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Stock Pick For 2018


AzCactus
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Well I think that puts are looking attractive on most things. I am in particular looking at getting puts on large positions that that have had a large run up but I also like but don't want to sell or can't. Things like BRK, WFC, MGA, etc. Since insurance is really cheap at this time I think it makes sense to pick up some in order to protect gains that have been made. Clearly a defensive posture on my part but hey, a dollar not lost is kinda like a dollar made right?

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I'm finding value in small/micro cap commodity/energy stocks.

 

Two that trade below 2x FTM EV/EBITDA are GCM.TO and ASND.TO. The former being a gold company in Colombia and the latter being zinc in Honduras. Both are growing and will be free cash flow positive next year at current commodity prices.

 

On the energy side, PPR.TO, trades at closer to 4x EV/EBITDA but have giant catalysts worth potentially more than the EV of the company in a NAFTA lawsuit (that has already had its arbitration hearing) and legalization of Quebec Shale development where they have huge acreage but have booked zero reserves.

 

Perhaps a third each for one 2018 pick!

 

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Added to BG Mlp SEP today. This is essentially an equity bond. I also like BWP in the same space for around. $13, since they do in excess of $2 per unit in DCF. This is owned by L and I can’t for the life of me figure out, why they haven’t taken out their limited partners.

 

Spekulatius, what exactly is this BG Mlp SEP?  I'm also seeing a lot of MLPs in that high single digit distribution yield range

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You asked about stock picks for 2018 so this may not be appropriate but I'm looking at protecting downside for the upcoming year.

 

We don't make money by buying into a rosy consensus & I believe healthcare presents a lot of possibilities for the next 10 to 20 years, without all the good cheer by market participants.

 

I'm around 1/3 healthcare:

 

3% ABC (trimmed a bit 4 a gain as I believe they're the most threatened in the long term by Amazon)

3.9% BBH (covers biotech biggies which I'm unqualified to look at but want exposure to)

4.6% CVS

6.8% DVA

7.1% EW (owned 4+ years)

6.8% NVO (owned a bit over a year & plan on owning 4 the next decade)

 

I believe CVS will look ugly in the short term due 2 the AET deal but that they could emerge as a the 1st healthcare superstore by taking high margin / low delivery cost biz away from existing providers (hospitals, etc.)

 

Work space is abundant (4 more Minute Clinics) but staffing up will be a constraint for CVS.

(if they even execute on this.)

 

---

 

Overall, long term bullish on healthcare, consumers & Berkshire (short term, no ideas.)

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I am adding a bit more of TWX. Think even if deal doesn't go through, downside is limited.

I also like pnc, which holds a lot of  blackrock stock. It should benefit from the tax cut (large unrealized capital gain) and easier banking regulations.

 

Also, loading up on ibonds. As much as I could (the maximum 50k :)

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