Latest Stock Buy or Sell? Make More Informed Decisions!
Today, Jason Del Vicario and Stockchase Insights commented about whether AQN-T, CRNC-Q, PLTR-Q, 7085-TYO, CLX-LON, KSPI-Q, SHOP-T, MELI-Q, COST-Q, GM-N, FFH-T, 4441-TYO, ATD-T, EVO-STO, NFLX-Q, TOI-X, BRK.B-N, CSU-T, KO-N, FEVR-LSE, PEP-Q, META-Q, MSFT-Q are stocks to buy or sell.
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A bit of a black box. Stock price has done very well the last few years, after having gone nowhere before that. Insurance at the core, and Prem Watsa's done a great job allocating those premiums. Higher rates favours insurers, lower rates the opposite, and he has no control over what the future holds.
If you own it, hold. You may want to investigate succession plans.
Wonderful business, though not a good valuation (and that's the orange flag). PE ratio is in the 40s if not the 50s, lots of growth already priced in. Even 30x PE is probably a bit rich. Fantastic job increasing cashflow per share. If you own it, hold on (again, from Charlie Munger, "do not interrupt compounding unnecessarily").
He's not that familiar with this one. Look at free cashflow (operating cashflow minus capex). As a tech company,
stock-based compensation could be a potential landmine (giving out shares, but it "doesn't count" because it's not a cash item). Strong company, though some negative ROIC in the past going back to 2018 (which was before Covid). Too expensive here to buy afresh.
Leader in Central and South America. If you own it, hold, as long as returns on capital continue strong and don't turn negative. Probably a compounder, as these are winner-take-all businesses.
See his Top Picks.
Imagine....FB, AMZN, PayPal, DoorDash, pay your taxes, renew your driver's license, peer-to-peer payments....all in one app. Dominated the country. Recently expanded to the Turkish market. Trades at 7x PE. History of doing buybacks. Really well run. Yield is 8.06%.
(Analysts’ price target is $118.01)A business in his stable of 28 that's trading at a favourable price. Scottish-based. Tests telecom equipment. Downturn in telecom capex spending, but we're going to be downloading more data and doing more stuff via the internet. Note that it is a cyclical business, but this short-term headwind has created a strong buying opportunity. (Price target in pounds.) Yield is 1.74%.
(Analysts’ price target is $109.00)Petered out in North America, he's not sure why. Has really taken off in Japan, with about 2000 locations. Structured workouts for women in their 40s, 50s, 60s. Bought the franchise, so controls the destiny of Curves worldwide. Monthly subscription fees make the franchise model very high margin and predictable. No direct competitor.
New pillar of growth might be Curves for Men. Expanded brand to Europe. Very reasonable 16x PE. A newish position, has held this name about a year in portfolios. (Price target in yen.) Yield is 2.46%.
At 205X earnings, the stock is vulnerable to sentiment swings, as we saw on Thursday with politicians worrying about it having 'too much power'. In a way, though, this exemplifies how well it has done, and its potential moat. It seems to have a better AI/data mousetrap, and can solve company and government problems effectively and cheaply. We admire what the company has done and its growth and its outlook potential. BUT....it has also become somewhat of a 'cult' stock. The CEO is brilliant, but also perhaps a little crazy (not necessary in a bad way!). Everyone loves it right now, but this is dangerous if the love affair goes the wrong way or a company problem develops. Even at half the valuation, it is still very expensive. So investors we think need to be prepared, as this is a stock that could decline 50%, pretty much overnight, on some bad news. We think sizing a position correctly to reflect this makes sense, and trimming into more declines to maintain a position, but also to manage risks. We do think it will be higher in five years: but it may be all over the map during that time.
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CRNC had a very strong recent quarter, with EPS nearly double estimates. Sales were 4% better than expected. EBITDA was 48% better. It is up 200% in a year and trades at 44X earnings. Certainly stock and fundamental momentum is very solid here. Net debt is a bit high at 3X cash flow, and its small size adds risks. EPS is also expected to dip this year from very strong recent numbers. Insiders own 9% and have been buyers this year. The 2025 forecast did beat estimates. It has some good partnerships with companies such as ARM. The sector is also poised for growth, as noted with some regulatory help. It looks good for a small cap, though is pricey and due to its size risk we would size a position accordingly.
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AQN is cheap, trading at 11.8X forward EV/EBITDA and 1.0X book. Its assets are likely worth more individually than its current market cap, making a good case for the sum-of-parts equation. But, management has recently outlined a plan to turn the company around, and acquirers generally don't like buying during recovery phases. We think if its price stagnates around these levels for several months, it would more likely become a takeover target.
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Investing 101: Price-to-sales (P/S) and Price-to-Book (P/B)
Two other ratios, being P/S and P/B, are useful for further comparison or when P/E is inapplicable due to the limitations surrounding earnings and other industry specific factors. The calculation for P/S takes a company’s market capitalization (number of shares outstanding x share price) and divides by its total revenue. The interpretation of P/S is quite similar to P/E as it tells investors how much the market values every dollar of a company’s sales. Similarly, to P/E investors typically want to target a low P/S ratio.
P/B on the other hand measures price-to-book value of equity. The calculation for P/B is the current market cap divided by the book value of equity. To derive book value of equity, investors must look to the balance sheet to determine the difference between assets minus liabilities. P/B has a slightly different interpretation, as it focusses more internally, on how the company is being priced by the market relative to its assets. A P/B ratio of less than 1.0 indicates that the company is being valued less than its equity and can be an indicator of undervaluation. A P/B ratio of 1.0, indicates that the stock is being priced at a fair value compared to the book value of the company.
Although P/E is typically the most widely utilized of the three ratios, P/S and P/B display some advantages. For example, if an investor is analyzing a high growth company that is operating at a loss or has recently suffered a setback in earnings, P/S can provide a better insight. P/B can also be useful in identifying high growth stocks that are severely undervalued due to the company’s early stages. P/B can also be useful in analyzing capital intensive industries such as real estate and energy where earnings are not the primary indicator of current or future success.
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Monday they host a Worldwide Developer's Conference and some have bid on the stock today based on that, up 1.64%. However, Trump wants Apple to build iPhones in the US, which is a serious problem and make Apple hard to own. However, maybe Apple can catch a break now that Elon Musk is drawing so much fire.
Only one of its kind (anti-spam software) in Japan, plus the only one that actively shares information with police. The value is the database. Focus on the business, not the stocks. Increased revenues and earnings, FCF per share is coming up nicely. Dividend increases. Trades at a reasonable 15-16x PE for such a great business.