What are you buying today?

[ander]

FRFHF

[rb]

EQR, REI.UN-T. I'm with pupil!

[Viking]

T.to

 

Also own BCE.to and SJR-b.to

 

Canadian Telecom looks reasonably valued; good dividend yields; safe payouts

————-

 

Also buying Canadian $ (selling US$)

 

7 or 8 years ago i moved 90% of my portfolio from Canadian $ to US$ (when currencies were close to par). It was not a currency trade... simply the result of me finding better opportunities investing in US companies.

 

I have been holding very large cash balances and leaving the cash in US$. Earlier this year i decided to start shifting back to Canadian $ to lock in some very large gains. And i am now finding lots of Canadian stocks to buy (telecom, pipelines) so that is also a factor. Canadian banks also look tempting. Energy as well. Today i am about 55% US$ and 45% CAN$.

 

If we get a Blue wave and spending shoots up we may see US$ weakness moving forward. No idea, really.

 

Just wanted to lock in some nice gains and reduce the currency risk in my portfolio.

[rb]

Small position in Netapp (NTAP).  Still thinking about INTC, but haven't pulled the trigger yet.

 

rb summed up the Intel situation without actually talking about Intel. Somewhere in the Apple thread he said something along these lines. "It's a massive company, with generally solid products and a sticky business that is trading below 10x FCF. So I backed up the truck."

 

Sure, situation isn't apples to apples, and I don't want to speak for rb. But Intel is a massive company that produces competitive products and has solid entrenchment in multiple markets. As Spek said, the latest earnings report was actually pretty good. People love doom and gloom stories. Especially in the tech space. Apple wasn't going out of business and I highly doubt Intel will be out of business anytime soon.

 

Agreed.  I just think that we haven't reached the point of peak-pessimism yet, like AAPL in 2013.

I was thinking that about AAPL in Dec 2018 not 2013.

 

Now to be fair with you guys I don't have the same level of confidence in INTC as I did in AAPL or MSFT. I think AAPL and MSFT are way more straight forwards businesses so it's easier to make that call. But that may be because there's some tech stuff about micro conductors that I don't understand and not the company's fault. Historically speaking though when it has fallen behind Intel has ruthlessly caught up and then some. They did not care if they incarnated a mountain of money (i.e. one years earnings) but they did it.

 

On the personal side as someone that has owned AMD products I will say this: I will never buy an AMD product ever again in my life. Every time I had an AMD product there was

a problem with it. Never had a problem with an Intel product. Maybe things have changed at AMD but I don't care. I don't need the aggravation. When you have problem with a monitor it's clear you have a problem with the monitor. You chuck it out and get a new one. When you have a problem with a CPU you don't know you have a problem with the CPU you just get frustrated by a whole of a lot of stuff that happens to you.

[Spekulatius]

I agree with RB that INTC vs AAPL is a different situation, but then again no situation is exactly the same. INTC could well go wrong - they never get their process fixed, never decide to make a leap to TSM is that’s the case and get rolled over on the chip design side by Apple, and and NVDIA and the like.

This could well happen. However, if INTC works out, I bet earnings and earnings multiple will be higher I could see INTC trading at a 20x earning multiple again, in line with other semiconductor companies. That should yield a very nice return - probably a triple from current prices.

 

As of today, I bought some FAF, MO and added to RTX and some RHM.DE. Topped up NOC and LHX a little too.

[rb]

Spec, what are your feelings these days about HII and GD? They got beat up pretty good since we last talked about them.

[clutch]

I see INTC as more analogous to IBM than AAPL. Divesting some of their traditional business while trying to focus on the new up-and-coming business (datacenters for INTC, cloud/AI for IBM). The problem is that INTC does not really have a strong advantage in the new business, much like IBM. Also, the moat is eroding much like IBM. I'd be careful.

[rb]

I see INTC as more analogous to IBM than AAPL. Divesting some of their traditional business while trying to focus on the new up-and-coming business (datacenters for INTC, cloud/AI for IBM). The problem is that INTC does not really have a strong advantage in the new business, much like IBM. Also, the moat is eroding much like IBM. I'd be careful.

I don't think I would go there. INTC doesn't have an advantage in datacenter? INTC basically owns datacenter.

