Latest Stock Buy or Sell? Make More Informed Decisions!

Part of the lesson being taught right now is that for the last 2-3 years we've really had a momentum market. Now it's being tested. Now that we're out of Q3 earnings season, investors are wondering what's going to happen next?

Usually when you have a company that's a large market-cap component of the S&P 500, chances are that it will tend to slide a little bit. 

We've had a topsy-turvy year because in September the market usually falls, but we rallied. Now we're into November when we normally rally, but we're starting to see a selloff right now. It's tax-loss selling season as well, so there could be a lot of portfolio managers selling losers and eventually getting back in and buying the winners.

Today the market's up 0.5-1%, so it's holding steady right now. But it's almost as though every news item that comes out these days is either going to push the market higher or push it lower. 

Right now the focus is on the Federal Reserve and whether they're going to cut interest rates in December. Everybody's sort of sitting on the fence right now, just waiting.

It would definitely put a shadow over stocks. The expectation is for a cut. Growth and momentum stocks need interest rates to continue to fall for them to see their profitability rise. So it's not just the tech stocks, but also the small caps.

The small cap stocks are more interesting right now because the Russell 2000 index hasn't really performed much this year. That's because small businesses in the US are taking it on the chin because of tariffs. If you're a small business and seeing a 40% tariff attached to all the things you import to create a final product, you have 2 choices. Either increase prices to customers for fear that revenues will fall, or eat the tariffs yourself and watch your free cashflow fall. If they have to borrow money to grow, the banks may not lend it to them.

Decent earnings print last quarter. Legal/professional side up 9% for organic growth, but print side is suffering from investment in Globe and Mail (organic growth down 4%). Slow print recovery, government cancellations, softer corporate sales momentum.

Business is solid. Decline of 15% recently. For most investors, decent time to add.

At the very top of the trend you have AI and the hyperscalers such as GOOG, AMZN, and MSFT. They're putting the boots to software companies. GOOG has produced a quantum computing chip, which calculates millions of times faster than AI chips.

You want to have at least one of these hyperscalers in your portfolio. If quantum computing becomes reality in the next 5-10 years, those are the names that will dominate the space.

If you're worried about the bubble bursting, then it's important to be disciplined. Buy it, and if it doubles in price you take half off the table. That protects your downside over time.

Banks in general have had a great year so far. BOC has cut rates, so the spread is good between lower deposit rates and higher mortgage rates. 

One concern for banks is if mortgage renewals come in at higher post-Covid rates. What's that going to do to the consumer? Using more take-home pay to pay down debt instead of buying stuff puts downward pressure on the economy.

Next year will be more challenging.

Tiny, with market cap only ~1B. Tough year for contractors. Flipside is Government of Canada infrastructure spending will bode well. Beat expectations. Trade issues holding back spending in short term. $10B backlog. Nice entry point for long-term hold.

All the telcos were building out their 5G networks and borrowed a lot of money, thinking customers would pay up. Instead, they went to the el cheapo Koodos and Fidos of the world. That's really hurt. Remember the 3 D's of investing:  Debt Doesn't Disappear.

Revenue growth has been flat. Has to consider more asset sales. In his opinion, FCF is not covering the dividend, yet recently increased it. If asset sales go through, should have enough to cover dividend. Tough business right now.

Software companies are really under the gun right now, could be going the way of the buggy whip. He sold a couple of months ago. His view is that software's being taken over by AI. Challenged to grow business going forward.

Software companies are really under the gun right now, could be going the way of the buggy whip. He sold a couple of months ago. His view is that software's being taken over by AI. Challenged to grow business going forward.

Spanish economy has been good, tourism up, EU interest rates have fallen. Moving forward, where is expansion going to come from? Big risk is what if Spanish economy starts to struggle? If you've done well, consider paring back. Once you double your $$, good time to sell half and then the rest is free.

Storm clouds aren't out there yet. But a stock that's moved this quickly will most likely go sideways or down a little bit. Nothing wrong with taking some profits off the table.

Used to control the market, now facing competition and that will continue. That's what caused the stock to fall. What's the next phase of their growth? That's where the investor has to pay attention. Not a place to be.

(Note the short timeframe.)  He's buying right now. Company's been solid, dividend growth good. Tailwind of Swedish krona, the best-performing major currency in the world. Trades at 10-15x forward PE, very attractive.

(Note the short timeframe.)  Lots of continued demand for HVAC due to higher electricity bills, global warming, and buildout of data centres. Growing profits in 35-50% range, so he'll still buy at these prices. But lots of volatility, so pay attention.

(Note the short timeframe.)  Small cap, with more potential to grow its business than the competition. Yield is good, with dividend growing at a hefty rate. Tariffs make good business, as it's more important than ever to assess what's being exported and imported. Not a huge revenue base going to the US. A buy right now.