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A lot of people won't give you actual suggestions. I will. I'll offer my opinion. All of these are meant to be held for years, not played short-term. Square (S
by adventured 7y ago
A lot of people won't give you actual suggestions. I will. I'll offer my opinion. All of these are meant to be held for years, not played short-term.
Square (SQ) as close to $30 or under as you can get. I was buying today below $35. I'll keep buying if it wants to keep going down. At a $14-$15 billion market cap, it was a comical steal to hold long-term. It's a future $100b market cap company.
Pinterest (PINS) here (below ~$12), to be held for a minimum of five years.
Grab some financials, the stronger companies. These are not going to collapse, short of the US collapsing. They're classic too big to let fail. They survived the great recession, the Fed will inject whatever it has to in order to prop them up. I'd suggest a basket of JPM, WFC, BAC, GS, MS.
IBM (IBM). Below $100 ideally. Their future will be brighter with the new management and they're trading for 9-10 times earnings with a good dividend. It was cheap before the crash, it's very cheap now.
Micron (MU), particularly if you can grab it below $30.
Beyond Meat (BYND). I like their valuation at this point, it has been crushed. They've demonstrated strong operational controls on costs and they have plenty of cash. I think they'll be fine coming through this.
I'd like to suggest Cloudflare (NET), I don't love their valuation here though, it hasn't gotten beaten down enough. It was briefly down a few days ago, but it's back up again. If you can get it below ~$15-$16, I like it there for a long-term hold.
Buy some silver (small position), however you prefer to go about that. The recent shock plunge is an opportunity to be taken advantage of. The same is true about a few other commodities. People are in panic mode, dumping most everything.
Luckin Coffee (LK). Big coin flip on the situation in China and the physical space in general with the virus. However, if they survive (presently burning plenty of red ink) they have a decent shot at being the Starbucks of China. They raised some capital in January, they'll certainly need it. It had held up well, but cracked today and dropped 13%, rolling back to November's prices. Stalk it for the low $20s or below.
Medifast (MED). To be held for several years minimum.
In the energy industry, Schlumberger (SLB) maybe. Their valuation has gotten very tempting here. $36 to $12 in a month. I don't like most of the energy industry, including XOM, CVX, much less OXY or APA or CLR. It's an amazing double smashing, from Covid and the oil war.
John Deere (DE) is getting close to interesting. I'd like it below $100. $180 to $106 in the past month, it's getting there. I like them a lot more than companies such as Caterpillar (CAT) or 3M (MMM).
iRobot (IRBT) has my attention here. They got hammered first from the China trade war concerns previously, then later from Covid as China went down. Their most recent quarter had popped the stock, until they got smacked again by Covid. I might like it below $30 at this point, we'll see if it gets there in the coming days or weeks. Plenty of competitive risks with the company, however the value proposition is very interesting now (below one times 2019 sales, 11x operating income).
Companies to avoid: retailers (too much risk, not enough upside); airlines (who knows what's about to happen to them); the classic FAANGS etc (AAPL, NFLX, GOOGL, MSFT, AMZN, FB - they haven't gotten cheap enough yet to warrant buying); avoid Tesla, GM, Ford; I don't like UBER or LYFT here; I don't like PayPal, Visa or Mastercard, they were all stupidly overvalued before and still are; I dislike Shopify, they're worth $60-$80 / share, trading for $336. At current valuations, I'd avoid Intel, AMD, Cisco, Oracle, nVidia and numerous other larger tech companies (not beaten down enough). I don't like most of the classic bluechips at all here, including KO, JNJ, PG, XOM, MCD, CVX, PFE, PEP, MMM, and so on, they're just not cheap enough. Give me MCD at a ~9 PE ratio and I'll consider it. I'd avoid the telecoms, including T-Mobile, AT&T, Verizon, Comcast, not cheap enough vs growth (plus I just plain dislike them as investments, unless they're being given away), they haven't been pounded in this. I don't like a lot of the more recent class of tech stocks, the Workday generation, their valuations aren't crushed enough (stocks like Twilio, ServiceNow, Splunk, Atlassian, etc) and most are either bleeding red ink or barely making money along with having extreme valuations (most still have the bulk of their epic gains from years of running).
Delta (DAL) and Southwest (LUV) would both be interesting to track on an intricate basis (you have to stay on top of every little detail about what's happening to them and the industry here). DAL is trading for three times 2019 earnings now, LUV is at eight times. If they're going to remain independent, survive and get back to normal (whether it takes two years or five etc), this is a steal, and their stock prices will plausibly go lower yet. I'd stalk them for a cheaper entry yet if I were going to bother.
And if I had Berkshire's $130 billion in cash, I'd eat Kraft Heinz, refurbish Kraft, keep Heinz for myself, and then spin Kraft off or sell it in a few years to a peer in the segment. Most companies in that segment aren't worth touching here though (that includes KHC), not unless they get a lot cheaper yet.
- n13 7y agoThanks that's very helpful. Alas! You don't have any contact info in your profile.
- adventured 7y agoI can be contacted at: adventuredhn20 [at] protonmail.com
- sytelus 7y agoI think AMZN and FB will be few of the companies that would have killer quarterly earnings.
- adventured 7y agoAmazon retail's profits are a modest share of Amazon's value. The stock could get some action from people that don't understand what makes up the large bulk of their market cap at this point (AWS & ads). The problem is it's hyper valued here, even after the decline. It has a long ways to fall if investors decide to apply a more reasonable valuation to its income (even a slightly more reasonable valuation, like 50 times earnings instead of 70 or 80). Basically so what if they earn an extra $1 or $3 billion in profit in the quarter from retail (it'll be a temporary surge anyway), it's almost meaningless vs $910b in market cap, doesn't move the needle much. Plus, on Amazon, watch for a spending hammer against AWS and its growth. You might see a severe slowdown for several quarters (eg growth cut in half or worse), which will trivially destroy anything positive out of retail in regards to optimism. Business spending is going to get hit pretty hard for a while. Costco for example, I wouldn't go anywhere near the stock, despite the way it has held up. Who knows if we're going to see serious supply problems next (which will get them from another angle, rather than demand side as with many businesses in this environment). If we see much of a supply crunch, it'll take back anything positive retailers see short-term from the demand surge. The market is (properly) worried about a big thrashing to the ad market in the US, due to business going into the freezer. Businesses of all sizes are going to pull their ad spending - some as a part of survival mode (cash conservation) and some as a shift to being more cautious on spending in general for a while - at some point if this continues for very long (I'd expect weaker businesses have already begun pulling their ad spending). It's why Pinterest took a hard dive (ad spend worries), despite people sitting at home in quarantines screwing around online.