Ticker Take with Jon Erlichman
A weekly newsletter on investing.
A recap of the week
Party on, bull market! Ahead of the July 4th festivities, investors had something else to celebrate — fresh all-time highs for stocks! A solid U.S. jobs report led to a fifth advance for the S&P 500 in the past six days, with tech stocks, financials and industrials fueling the holiday-shortened session. The benchmark index has now risen more than 25% since the April lows. In Canada, the TSX has enjoyed its own record run, now up more than 20% in that same time period.
Cash Flow Kings?
Which stocks are cash flow kings? In our latest full-length investing video on YouTube, we explored why free cash flow is so important to investors. Plus, we spoke with investing experts who shared 7 examples of stocks they like…because of the company cash flows! Our thanks to Barry Schwartz of Baskin Wealth Management, Jerome Hass of Lightwater Partners, Chris Stutchberry of Wellington-Altus Private Wealth and Daniel Rich of CFRA. Watch the full video here!
Good way to play the AI boom?
I spoke to Dan Rohinton of iA Global Asset Management, who is recommending shares of Taiwan Semiconductor to investors. In his words, it’s the “foundry of the world,” making it a diversified way to play the chip sector. On a separate topic, Dan is also a fan of Apollo Global Management, as he feels the market has been too cautious on the private equity titan’s prospects, sparking an opportunity.
Other tech investments to watch?
Tim Chubb, Chief Investment Officer at Girard, thinks that Salesforce is a solid option, along with Alphabet, which he sees as being in the early innings of monetizing the AI boom. Chubb also remains constructive on infrastructure names in the semiconductor sector, such as Micron. On a related note, Salesforce was the number one Wall Street pick among Dow stocks, as we highlighted in last week’s Ticker Take video. More here!
Amazon’s 1 million robot milestone
Amazon just announced it now has one million robots in its warehouses around the world. That means its robot workforce is quickly catching up to its human workforce. Amazon said in its most recent financial results that it employs nearly 1.6 million people worldwide. Why is the company increasing its robot count? According to Bloomberg, Amazon tends to have high turnover with employees, which it estimates can cost the company as much as $8 billion a year. It says robots can help reduce those expenses, while also helping to improve the company’s safety record.
‘F1’ highlights Apple’s services strategy
Apple is going through a major transformation in its business. And not just because of AI! If you’ve seen the box office receipts so far this summer, you might know that the new Formula One film “F1” starring Brad Pitt is exciting movie goers. Well, F1 happens to be an Apple original film and it’s the most expensive theatrical release Apple has ever had. Additionally, it’s a test of the company’s strategy to release its original movies in theaters first, before having them debut on its streaming service, Apple TV+.
Apple has increasingly relied on its service business, as iPhone’s peak growth years fade away. According to Bloomberg data, services made up 20% of Apple’s revenue 5 years ago — and this year, analysts polled by Bloomberg expect the services arm to make up approximately 27% of revenue.
Avoid oil names?
Allan Small of Allan Small Financial Group told me he’s cautious on energy investments, given the war premium has come out of the price. He notes that with more OPEC+ production on the horizon, it’s hard for him to see a notable move higher in oil. He generally prefers growth stocks, namely in tech.
Wishing you all a safe and happy weekend. And make sure to share the newsletter with friends who might be interested, so we can ensure it stays free to read!
Disclaimer: this content is for informational purposes only and does not constitute legal, financial, or professional advice. Always consult a qualified professional regarding your individual situation.