[Lance]

Added to AMCR, BTI, T, CVX, ENB, ESRT, VNO and WPM

 

Wrote puts on IEP

 

Thanks

Lance

[clutch]

I see INTC as more analogous to IBM than AAPL. Divesting some of their traditional business while trying to focus on the new up-and-coming business (datacenters for INTC, cloud/AI for IBM). The problem is that INTC does not really have a strong advantage in the new business, much like IBM. Also, the moat is eroding much like IBM. I'd be careful.

I don't think I would go there. INTC doesn't have an advantage in datacenter? INTC basically owns datacenter.

 

I meant going forward.

[ourkid8]

ATCO. I strongly believe the market is not seeing the significant earnings/capital allocation happening in this company.  Seaspan has a utilization of 98% and they continue to acquire ships at an ROE of 20%+.  On the last earnings call, the CFO guided us that APR's utilization will be low 80's from mid 60's last quarter with the addition of Mexicali.  If you also add the efficiencies that Atlas corp is driving in APR, this upcoming quarterly earnings should be pretty strong.   

[Spekulatius]

Spec, what are your feelings these days about HII and GD? They got beat up pretty good since we last talked about them.

 

I am not too keen on HII, they aren’t good operators and in addition to being lousy operators, what they are doing is not really technologically advanced work ( shipyard) and that’s where defense spending is going, imo. I had a small position, it reconsidered and sold out about flat.

GD is performing quite well and they seem to operate much better in business comparable to HII (Electric boat) and they are also doing some more technologically sophisticated work in other business lines.

[Viking]

BAM and SAP.TO

 

CAN$ (moved another 10% of my portfolio out of US$)

[BRK7]

NVEC - small cap ($225m mkt cap).  Consistent, after-tax net income margins of 45-55% year-after-year.  Dividend yield of 8.5% currently.  Nice, safe, boring, little Minnesota tech company.

 

wabuffo

 

Just took a quick look.  Looks great in terms of margins, and balance sheet.  But, then I discovered that 5-year revenue CAGR is -6%.  Is the business in secular decline?

[wabuffo]

Is the business is secular decline?

 

It's hard to say.  It makes specialized nanotechnology sensors that have very specific and defined applications in medical and industrial applications.  Its main markets are hearing aids, pacemakers, and various industrial uses.  While it's trying to innovate, I think its revenue trends follow these three markets.  Due to the pandemic, I think its pacemaker business was down quite a bit this summer (but is coming back as surgeries were deferred but not cancelled).  I think that unless one of its end customers gets out-innovated (say Abbott in pacemakers and NVEC loses business because Abbott loses business), it's probably a stable, annuity type of business.  But I'm not sure about that.

 

wabuffo

 

 

[KJP]

Sold Comcast, bought Altice USA.

[rkbabang]

Is the business is secular decline?

 

It's hard to say.  It makes specialized nanotechnology sensors that have very specific and defined applications in medical and industrial applications.  Its main markets are hearing aids, pacemakers, and various industrial uses.  While it's trying to innovate, I think its revenue trends follow these three markets.  Due to the pandemic, I think its pacemaker business was down quite a bit this summer (but is coming back as surgeries were deferred but not cancelled).  I think that unless one of its end customers gets out-innovated (say Abbott in pacemakers and NVEC loses business because Abbott loses business), it's probably a stable, annuity type of business.  But I'm not sure about that.

 

wabuffo

 

It looks like they are spending 14-15% of sales on R&D.  But this is a really tiny company.  They have only 46 employees!  I wonder how many of those are engineers and/or scientists?    Most chip companies have teams larger than that working on a single product.  That said their balance sheet is great, their margins are excellent.  It looks like they can keep paying this dividend for years if they want to.  I just bought a small position this morning.

 

[Cardboard]

QQQ Nov 6 puts.

 

It is highly risky since really short duration and many big tech guys report tonight.

 

My view is that there is a price for anything and techs have over-extended that boundary. The Microsoft experience of Tuesday following release does not seem to have sinked in with investors yet or not beating enough expectations.

 

We will see. Then we got the election next week which is not adding to certainty. No stimulus for now. Countries going into lockdown.

 

There has been a big boom from working from home but, now many layoffs are hitting multiple industries while government free money is drying out. Hard to see booming demand in coming months.

