Just for fun: what are some of your 1 year forecasts? (you don’t have to have a position, just an opinion/forecast). We’ll check back in a year to see which ones worked out. Here are mine. I only follow mid-large cap US stocks. My SPX 1-year expectation is 2500 (barring any exogenous shock like impeachment or North Korea doing something dumb, I don’t think a big sell-off is coming in a year). Amazon/Tesla: I have no idea what valuation models are used (or what people are smoking) to get these to $1000 and $350/share respectively, specially in the case of Tesla. I think the next market-wide correction will take drag these down to earth (similar to what happened during the Feb 2016 oil sell-off). Macy’s: Tough times call for industry-wide consolidation (similar to airlines 10 years ago). Macy’s (and retail in general) is risky, but its cash flow is good and barring further declines in sales will be enough to support the current 7% div yield. These guys are improving their online presence, which coupled with their real estate value, could eventually take the stock up past $30. Shell (ADR)/Chevron/Exxon: I’m bullish on oil, at least over the next few years. Oil moved back to mid 40s recently but these stocks held their own. All it’ll take is one big inventory draw to get oil past $50 again. All of these are high yield stocks with good scope for appreciation. Activision: I actually held Activision at $35 and sold at $46 thinking it’s the end of the run. It was one of my best trades recently (and also one of the worst because I gave up too early). But now I think it’s too expensive and very vulnerable to a sell-off. It’d still be a good long-term hold because of its solid gamer/customer base, brand loyalty, and lack of competition. JP Morgan: Last year JPM was trading at $60 even though everyone knew rate hikes were coming. I was actually studying the efficient market hypothesis at the time for level 1 and realized that even with rational expectations, the market lags in correctly pricing certain stocks. JPM rallied almost 40% to the $90s. With more hikes coming, I don’t think JPM is done rallying closer to and past $100. Valeant Pharma (Highly Speculative): This is almost gambling, but Valeant has been priced for bankruptcy and IF it meets its debt obligations and proves to be a viable going concern, the upside could be large enough to justify the risk.
this is a good topic so i’ll contribute, hopefully others do so as well
AAPL - everyone knows this co. but as a quick summary, it sells mostly phones and everyone is waiting on the release of iphone 8. supposedly prices will be higher so expect margin expansion. i think i read somewhere that their growth long term is around 5%/year vs 10% in the last 5 years. Currently trading at ~15x FCF. historically it trades at 10x to 15x. If demand for iphone 8 does pick up or margins expand due to higher prices, this company will prolly kill it.
on the cos you mentioned, i dont like any of them as they are all either expensive, have a ton of debt, or in industries i dislike. if i had to choose i prolly would go activision for the very reasons you think they are a long term hold, but i do hate the price. It trades at a 21x FCF multiple. but their growth has been consistently in the double digits. i’d consider buying around $40.