.

DON'T BUY

He recommended this when shares were beaten up during Covid. The government wasn't going to let SIA fail. But he sold all shares around $14, because operating costs (labour) will forever will be higher. It's a tougher business now, though SIA is managed well and demand is huge from the aging population.

PAST TOP PICK
(A Top Pick Jan 31/23, Up 10%)

Are tied to home renos and there was huge pent-up demand coming out Covid. So, RCH stocked up on inventory and gained market share. Was up 30% last year, but last week they reported lower margins that will persist given excess inventory (that will last a few quarters). So, he took some profits around $45, but will buy them back. A strong balance sheet and track record.

PAST TOP PICK
(A Top Pick Jan 31/23, Down 22%)

Is the leading pet retailer in Canada as pet adoption continues to grow. This business is recession-proof. The valuation had to come in. Organic same-store sales growth has slowed a little, but management has delivered by expanding store count in underserved markets. The PE has fallen from 30x to 15x and now is 17-20x, which is reasonable considering growth potential and cash flow.