Gordon Reid is president & CEO of Goodreid Investment Counsel. His focus is on U.S. equities.
In an effort to create arguments to support the reasons for a drop in Apple’s stock price, some have pointed to fundamental weakness in its operations – a mistake, in Goodreid’s opinion. Apple’s stock is in a momentum-led down draft that began with U.S. tax selling and has been exacerbated by general selling by shareholders who lack conviction. (Latest purchase: November, 2012 @ $508.)
United Therapeutics Corp.
A strong portfolio and active pipeline have led to excellent results for this biotech company. However investors are cautious, creating a compelling valuation which has significant upside potential while providing a floor to the stock price. (Latest purchase: December 2012 @ $50.)
Recent events at Walgreen have led investors to be cautious but Goodreid believes that the resolution of the Express Scripts contract, the cost savings and synergies to be achieved with their acquisition of Boots in the U.K. and a strong management team will lead Walgreen’s valuation back to its historical level of about 14 times earnings from the current 12 times. (Latest purchase: November 2012 @ $32.)
Total return: +16.61 per cent
Total return: +16.27 per cent
Total return: +40.12 per cent
Total return average: +24.33 per cent
The U.S. equity market has quietly worked higher against a backdrop of negative and disconcerting macro developments, a very positive indicator. Interest rates and corporate profits are solidly bullish and if psychology improves to even a neutral position the equity market has significant upside.