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September 30, 2020
Dominance of Humera on revenues had given them pause. Since then, it acquired Allergan, which diluted the concentration of Humera. Metrics are wonderful. 12% free cash flow yield. Trades at less than 10x earnings. Great dividend. Lots of runway ahead. Elective surgeries will come back. Anticipate $12.50 EPS this year, and more next. Yield is 5.42%. (Analysts’ price target is $109.35)
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Dominance of Humera on revenues had given them pause. Since then, it acquired Allergan, which diluted the concentration of Humera. Metrics are wonderful. 12% free cash flow yield. Trades at less than 10x earnings. Great dividend. Lots of runway ahead. Elective surgeries will come back. Anticipate $12.50 EPS this year, and more next. Yield is 5.42%. (Analysts’ price target is $109.35)
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TOP PICK
September 30, 2020
Structural materials for commercial aerospace. If you believe that aerospace will come back, and he does, this will be a good opportunity. No dividend. (Analysts’ price target is $40.53)
Show full opinionHide full opinionStructural materials for commercial aerospace. If you believe that aerospace will come back, and he does, this will be a good opportunity. No dividend. (Analysts’ price target is $40.53)
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TOP PICK
September 30, 2020
Came out of Kraft, as the snack piece. Growing well organically, 6.3% y/y. Prides itself on stability. Snacks are evolving; there are healthy options. Worldwide opportunity for expansion, sub-20x earnings, good dividend. The side of the barbell that gives stability to counteract the octane of tech. Yield is 2.21%. (Analysts’ price target is $62.96)
Show full opinionHide full opinionCame out of Kraft, as the snack piece. Growing well organically, 6.3% y/y. Prides itself on stability. Snacks are evolving; there are healthy options. Worldwide opportunity for expansion, sub-20x earnings, good dividend. The side of the barbell that gives stability to counteract the octane of tech. Yield is 2.21%. (Analysts’ price target is $62.96)
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TOP PICK
September 29, 2020
Stockchase Research Editor: Michael O'Reilly As the market valuations continue to be priced at perfection this is a defensive Top Pick. This low MER ETF tracks US 7-10 year Treasuries -- a safe haven during market down turns. What makes this interesting as well, from an Canadian investor's perspective, is that it is priced in Canadian dollars. This will add another kicker in a market down turn as we expect a flight to the US dollar safety at some point. We would buy this with a $60 stop-loss. Yield 0%
Show full opinionHide full opinionStockchase Research Editor: Michael O'Reilly As the market valuations continue to be priced at perfection this is a defensive Top Pick. This low MER ETF tracks US 7-10 year Treasuries -- a safe haven during market down turns. What makes this interesting as well, from an Canadian investor's perspective, is that it is priced in Canadian dollars. This will add another kicker in a market down turn as we expect a flight to the US dollar safety at some point. We would buy this with a $60 stop-loss. Yield 0%
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TOP PICK
September 29, 2020
Stockchase Research Editor: Michael O'Reilly MRK is one of the largest pharma companies in the world. It trades at a 13 PE compared to 22 PE for the S&P500. The pandemic has slowed some elective procedures, and that has slowed sales in the latest quarter by about 9%. However, management still opted to raise its 2020 guidance showing confidence that things should improve for the balance of the year. The company also has three drugs moving through various COVID-19 vaccine test trials. It pays a good yield, backed by a 58% payout ratio. We would buy this with an upper target towards $96 as the first objective and use $77 as a stop-loss. Yield 2.95% (Analysts’ price target is $95.94)
Show full opinionHide full opinionStockchase Research Editor: Michael O'Reilly MRK is one of the largest pharma companies in the world. It trades at a 13 PE compared to 22 PE for the S&P500. The pandemic has slowed some elective procedures, and that has slowed sales in the latest quarter by about 9%. However, management still opted to raise its 2020 guidance showing confidence that things should improve for the balance of the year. The company also has three drugs moving through various COVID-19 vaccine test trials. It pays a good yield, backed by a 58% payout ratio. We would buy this with an upper target towards $96 as the first objective and use $77 as a stop-loss. Yield 2.95% (Analysts’ price target is $95.94)
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TOP PICK
September 29, 2020
Stockchase Research Editor: Michael O'Reilly In the search for a pandemic vaccine, JNJ is a potential winner. Leveraging off their proven technology with their Ebola, HIV and other vaccines, the company continues to develop a COVID-19 vaccine that presently shows strong immunity response in 99% of trials. It is also the only option that is testing a single-dose vaccine. Revenues have dipped 10% in the latest quarterly earnings, but that can be attributed to a slow down in elective procedures. It pays a good dividend backed by a 67% payout ratio. We would trade this with a stop-loss at $132. Yield 2.75% (Analysts’ price target is $165.06)
Show full opinionHide full opinionStockchase Research Editor: Michael O'Reilly In the search for a pandemic vaccine, JNJ is a potential winner. Leveraging off their proven technology with their Ebola, HIV and other vaccines, the company continues to develop a COVID-19 vaccine that presently shows strong immunity response in 99% of trials. It is also the only option that is testing a single-dose vaccine. Revenues have dipped 10% in the latest quarterly earnings, but that can be attributed to a slow down in elective procedures. It pays a good dividend backed by a 67% payout ratio. We would trade this with a stop-loss at $132. Yield 2.75% (Analysts’ price target is $165.06)
