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COMMENT
Market Outlook This week in the market has had a lot of issues to deal with. Going forward investors need to be cognizant of these points and how they may impact their portfolios. There is a potential in the US to see the pandemic case and death counts tick up. He suggested investors should re-think asset allocations. Those heading into retirement should want some exposure into fixed income and increasingly into cash.
SELL
A game changer stock. They use it in their office for official document signing. Revenues have increased sharply, but the share price is now 25 times sales -- very expensive. You have to consider what the future length of runway looks like. He would caution against buying into high multiple stocks at the moment. He would be a seller on this right now in the event personal tax rates increase in the future.
Technology
COMMENT
US Banks? The big US banks have reported this week. All have pre-signalled what they expect loan losses from the pandemic to be. All the expected losses have been big, making this sector one he is suggesting patience with. He might suggest WFC as they have new executives in place. The company has been hurt and could be moving away from the issues dogging them in the past.
COMMENT
US Banks? The big US banks have reported this week. All have pre-signalled what they expect loan losses from the pandemic to be. All the expected losses have been big, making this sector one he is suggesting patience with. He might suggest WFC as they have new executives in place. The company has been hurt and could be moving away from the issues dogging them in the past.
banks
PARTIAL BUY
The company makes simulators for pilots and for doctors. They have cut their dividend recently, but it shows management is preserving cash flow. Pilots are required to keep hours up to maintain certification. As we get closer to mandated masks, and when there is news of a vaccine, there will be more comfort with high margin business travel. He might consider entering partially into a position and waiting to see improvement in fundamentals.
transportation equip & components
HOLD
He holds this for clients. They began buying at $110. The company provides analytics using massive data sets and selling data sets to different industries. They sell to insurance companies, for example, who would all for more accurate underwriting in a more profitable way. They provide similar services for the oil and gas sector. These are mission critical projects. The need will be rising going forward. He would continue to hold.
PAST TOP PICK
DON'T BUY
Ties to Chinese government? He does not own any Chinese listed stocks for fear of potential US de-listing. The issue is that you do not own the actual company, you own a "variable interest entity" -- a proxy for the underlying stock. If there were an issue that Canada came into conflict with China, your ownership could be in question. He is not willing to put clients into these entities.
DON'T BUY
There is almost an arms race that is going on with respect to vaccine development. We need to wait to see how human testing is going to work out. There will be lots of volatility in the meantime. He is not interested in playing a specific name -- much like what happened with marijuana stocks. He would look to companies that will provide syringes instead.
Pharma & Healthcare
COMMENT
Nasdaq vs TSE exchanges? If you look at the Nasdaq, it has been dominated by just a few names with the shift of work to home. We are likely to see mean reversion. He might trim a Nasdaq position and add to a TSE position. He also would look outside North America due to the correlation of the TSE with US markets. He might suggest looking into a Eurostock 600 ETF to be added.
