Full episode: Market Call for Wednesday, June 17, 2020
Gordon Reid, president and CEO of Goodreid Investment Counsel
Focus: U.S. equities
The dramatic move off the March lows came out of nowhere and seems like it’s disconnected from reality. Goodreid took advantage of the market advance to sell some issues tactically into the rally and will deploy cash raised when pullbacks occur. We have adopted a barbell approach between growth and value. This is a time to be measured and cautious: Rather than making bold bets, win by not losing.
JPMORGAN CHASE & CO (JPM NYSE)
Latest purchase on June 2020 at $101.
Arguably the highest quality bank in the U.S., JPMorgan is trading at a modest premium to book value, an opportunity for long-term investors. Shares may be volatile over the short term, but once the impact of COVID-19 on the economy becomes clearer, expect these shares to rally.
PIPER SANDLER COMPANIES (PIPR NYSE)
Latest purchase on March 2020 at $48.
The re-branded Piper Jaffray purchased Sandler O’Neill in the early part of the year, fortifying their position as an investment banking concern. Goodreid expects a continuation of capital markets activity later this year and the next due to activity caused by the current economic disruption. Strong cash flow, an attractive dividend and excellent valuation metrics bode well for the stock price.
RAYTHEON (RTX NYSE)
Latest purchase on June 2020 at $65.
As the clouds clear, this powerhouse industrial will likely be rewarded for their earnings power and ability to produce large amounts of cash. In the meantime however, the company will have to traverse the issues caused by the shutdown in commercial air travel. Their defense business is robust and will be a stabilizing factor for investors.
PAST PICKS: MAY 30, 2019
CHARLES RIVER LABS (CRL NYSE)
- Then: $125.71
- Now: $180.64
- Return: 44%
- Total return: 44%
ALPHABET (GOOG NASD)
- Then: $1121.41
- Now: $1440.38
- Return: 28%
- Total return: 28%
MCDONALD'S (MCD NYSE)
Sold on April 29, 2020 at $183.
- Then: $199.24
- Now: $192.34
- Return: -3%
- Total return: -1%
Total return average: 24%