Weekend Update #470 - February 19th, 2022
Stocks covered: $FISV. Spotlight: what's driving the market action this week
Dear Friends of Purple Chips,
On Thursday, the Dow Jones Index was at 34,300 down a few hundred points from last week. We had some serious technology issues this week that prevented us from producing a longer video. We apologize for the inconvenience. In this video, we look at the following:
The polarized market;
Fiserv, a high-quality company that is on sale now. For Fiserv’s profile, please see this page on WSJ.com.
Please click on the icon below to view the video.
Transcript of Update 470:
We had a technical glitch which is making it hard to do the usual report, so I apologize for the shorter than usual weekend recap.
On Thursday, the Dow Jones was at 34,400, down a few hundred points from where it ended last week. What’s driving the market action this week is 1. concern over the possibility of a Russian incursion into Ukraine and 2. Concerns about rising interest rates.
At this point, many companies have published their Q4 results which have been pretty good.
However, the markets are nervous and they look like we could be in the early stage of a correction. But I want to stress that there is still a lot of cash on the sidelines and if there is a correction, it could end quickly because investors will probably step in to buy the dip. In the last few years, we’ve seen huge moves in stocks both up and down and a correction could literally be something that begins and ends in a few days. So, my advice to you is to keep an open mind and look for value.
Slide 3 – Liz-Ann Sonders
Here’s a chart from Liz-Ann Sonders Twitter account. This shows that stocks are very polarized and the bullish and bearish forces are cancelling each other out. I’ve been saying this for quite a while now, that despite the generally high index values, there are some stocks that are very cheap.
Later in this video, I’ll highlight one stock that I really think is cheap.
Slide 4 – Valuations
On Thursday, the low valuations were:
Fiserv, Jacobs, 3M, Fedex, Expeditors, LKQ, Dorman, Lululemon, Comcast, Starbucks, Ross Stores, Carmax, Carters, PROG Holdings, Walgreens, Fidelity National, Medtronic, Veeva, Meta, Adobe, Salesforce, Oracle, Shopify, Workday, Block, Cadence, Ansys and ATT.
On the TSX there was Stella Jones, Saputo, Boyd Group, CI Financial, Fiera Capital and Enghouse.
Slide 5 – Satellite Holdings
There were no changes to our positions this week. n/c
Slide 6 – Core US
we didn’t make any changes to our other positions.
Slide 7 – Core CAD
n/c
Slide 8 – FISERV
Now, talking about good deals. Here’s a chart of FISERV and I’ve brought this one up before and I can’t stress enough how good of a company this is. When you have 20 years of earnings history with no negative quarters, it’s a stock that should be your considered when it’s on sale. Always consult your advisor before buying.
Slide 9 – Consensus
Here are the consensus earnings estimates for FISERV and you can see here that the earnings are still expected to rise in the next few years. The bottom line is that when a high-quality stock is on sale, make room for it and take advantage of the sale.
END –
That’s all for this week, I’m john Schwinghamer, the author of Purple Chips. Remember that the markets are close on Monday in Canada and the US in observance of Family Day and Presidents Day.
Have a great weekend and thanks for listening.