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TOP PICK
September 29, 2020
Focused on single-family rental homes in US and multi-family apartments in Toronto. The latter class has benefitted from the work-from-home trend as well as millennials looking for more space as they start families. Offers affordable middle-market homes at lower rents than high-rise apartment buildings. Still trades at a discount to NAV despite at a 98% occupancy. Loves management and its capital allocation plan. (Analysts’ price target is $2.28)
Show full opinionHide full opinionFocused on single-family rental homes in US and multi-family apartments in Toronto. The latter class has benefitted from the work-from-home trend as well as millennials looking for more space as they start families. Offers affordable middle-market homes at lower rents than high-rise apartment buildings. Still trades at a discount to NAV despite at a 98% occupancy. Loves management and its capital allocation plan. (Analysts’ price target is $2.28)
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TOP PICK
September 29, 2020
He's one of the biggest owners of this. They operate in the US sunbelt, like Dallas and Austin where the population is outpacing the country. A good operator. They offer growth and stability. Rents are affordable to target the middle market. Pays a good yield. Trades at a discount to NAV.
Show full opinionHide full opinionHe's one of the biggest owners of this. They operate in the US sunbelt, like Dallas and Austin where the population is outpacing the country. A good operator. They offer growth and stability. Rents are affordable to target the middle market. Pays a good yield. Trades at a discount to NAV.
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TOP PICK
September 29, 2020
Price target: 1.57 pounds Dublin becoming a tech hub and there's a housing shortage, so rents have been doubling there where North America has rent control. CAP REIT formed this years ago. Ireland has been a tax haven for foreign tech companies, so Ireland should benefit when these foreign workers return here.
Show full opinionHide full opinionPrice target: 1.57 pounds Dublin becoming a tech hub and there's a housing shortage, so rents have been doubling there where North America has rent control. CAP REIT formed this years ago. Ireland has been a tax haven for foreign tech companies, so Ireland should benefit when these foreign workers return here.
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September 28, 2020
It is the dominant dollar store in the US. They feel they can add a thousand stores a year for the next decade or more. The ROI on these stores is two years. It is a growth story. (Analysts’ price target is $222.76)
Show full opinionHide full opinionIt is the dominant dollar store in the US. They feel they can add a thousand stores a year for the next decade or more. The ROI on these stores is two years. It is a growth story. (Analysts’ price target is $222.76)
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TOP PICK
September 28, 2020
The dominant health insurance company in the US. It is the first one to integrate the pharmacy, benefits and insurance payer all into one. They are generating a lot of good will during COVID. (Analysts’ price target is $344.96)
Show full opinionHide full opinionThe dominant health insurance company in the US. It is the first one to integrate the pharmacy, benefits and insurance payer all into one. They are generating a lot of good will during COVID. (Analysts’ price target is $344.96)
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TOP PICK
September 28, 2020
Own the designer of the chips rather than the cell phone. If you want to be in the tech space, this is the one. (Analysts’ price target is $398.55)
Show full opinionHide full opinionOwn the designer of the chips rather than the cell phone. If you want to be in the tech space, this is the one. (Analysts’ price target is $398.55)
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September 25, 2020
Natural gas focus and infrastructure assets that are contracted on a long-term basis makes this a good opportunity. The dividend is well-covered on a sustained basis. Energy demands is poised to rise for a little while. It should return to pre-covid levels eventually. A quality company. (Analysts’ price target is $39.36)
Show full opinionHide full opinionNatural gas focus and infrastructure assets that are contracted on a long-term basis makes this a good opportunity. The dividend is well-covered on a sustained basis. Energy demands is poised to rise for a little while. It should return to pre-covid levels eventually. A quality company. (Analysts’ price target is $39.36)
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TOP PICK
September 25, 2020
The renewable energy transition is very positive. We have growing energy demand that needs to offset the growth even before replacing existing energy supplies. They have a big presence in the US. They just signed an agreement with Chevron to off-set carbon emissions. (Analysts’ price target is $20.50)
The renewable energy transition is very positive. We have growing energy demand that needs to offset the growth even before replacing existing energy supplies. They have a big presence in the US. They just signed an agreement with Chevron to off-set carbon emissions. (Analysts’ price target is $20.50)
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TOP PICK
September 25, 2020
You have to endure a little more volatility with the preferred shares. This preferred share does reset. It has a floor at the current dividend levels, which means it can only go up. If there is an inflation response, it will participate in that.
