Full episode: Market Call Tonight for Thursday, October 17, 2019
Gordon Reid, president and CEO of Goodreid Investment Counsel
Focus: U.S. equities
Investors should be careful not to confuse the current political turmoil with market turmoil. Market history clearly demonstrates that political rhetoric, the party in power and even an impeachment process fail to impact market performance in a direct or meaningful way. While the equity market is “long in the tooth” and valuations are full, there are identifiable areas of opportunity. The U.S. consumer is in solid shape, a carryover from the 2008/2009 experience. Innovation is driving productivity and damping inflation. Be measured and prudent. Review your financial investments to ensure appropriate asset mix, constructive internal hedges and stock ownership driven by catalysts.
EMCOR GROUP (EME:UN)
Latest purchase on September 2019 at $86.
Emcor is a facilities service company performing mechanical, electrical and construction functions. Positives include a strong balance sheet, a growing backlog, its domestic focus (95 per cent of revenue is from U.S.) and a growing need for large domestic infrastructure projects. At 15 times earnings and sporting a 7 per cent free cash flow yield, Emcor represents good value.
Latest purchase on September 2019 at $181.
Mobile advertising is the foundation of growth for Facebook. Their social networking offerings are highly coveted, reach billions of consumers and benefit as the hardware and software ecosystems steadily develop. The stock has become quite attractive as it’s been the target of critics, but Facebook has grown into its valuation, currently at about 22 times this year’s earnings.
Latest purchase on September 2019 at $118.
Walmart, under the stewardship of Doug McMillon has been making strategic investments over the past few years which are beginning to bear fruit. Their e-commerce presence is impressive, with roughly equal share to Amazon in the grocery space. Flipkart, their Indian e-commerce initiative is gaining traction. Look for earnings per share to grow strongly in the coming years.
PAST PICKS: OCT. 3, 2018
- Then: $72.36
- Now: $69.60
- Return: -4%
- Total return: -1%
LEAR CORP. (LEA:UN)
- Then: $150.75
- Now: $119.39
- Return: -21%
- Total return: -19%
WASTE MANAGEMENT (WM:UN)
- Then: $89.51
- Now: $116.28
- Return: 30%
- Total return: 32%
Total return average: 4%