Daily roundup of research and analysis from The Globe and Mail’s market strategist Scott Barlow
Michael Batnick, director of research for New York-based Ritholtz Wealth Management, warned investors against overconfidence in It Gets Harder From Here,
“We’ve had bear markets before, but we’ve never had this type of rally in such a short period of time … If you feel like this is easy, check yourself. Do not get out over your skis. This has been a favorable environment for stocks and for raising money, and for cryptocurrencies of all shapes and sizes. So now is probably a good time to do some spring cleaning in your portfolio. I never advocate wholesale changes, but maybe trim some shrubs. In the unlikely event that you have any weeds in your portfolio, rip them out. Winter is always right around the corner in financial markets. The best time to prepare for it is when the sun is shining bright.”
It Gets Harder From Here – Batnick, Irrelevant Investor
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The COVID-19 pandemic has stretched the health-care capacity across the world, heightening interest in medical technologies that offer better efficiencies or treatments.
I intend to dig deeper into the sector because I believe the demand for better health care treatments and cost-savings will motivate investment by national health-care systems.
Morgan Stanley analyst Cecilia Furlong provided a list of top picks in the devices segment of the medical technology sector, a great start for further research,
“Our stance: Stay long Devices. Last year, COVID-19 disrupted an industry whose key to performance has been durability and insulation from binary risk. In the pandemic’s wake, Large Cap Devices underperformed the S&P 500 by 10 pts (a persisting trend with Devices -2 pts vs. the S&P year-to-date), and also underperformed Healthcare for the first time in 5-years (a trend now reversing with Devices +3 pts vs. Healthcare YTD). Early-2021 case rates posed another setback to Medtech sentiment, but we now have visibility into accelerating US vaccinations, re-expanding hospital capacity, and greater patient willingness, all underlying our bullish stance for 2021 and de-risking the bear case.”
Ms. Furlong’s overweight rated stocks are Nevro Corp., Inari Medical Inc. , Edwards Lifesciences Corp., Medtronic Inc., Abbot Laboratories , Alcon Inc., Boston Scientific Corp., and Teleflex Inc.
“@SBarlow_ROB MS: medical technologies OW stock ideas’ – (table) Twitter
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A Canadian copper miner is among Citi analyst Alexander Hacking’s two top picks in the sector,
“At $4.00/lb copper, the group is valued at 5-10x EBITDA and 5-10% FCF yield. These are much closer to mid-cycle multiples than trough multiples on peak earnings. This leaves the investment case bifurcated, in our view – either you believe in the multi-year, $10k+ ‘copper supercycle’ thesis or you don’t. We at Citi are believers … We prefer Buy-rated FCX [Freeport McMoRan] and FM [First Quantum Minerals] to SCCO [Southern Copper] on valuation … Commentary around projects should reinforce that nothing major is “shovel-ready” yet… A wave of new mines would be likely in the 2027-32 range if current prices persist "
“@SBarlow_ROB Canadian copper miner among Citi’s top picks in sector” – (research excerpt) Twitter
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Diversion: “30 years ago this weekend, Nirvana performed “Smells Like Teen Spirit” for the first time’ – A Journal of Musical Things
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