Conviction List

With the market this low it's time for the publication of my conviction list. A number of stocks I've been buying for months now sit at share prices so low they simply cannot be ignored. A few of these feature regularly on the blog, and they will be featuring again here.

I do believe this is a good buying opportunity (although it could be closer to a good-bye savings opportunity).

Macy's

By far my highest conviction call is Macy's. The stock continues to have a PB value of 0.4. Yes, Covid-19 will be a short time issue, and will badly hurt profits. But, the firm is too cheap to ignore. There is not a ridiculous amount of debt (despite bonds being junk rated). The dividend is massive. The stock has sold off 50% all over Covid-19. If there is an end in site, the stock should fly.

Furthermore, given that they own a large portion of their real estate portfolio, they are better suited to dealing with temporary store closures as they have no rent bills to pay.



CVS Health:

For a year now, this stock has been a huge holding in my portfolio. The Aetna acquisition went well and the company repeatedly beats earnings expectations. A true success story. Covid-19 will only temporarily affect the stock and going forward it will likely rally back up to the $70 a share. I confess, I trimmed my position at $76, but have been buying back in as the market fell.

Invesco:

Look at the gorgeous dividend. People are moving money around in this market, and that's good for fund managers like IVZ. That PE ratio is lovely too. Yes, they have a fair amount of debt, but this shouldn't be a concern and cash flows remain strong.


 Others: 
Banks, banks, banks. This is not 2008. Balance sheets are strong. I particularly like JP Morgan and Bank of America at these prices. Morgan Stanley looks very cheap too! Hell, even Deutsche Bank is close to being on my high conviction list.


Almost on the high conviction list: 

Boeing: 

Oh how the mighty have fallen! Still, the stock looks cheap, and we have to remember there is not a chance in the world that Boeing would ever be allowed to fail. Therefore, I'll be a buyer at $150.