DON'T BUY
SLB vs. HAL

Neither. Look at the 10-year charts, both lower today than 10 years ago. When flush with money, make acquisitions; then when things turn nasty, take write downs. Result is less than zero value creation for shareholders. The only people making money are the executives.

HOLD
Down 19%.

Great free cashflow, more than covers the 4% yield. Cheap PE at 4x earnings. Q2 results coming out in early August, where a couple of divestitures will be announced. Awaiting stock buyback. Paying down debt, making acquisitions. $12B market cap, but not well followed.

SELL
NVO vs. LLY

Both are just too expensive. NVO is riding the wave of Ozempic, and already seeing a slew of competitive drugs to be released in next few years. LLY has been an incredibly well-run business. He could never buy something with a chart that looks like these, he just has to say he missed it and look for something that will generate returns for clients.

Tough thing with pharma is these drugs are massive successes, you get maybe 12 years of patent protection. Then your biggest success becomes your biggest concern as the patent wears off, and you struggle to find something else. It always happens.

SELL
NVO vs. LLY

Both are just too expensive. NVO is riding the wave of Ozempic, and already seeing a slew of competitive drugs to be released in next few years. LLY has been an incredibly well-run business. He could never buy something with a chart that looks like these, he just has to say he missed it and look for something that will generate returns for clients.

Tough thing with pharma is these drugs are massive successes, you get maybe 12 years of patent protection. Then your biggest success becomes your biggest concern as the patent wears off, and you struggle to find something else. It always happens.

BUY
Interested in the dividend for a "senior senior" ;)

Often when you see a stock with an 8+% dividend yield, you think value trap. Paying out more in dividends than it's earning, still secure. Large restructuring. Thinks by 2025 will be covering dividend again. Even if the stock never goes up, you're getting an over 8% return, and that's pretty decent. Revenue stream is evolving; management has been aggressive in a tough environment and is dealing with it.

Cautions the "senior senior" to have a diversified portfolio. Don't plow all your money into any stock. 

COMMENT
With more rate cuts, can telcos go up?

Yes. The whole sector is dealing with cord cutting. Young people today don't have cable; he used to fight over the remote control with his brother and sister. Now we're streaming everything, half of it for free. But we still need the internet and a smartphone.

BUY

Great growth story. Seems a mediocre business, but has done a spectacular job making acquisitions and cutting costs.

PAST TOP PICK
(A Top Pick Aug 04/23, Down 13%)

Still really likes it. Major issue was surgeries on hold during Covid. Revenues declined, now returning to growth. Free cashflow yield ~4.5%. Earnings growth should return to double digits by end of 2024 and into the next couple of years. Unique. Compelling value.

PAST TOP PICK
(A Top Pick Aug 04/23, Down 3%)

Phenomenal business. Somewhat sensitive to corn prices. Back to a double-digit grower. Rock-solid balance sheet and free cashflow. Unique and great.

PAST TOP PICK
(A Top Pick Aug 04/23, Down 11%)

Talcum powder settlement offer going to plaintiffs' vote on July 26, needs 75% approval. If deal is accepted, overhang will be gone, and you have a chance to buy at cheapest valuation in 20 years at 13x PE. Now pure medical devices (huge demographic play) and pharma since the spinoff.

TOP PICK
An issue that nobody else seems to be able to run the company except Bob Iger?

Absolutely compelling value. Big news is that streaming will break even this year, poised for significant growth. Biggest profit generator are theme parks, which are bustling and booming; insane prices, but parks are full. Earnings should easily grow by 20% for next 2 years. Dividend is back, share buybacks will follow. Incredible content creator. Yield is 0.9%.

ESPN is still growing, but more slowly. Morphing to streaming. Ad revenues are up, and presidential elections are a big boost. CEO succession has been a board issue for sure, a black mark on the company. We'll have to see over the next 12-18 months.

(Analysts’ price target is $124.84)
TOP PICK
Even though it's underperformed?

Security and cybersecurity are huge growth areas. $28B acquisition of Splunk, fuelling the security AI observability business. Morphed from hardware to software and services. $13B a year in free cashflow, being used to buy back stock and increase dividends. 13x PE, a really cheap tech stock. Yield is 3.4%.

(Analysts’ price target is $53.77)
TOP PICK

Music, not motors. Represents the new Japan in investor relations. Buys back stock every year, still sitting with net cash. Stock's down due to China slowdown, and yen is down sharply. Returning to growth, which has been double digits in the past. (Price target in yen.) Yield is 1.9%.

Leading market share in audio equipment. A bulletproof company, buy when the price is down.

(Analysts’ price target is $3933.33)
COMMENT
Go to cash if Trump wins because he'll destroy markets and the economy?

When Trump had that surprise win, the US futures fell 10% overnight. By the time things settled down in December, things started to go up again. The point is that this has nothing to do with Donald Trump. Presidents get elected every 4 years. Going to cash on the basis of a political event makes no sense at all.

BUY
A- credit rating, low PE, low price to book, nice dividend yield of 6.2%, 5-year low.

Low to almost-no growth, interest-rate sensitive. Likes the sector in general, should do well as rates come down over time (probably faster in Canada). So any stock in the sector should get some bump in price, along with the dividend, so you should get a reasonable return.