Show full opinionHide full opinionYou have to endure a little more volatility with the preferred shares. This preferred share does reset. It has a floor at the current dividend levels, which means it can only go up. If there is an inflation response, it will participate in that.
TOP PICK
TOP PICK
September 25, 2020
Billy Kawasaki’s Insights - Picks from 5i Research. A fund that is all equity so there is some market risk. It is large and liquid, offering a global exposure. 40% of assets are in the US, with 29% in Canada. There is no dividend withholding tax if in an RRSP. Unlock Premium - Try 5i Free
Billy Kawasaki’s Insights - Picks from 5i Research. A fund that is all equity so there is some market risk. It is large and liquid, offering a global exposure. 40% of assets are in the US, with 29% in Canada. There is no dividend withholding tax if in an RRSP. Unlock Premium - Try 5i Free
TOP PICK
TOP PICK
September 24, 2020
Stockchase Research Editor: Michael O'Reilly We are being rewarded for our patience and are making MMM a Top Pick following a recent pullback in the stock. As previously reported, the maker of the N95 masks has been in the spot light as they have directly been keeping front line workers safer during the pandemic. For 2020 they expect to have produced 2 billion of the masks and continue to partner with the US Department of Defense. The company is mulling over selling the food safety business for $3.5 billion -- 10 times annual revenues of the segment. The segment contributed 1% of total sales in 2019. Their health care segment is expected to pick up as well, after seeing a 12% yoy slowdown, as delays in elective procedures are removed. It has an attractive yield that is backed by a payout ratio of 65% of cash flow. We look for this to test $185 and would use $149 as a stop-loss. Yield 3.69% (Analysts’ price target is $166.47)
Show full opinionHide full opinionStockchase Research Editor: Michael O'Reilly We are being rewarded for our patience and are making MMM a Top Pick following a recent pullback in the stock. As previously reported, the maker of the N95 masks has been in the spot light as they have directly been keeping front line workers safer during the pandemic. For 2020 they expect to have produced 2 billion of the masks and continue to partner with the US Department of Defense. The company is mulling over selling the food safety business for $3.5 billion -- 10 times annual revenues of the segment. The segment contributed 1% of total sales in 2019. Their health care segment is expected to pick up as well, after seeing a 12% yoy slowdown, as delays in elective procedures are removed. It has an attractive yield that is backed by a payout ratio of 65% of cash flow. We look for this to test $185 and would use $149 as a stop-loss. Yield 3.69% (Analysts’ price target is $166.47)
TOP PICK
TOP PICK
September 24, 2020
Stochchase Research Editor: Michael O'Reilly PFE is a defensive Top Pick that pays a strong yield, with history of dividend growth and a strong balance sheet. It is one of the world's leading pharmaceutical companies with a robust pipeline of new products in development (targeting 25 new drugs to market by 2025). They are partnering to develop a COVID-19 vaccine that is now in stage 2/3 testing and has a contract with the US government for $1.95 billion for the first 100 million doses if successful. The company holds $1.8 billion in cash reserves. The yield is strong and is supported with a 58% payout ratio. We would buy this using a $31 stop-loss, looking for a return towards $42. Yield 4.22% (Analysts’ price target is $41.79)
Show full opinionHide full opinionStochchase Research Editor: Michael O'Reilly PFE is a defensive Top Pick that pays a strong yield, with history of dividend growth and a strong balance sheet. It is one of the world's leading pharmaceutical companies with a robust pipeline of new products in development (targeting 25 new drugs to market by 2025). They are partnering to develop a COVID-19 vaccine that is now in stage 2/3 testing and has a contract with the US government for $1.95 billion for the first 100 million doses if successful. The company holds $1.8 billion in cash reserves. The yield is strong and is supported with a 58% payout ratio. We would buy this using a $31 stop-loss, looking for a return towards $42. Yield 4.22% (Analysts’ price target is $41.79)
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TOP PICK
September 24, 2020
Stochchase Research Editor: Michael O'Reilly As the pandemic appears to be heading towards wave two, take-out vendors will continue to benefit. PZZA has done well thus far, with recently reported revenues rising by 15% over the year and sales up 28%. We recommend picking up this Top Pick with an eye to return return to $100 -- nearly a 20% return-- using $72 as stop-loss. Yield 1.05% (Analysts’ price target is $106.21)
