Latest Stock Buy or Sell? Make More Informed Decisions!
Today, David Driscoll commented about whether NVO-N, CME-Q, BN-T, ONXS-Q, UBER-N, TIH-T, FFH-T, HEI-N, GE-N, ENGH-T, V-N, CLPBY-OTC, JMHLY-OTC, ATRI-Q, CCA-T, LFUS-Q, DOL-T, ADI-Q, LNN-N, ATO-PA, IBM-N, MSFT-Q, GOOG-Q, CCA-T, T-T, PAYX-Q are stocks to buy or sell.
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Emerging markets are suffering as the USD has gone up. China announced stimulus package in September, and asked this company to get the Hong Kong economy rolling again. As a result, stock popped. Earnings not as bad as expected.
Still getting paid to wait, almost like a bond at 6%, and dividend grows every year. Still buying.
Everyone is on the AI-hype train. But you still have the long-term demographic of aging populations. Likes the ROIC at 14% compared to WACC at 7%. Has cashflow to make tuck-in acquisitions. You get organic revenue growth plus revenue growth from the acquisitions, and this will grow the business over time and compound. The 8th wonder of the world is time plus compounding.
Medical device industry has been slow since Covid, as everything shut down and surgeries cancelled. With rising rates, customers de-stocked inventory rather than buying more. Demand starting to pick up, so they can raise prices. Exceptionally cheap for a company that can grow 15% a year.
Small caps get whacked when interest rates rise. If investment-grade companies borrow at 6%, small caps borrow at 10%. Russell 2000 rallied after the election, and has fallen ~8% in December. ENGH has no debt. Strong FCF, dividend grows 15-20% every year.
Q4 earnings were a bit light, so stock's fallen. They also made 2 acquisitions in the quarter. With small caps, you have to be patient. Yield is 3.87%, almost unheard of for a small-cap stock. Switching business model to SaaS, which should improve margins over time and you'll eventually get increased profitability. Stock's at a new 52-week low, and he's buying.
Sits in client TFSAs, where you want Canadian names to get full value of the dividend. Whereas with US or international names, there's withholding tax.
Bottom line here has been pricing power due to all the global warming, which he doesn't see ebbing anytime soon. Combined ratio has declined from 100% to ~93%, a good thing. (CB, which he also owns, is at 88%.) The company keeps the difference from the combined ratio. Global acquisitions. Called in preferred shares, so can now fund business at a cheaper rate. Running on all cylinders, doing exactly as expected of it.
Will always depend on east of Manitoba, as that's where their businesses are. Makes money on both rental sales and maintenance, so $$ comes in at a regular pace. Recent acquisition in southwestern Ontario, but additional ones will be difficult because they dominate eastern Canada.
Likes that they generate so much FCF, they can just buy back shares, increase dividend, or go private. Virtually no debt, a few BBB bonds outstanding.
With tech stocks, he has to think about all kinds of things including how ethical they are. How do they treat customers and staff? Many of the drivers are new immigrants who can't get Canada-certified in their chosen professions. He'll turn down stocks like this one or META if he thinks they're not ethical. In part thanks to UBER, traffic congestion has increased.
Trading around 30x earnings, not expensive.
ROIC is 7.7%, WACC is 10%. So right now, they're not generating the profitability he likes to see. It will work through over time so that at some point (from 2-5 years), they'll be profitable. Gets you into the private equity world. US deregulation should enhance M&A activity, especially if the Fed cuts another half a point. Good hold for the long term.
He owns BN instead.
Gets you into the private equity world of alternative investments, without having to hold a mutual fund. You get more liquidity in an individual stock, along with potential growth of M&A. US deregulation should enhance M&A activity, especially if the Fed cuts another half a point. That's why it wanted to move its head office to New York.
Good allocators of capital. Only issue is that beta is higher, so stock price will be more volatile. Good hold for growth over the long term (whereas BAM provides income to retirees). Yield is 0.5%.
He chose to own this instead of owning gold, silver, or other commodities. You get double the return, with 1/3 the risk. Gets paid on both sides of deals. Capex is very low, so they pay a special dividend at the end of the year on top of their growing dividend.
Not just commodities. Also interest rates, currencies, and anything that can be traded. After January 20, volatility in the market is expected, which means more buying and selling of options and futures. Yield is 2%.
(Analysts’ price target is $245.42)
Fallen about 50% from its top. Usually trades ~20x PE; 2026 earnings expected at roughly 16x. Oversold. Opportunity for at least a recovery of 30%. Dollar-cost averaging does work. Last week, the news was 22% weight loss compared to the 25% expected. Operating margins of 40% plus, making money hand over fist with both insulin and weight loss products. Profits were up 43%, and so did the dividend last year.
When things get too out of hand, the selloff begins as people take profits and lock them in. Then one piece of bad news comes out, and the stock gets trampled. But this is a high-quality stock generating a ton of free cashflow. New clients are getting a full position, while current clients are being bumped up to a full 3% position.
(Price target is for NOVO.B on CPH in Danish krone.) Yield is 1.6%.
FCF generation has allowed them to raise dividends faster than the other telecoms.