Latest Stock Buy or Sell? Make More Informed Decisions!

Owns shares, but has been frustrated. Stock price not performing well. Company has improved a lot through the years. Strong assets with cheap valuation. Will continue to hold shares. Expecting continued strength in energy prices. 

Would not advise buying. Seeing stock price remain where it is. Is cheaper, but not getting growth. 

Hard to determine short term outlook of the business with recent legal issues. Long term, will be a good investment, however stock is depressed now. Strong brand name and franchise, but company in for tough times going forward. 

Current share price valuation very high. Growth not justifying share price. If company misses estimates, will suffer massive valuation cut. Risky at the high share price. Would not recommend investing at this time. 

Has been very bullish on company, however, has recent taken some profits. Still a cheap valuation, but not sure on outlook of business. Auto sales are hit hard when consumers falter. Not buying at this time. Transition to EV business will be costly and slow. 

Buying shares in recent market selloff. Latest earnings report not strong. However, business is very good. Would recommend holding for long term investors. Recent M&A has a lot of potential. Expecting higher margins and cash flow. 

EPS of $1.01 beat estimates of $0.84 and revenues of $12.6B missed estimates of $12.89B. Sales declined 2% year-over-year, but its gross margins expanded 1.1% to 44.7% for the quarter. Management noted it is addressing near-term challenges head-on, and guidance was updated to reflect FY2025 revenue to be down mid-single digits, with the first half falling by high single-digits. Several analysts downgraded the name, but historically NKE has shown resilience during economic downturns. 

We certainly do not like the negative momentum here, and from its peak in 2021 it is now at a 55% drawdown. This is a slightly worse drawdown than in 2009, and slightly better than its drawdown from 2000. It is still trading at a fairly high forward P/E of 22.5X, considering the large drawdown, but for a long-term hold, we see this name as having potential to recover eventually. But this process could take several years, and for now we would prefer to wait until its price has settled and found an area of support.
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Using BCE as an example, its growth has decelerated, volume growth consumes a large amount of capital, while pricing power is limited in the industry. But, Canada remains an oligopoly with little real competition, and largely, we do not believe its dividend is at any real risk in the medium term. One of the issues has been a combination of slowing growth, mixed with lower free cash flows relative to its dividend payments, resulting in increased borrowing at currently high rates. While a 5% interest rate may not seem objectively high, when considering the levels these companies were borrowing before, the rate of change is extremely high, and this is what impacts a company's bottom line. 

We would like to see BCE and other telcos tighten up on spending and begin to improve their margins to fully secure current dividend payments, but debt levels have been rising and this has led to some concerns by investors. We do not like the negative momentum of the name, but we believe a lot of worries have been priced into the name and we feel it can be slowly accumulated by income investors with a long-term timeframe. 
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As an example, the equal-weighted S&P 500 outperformed the market-weighted S&P 500 from mid-2003 until roughly 2014. From 2014 until today, the market-weighted S&P 500 has outperformed its equal-weighted counterpart, and this typically is temporarily reversed in major market drawdowns (2009, 2020, and somewhat 2022). But, overall since mid-2003, the equal-weighted index has slightly outperformed the market-weighted index on a total return basis. 

Given the recent trend of the equal-weight index underperforming the market-weighted index, we would not seek to go against this trend just yet. Although, for an investor with a long-term timeframe and a willingness to see relative underperformance in the near-term, we think the equal-weighted index can outperform over the long term. We like the EQL ETF for a Canadian-denominated equal-weighted S&P 500 ETF.
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The Rationale for Investing in the Canadian Market:

1.   Owning the TSX is similar to buying insurance for the portfolio against a market downturn. This is because the Canadian market is heavily dominated by defensive sectors which could act as a hedge against market downturn.

2.   Discrepancy between the two markets has never been wider than before. For example, the TSX is trading in the range of 17x – 19x multiples, the S&P 500 is trading in the range of 25x – 27x multiples.

3.   The opportunities set for Canadian investors are even more attractive in the small and mid-cap space, where we think there are tremendous opportunities for undervalued long-term compounders that if being traded in the US market would see a much higher multiple.
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