Show full opinionHide full opinionStochchase Research Editor: Michael O'Reilly As the pandemic appears to be heading towards wave two, take-out vendors will continue to benefit. PZZA has done well thus far, with recently reported revenues rising by 15% over the year and sales up 28%. We recommend picking up this Top Pick with an eye to return return to $100 -- nearly a 20% return-- using $72 as stop-loss. Yield 1.05% (Analysts’ price target is $106.21)
TOP PICK
TOP PICK
September 24, 2020
Raised dividend for 57 years. Nice balance between drug business, consumer products, and diagnostics. Likely to see acquisitions in consumer and diagnostics. A beneficiary of the post-Covid environment. Long-term exposure to a global healthcare leader. Good valuation. Continued performance. Yield is 2.08%. (Analysts’ price target is $163.63)
Show full opinionHide full opinionRaised dividend for 57 years. Nice balance between drug business, consumer products, and diagnostics. Likely to see acquisitions in consumer and diagnostics. A beneficiary of the post-Covid environment. Long-term exposure to a global healthcare leader. Good valuation. Continued performance. Yield is 2.08%. (Analysts’ price target is $163.63)
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TOP PICK
September 24, 2020
Structural growth story for 3-5 years. Great exposure in US, with growing international presence. Really likes management. Healthy dividend that has grown at 9%. Yield is 2.09%. (Analysts’ price target is $39.11)
Show full opinionHide full opinionStructural growth story for 3-5 years. Great exposure in US, with growing international presence. Really likes management. Healthy dividend that has grown at 9%. Yield is 2.09%. (Analysts’ price target is $39.11)
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TOP PICK
September 24, 2020
Attractive entry point. Likes exposure to semis and consumer electronics. A world class business at a discounted price. Dividend has grown at 27% for the last 10 years. Asia is oversold, and so is best positioned for a post-Covid recovery. Yield is 2.41%. (Analysts’ price target is $1571.10)
Show full opinionHide full opinionAttractive entry point. Likes exposure to semis and consumer electronics. A world class business at a discounted price. Dividend has grown at 27% for the last 10 years. Asia is oversold, and so is best positioned for a post-Covid recovery. Yield is 2.41%. (Analysts’ price target is $1571.10)
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TOP PICK
September 23, 2020
Best in class. Rock solid balance sheet, outstanding leadership. Great investment banking, large digital presence. Well capitalized. Good valuation. Dividend sustainable. Election outcome won't have a negative impact. Yield is 3.82%. (Analysts’ price target is $114.86)
Show full opinionHide full opinionBest in class. Rock solid balance sheet, outstanding leadership. Great investment banking, large digital presence. Well capitalized. Good valuation. Dividend sustainable. Election outcome won't have a negative impact. Yield is 3.82%. (Analysts’ price target is $114.86)
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TOP PICK
September 23, 2020
Huge chunk of US retail deposits. Fantastic investment banking francise. CEO has done well navigating problems. Well capitalized. Trading at 0.8% of book value. Compelling opportunity. Exceptionally well run. Default rates not that bad. Growth is happening. Dividend sustainable. Election outcome won't have a negative impact. Yield is 3.01%. (Analysts’ price target is $27.77)
Show full opinionHide full opinionHuge chunk of US retail deposits. Fantastic investment banking francise. CEO has done well navigating problems. Well capitalized. Trading at 0.8% of book value. Compelling opportunity. Exceptionally well run. Default rates not that bad. Growth is happening. Dividend sustainable. Election outcome won't have a negative impact. Yield is 3.01%. (Analysts’ price target is $27.77)
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TOP PICK
September 23, 2020
Likes the deal with Reliance, the cell phone operator in India. Will drive further revenue growth. Moving full-on with e-commerce in India. Will provide attractive mediums for businesses to attract consumers. Great long-term hold. No dividend. (Analysts’ price target is $288.00)
Show full opinionHide full opinionLikes the deal with Reliance, the cell phone operator in India. Will drive further revenue growth. Moving full-on with e-commerce in India. Will provide attractive mediums for businesses to attract consumers. Great long-term hold. No dividend. (Analysts’ price target is $288.00)
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TOP PICK
September 23, 2020
Billy Kawasaki’s Insights - Picks from 5i Research. Management has proven themselves with a solid historical performance. They are long term holders and builders of businesses. Cash flow is good and they have turned a profit every year for the last 20 years. Unlock Premium - Try 5i Free