 

Cardboard

[Gregmal]

QQQ Nov 6 puts.

 

It is highly risky since really short duration and many big tech guys report tonight.

 

My view is that there is a price for anything and techs have over-extended that boundary. The Microsoft experience of Tuesday following release does not seem to have sinked in with investors yet or not beating enough expectations.

 

We will see. Then we got the election next week which is not adding to certainty. No stimulus for now. Countries going into lockdown.

 

There has been a big boom from working from home but, now many layoffs are hitting multiple industries while government free money is drying out. Hard to see booming demand in coming months.

 

Cardboard

 

I think this is pretty spot on. As we've otherwise previously discussed, I just dont have the conviction necessary to make a macro type directional bet like I did in early September, at the moment. But I think your read is on point. For one, tech is priced pretty richly. Two, covid now, is pressing again and forcing repeated behavior similar to the first go around which will increase enthusiasm about these names. However at the same time, its always darkest before the dawn and while covid seems to be "spiraling out of control" according to some, we are also closer than ever to a vaccine and by any stretch, likely this time next year it will be a non story. So with tech co's trading at obscene valuations, the first sight signals indicate further robust demand, but the mid duration outlooks much of this dissipating or reverting somewhat, bleeding out the enthusiasm seems likely. I own but am underweight MSFT. I really want to add. The numbers were excellent, but Im holding off for now.

[Spekulatius]

^ The problem with puts is if they are adequately priced? To me the prices paid right now seem very high, as you would expect with a VIX of ~36.

 

As mentioned before, the VIX never really got below 25 even in a steadily rising market. VIX 25 is a fairly high number, historically speaking.

[drzola]

Started a position in ATCO as I was th one who got the opening fill under $8.50 a share Nice eh!

[Gregmal]

QQQ Nov 6 puts.

 

It is highly risky since really short duration and many big tech guys report tonight.

 

My view is that there is a price for anything and techs have over-extended that boundary. The Microsoft experience of Tuesday following release does not seem to have sinked in with investors yet or not beating enough expectations.

 

We will see. Then we got the election next week which is not adding to certainty. No stimulus for now. Countries going into lockdown.

 

There has been a big boom from working from home but, now many layoffs are hitting multiple industries while government free money is drying out. Hard to see booming demand in coming months.

 

Cardboard

 

Nice start. QQQ's down about 1% a/h. As described, the MSFT experience indeed with FB, AMZN and AAPL. Google was super impressive but not really one of the stocks I view as having been put on steroids by the covid situation, so a bit different than some of the others.

[Spekulatius]

QQQ Nov 6 puts.

 

It is highly risky since really short duration and many big tech guys report tonight.

 

My view is that there is a price for anything and techs have over-extended that boundary. The Microsoft experience of Tuesday following release does not seem to have sinked in with investors yet or not beating enough expectations.

 

We will see. Then we got the election next week which is not adding to certainty. No stimulus for now. Countries going into lockdown.

 

There has been a big boom from working from home but, now many layoffs are hitting multiple industries while government free money is drying out. Hard to see booming demand in coming months.

 

Cardboard

 

Nice start. QQQ's down about 1% a/h. As described, the MSFT experience indeed with FB, AMZN and AAPL. Google was super impressive but not really one of the stocks I view as having been put on steroids by the covid situation, so a bit different than some of the others.

 

Well, it depends on when you bought them. The puts that I am looking at are still down significantly for the day, but bounced back a little after hours. If you bought them at the peak of today, then you are in the money.

[fareastwarriors]

Pgre and eqc

[kab60]

Bought some MO and BAM.

 

The secular tailwind for alt managers is just massive. I also follow Tikehau Capital in France closely, it's trading below the value of their balance sheet investments I believe and it's tiny compared to BAM while being run by founders.

 

MO is just a crazy good business, and I don't really understand the price other than it's not exactly ESG kosher. Fat and growing divy in a world of negative rates, and if inflation ever comes around you have an asset light business with pricing power. It's tempting to lever up like crazy and enjoy the spread, but there's no Buffett put unfortunately. If only they'd issue some debt at 1 pct. and buyback shares yielding 9 pct. plus, but instead of doing the obvious thing these dumb smucks rather light their capital on fire. Glad the old CEO is gone.