Billy Kawasaki’s Insights - Picks from 5i Research. Management has proven themselves with a solid historical performance. They are long term holders and builders of businesses. Cash flow is good and they have turned a profit every year for the last 20 years. Unlock Premium - Try 5i Free
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TOP PICK
September 22, 2020
Stockchase Research Editor: Michael O'Reilly eCommerce trade has benefitted during the pandemic and this is one of the major companies that delivers the goods. UPS just received an upgrade by analysts at Credit Suisse,. It is a defensive holding that continues to see revenues growing by double-digits. It pays a good dividend backed by a decent payout ratio. The technical chart is setting up for another push higher. We would trade this with a stop-loss at $145. Yield 2.51%
Show full opinionHide full opinionStockchase Research Editor: Michael O'Reilly eCommerce trade has benefitted during the pandemic and this is one of the major companies that delivers the goods. UPS just received an upgrade by analysts at Credit Suisse,. It is a defensive holding that continues to see revenues growing by double-digits. It pays a good dividend backed by a decent payout ratio. The technical chart is setting up for another push higher. We would trade this with a stop-loss at $145. Yield 2.51%
TOP PICK
TOP PICK
September 22, 2020
Stockchase Research Editor: Michael O'Reilly NOC is a security company providing products like autonomous systems and cybersecurity and it operates in the US, Asia-Pacific and internationally. It has over $70 billion in backlog orders, which are principally with government agencies like the US Defense department. Recent earnings were up 19% with a 53% increase in free cash flow and the company increased its earnings guidance. We would trade this with a stop-loss at $295. Yield 1.78% (Analysts’ price target is $393.18)
Show full opinionHide full opinionStockchase Research Editor: Michael O'Reilly NOC is a security company providing products like autonomous systems and cybersecurity and it operates in the US, Asia-Pacific and internationally. It has over $70 billion in backlog orders, which are principally with government agencies like the US Defense department. Recent earnings were up 19% with a 53% increase in free cash flow and the company increased its earnings guidance. We would trade this with a stop-loss at $295. Yield 1.78% (Analysts’ price target is $393.18)
TOP PICK
TOP PICK
September 22, 2020
Stockchase Research Editor: Michael O'Reilly With the recent pullback from $150 highs, this is a good opportunity to enter. Rising revenues, profit margins and EPS are propelling this company, which has been an essential service provider during the pandemic. As retail bankruptcies rise in the US, there is a growing gap for WMT to fill. Dividends have grown for 47 consecutive years and are backed by a 34% payout ratio. We would buy this with a stop-loss at $120. Yield 1.58% (Analysts’ price target is $145.88)
Show full opinionHide full opinionStockchase Research Editor: Michael O'Reilly With the recent pullback from $150 highs, this is a good opportunity to enter. Rising revenues, profit margins and EPS are propelling this company, which has been an essential service provider during the pandemic. As retail bankruptcies rise in the US, there is a growing gap for WMT to fill. Dividends have grown for 47 consecutive years and are backed by a 34% payout ratio. We would buy this with a stop-loss at $120. Yield 1.58% (Analysts’ price target is $145.88)
TOP PICK
TOP PICK
September 22, 2020
The AGM is tomorrow. They provide e-commerce software to big companies like Sobey's, just like Shopify does for smaller ones. Also, they enable suppliers to bid on government contracts; MDF just won a big contract in this business in the UK. 80% of their sales are recurring, but it trades at only 1.5x recurring revenues vs. 30-40x among peers. A no-brainer. You will do extremely well with this. Investors associate MDF with its hodge-podge of accumulated internet platforms over years, but new managers are focusing on their winning core platforms. He expects new contract coming, helped by the online trend. (Analysts’ price target is $8.85)
The AGM is tomorrow. They provide e-commerce software to big companies like Sobey's, just like Shopify does for smaller ones. Also, they enable suppliers to bid on government contracts; MDF just won a big contract in this business in the UK. 80% of their sales are recurring, but it trades at only 1.5x recurring revenues vs. 30-40x among peers. A no-brainer. You will do extremely well with this. Investors associate MDF with its hodge-podge of accumulated internet platforms over years, but new managers are focusing on their winning core platforms. He expects new contract coming, helped by the online trend. (Analysts’ price target is $8.85)
