Author: padlock

I have followed the work and writings of Laszlo Birinyi for many years but have never had the privilege of meeting him. In spite of never having met, Mr. Birinyi and Barron’s gave me an early Christmas gift this weekend with the article “Three Stocks for an Aging Bull Market”. The three stocks that Mr. Birinyi recomended were Apple, Sears Holdings and Walgreen’s; all part of the Padlock portfolios. In addition to the details on why he likes the three stocks, Mr. Birinyi also discusses the reasons he continues to believe that the current equity market still has potential upside. I think that you will find his views on both the stocks and the market very sensible. The Lato Letter is a market commentary and not a political forum but with the tragedies in Newtown last week, we all, even if we are Canadians, must make our views known on the need...

Needless to say, given the volatility in the stock recently, I talked about Apple today during Market Call. To provide far more insight into the company, Tim Cook, the CEO of Apple, was interviewed for the cover story of Business Week. The lengthy article is well worth reading and provides many insights into Tim Cook and Apple. Here is that link. Finally, tonight at 10:00pm Tim Cook will be interviewed on the NBC show Rock Center. As they say, check your local listings for the time and station in your area. As I said to a client earlier today, for years it has been easy to be a shareholder of Apple but now we are having to earn, through our patience, what I still believe will be above average returns. To receive The Lato Letter by email from now on, please click here....

About the only 100% certain thing that can be said about equity markets is that they will fluctuate. Although their purpose is to provide an outlet to buy and sell shares of businesses that you either desire to be a shareholder of or no longer wish to be a shareholder of, the day to day market prices change more frequently and sometimes randomly compared to the underlying value of the business and its potential. Therefore, in times when markets appear to be valuing things more randomly than rationally, investors are sometimes provided with opportunities to invest in good businesses at prices that could provide above-average rewards when prices once again align with values and become more rational. We are in one of these more random periods and I have used that period to add three new holdings to many clients’ portfolios. The companies that we have invested in are all US...

One of the keys to long term successful investing is to have a diversified portfolio among many stocks and sectors because not all portfolio holdings can be contributors to positive performance day in and day out. This month, that diversification has helped the Padlock portfolios to stay ahead of the market while two of our bell-weather holdings have had a difficult couple of weeks. Apple and Google, which have been very strong contributors to the positive performance this year, have both declined recently but those declines, rather than being a cause for concern, have created the opportunity for them to once again lead the portfolios for the balance of the year. Starting Thursday, October 18th, Google shocked investors by having their earnings released four hours ahead of schedule and having them widely miss expectations. Apple then released their earnings the following Thursday and also disappointed investors by falling slightly short of the...

When I appeared on Headline with Howard Green on September 12th and was asked if it was time to take profits in Apple, I jokingly responded that “it is never the time to take profits in Apple”.  There will obviously be a time to take profits in Apple and at some point to sell the entire position BUT that time is NOT NOW. From its intraday high of $705.07 on September 21st, the stock has fallen 9.5% to close yesterday at $638.17.  Reasons for the decline range from the disappointment of selling “only” 5.0 million iPhone 5’s the first weekend to the premise that stock prices cannot grow to the trees and Apple is already the most valuable stock in the world.  Yes, there was an issue with the new Maps application on the iPhone and also reports of labour unrest in China but to extrapolate that Apple’s best days are...

Just a brief note today with a couple of housekeeping details. First of all, tomorrow (October 3rd), I will be appearing on Market Call at 1:30pm. This half hour show is hosted by Michael Hainsworth and is re-broadcast at 8:00pm. The video will be posted in the Library section of this website. The performance charts to the end of the third quarter for the three Padlock Composite Portfolios - Balanced, Growth and Small Cap Growth - have been posted in the Performance section of this website. With the standard caveat that past performance is not indicative of future performance, I have been very pleased with the results this year, particularly when according to a recent JP Morgan report that only 10% of US equity mutual fund managers had exceeded the S&P 500 Index (their benchmark) by 2.5% or more. If you have any questions about the charts, give me a call. I...

Last week, I attended the Peters & Co. Fall 2012 Oil & Gas Conference in Toronto at the Toronto Ritz Hotel. It was an interesting setting since that week the hotel was also serving as the official hotel of the Toronto International Film Festival (TIFF). With a throng of paparazzi lining up outside the hotel, the only star sightings for me were not the Hollywood stars at TIFF but rather a few oil & gas stars from Calgary. There were several themes that were in evidence throughout the conference. The key themes were, as detailed in the Peters & Co. research summary: 1) North American Natural Gas Outlook - All the Right Things are Finally Occurring; Will Supply Ever Respond 2) Canadian Oil Differentials will Remain Volatile Throughout 2013 3) Maintenance Capital Requirements in the Oil Sands have been Vastly Underestimated 4) Propane Prices Crash - Does Liquids Rich Drilling Still Make Sense 5) With More...

Late last week, I was interviewed by Proactiveinvestors. Proactiveinvestors is a leading multi-media news organisation, investor portal and events management business with offices in New York, Sydney, Toronto, Frankfurt and London. They provide content to many of the world’s largest news amalgamators, financial websites, and news tracking services, and also provide commentary to dozens of other leading specialist investor focused websites. Here is the link to the article that was posted on their website this morning. If you have any trouble opening the link, let me know and I can send you the article in a different format. Talk to you soon. To receive The Lato Letter by email from now on, please click here....

Following my appearance on Market Call Tonight, the following are summaries of the three “Top Picks” from last night’s show.  If you missed the show, check the Library section of this website for the links to the show. Agrium, $95.53 With crop prices being driven higher due to the North American drought, second half demand in international markets should allow Agrium to build on its excellent first half results.  In a rare move, the company twice increased its guidance prior to releasing its second quarter earnings on August 3rd and still surpassed the consensus estimate of $5.20 with earnings of $5.47 for the quarter.  These earnings were an increase of 19% compared to last year and position the company to meet or surpass the current consensus estimate for the year of $10.23 per share. Agrium is extremely well diversified by operating in both the production, wholesale and retail segments of the market, by...

Just a brief note today to alert you to my appearance on Market Call Tonight at 6pm on Monday night (Aug 13th) and a follow up on this quarter’s earnings reports which are just about completed. Overall, it was another better than expected set of results for the companies comprising the S&P 500 Index. Of the 430 S&P 500 companies that have reported, 43% reported in excess of 10% earnings growth and 65% of this group have exceeded consensus estimates.  The group of stocks that was listed in earlier issues has done even better in terms of exceeding estimates. Here are the up-to-date results with only TD Bank left to report this month: Date Company Estimate Actual July 17 Goldman Sachs $1.18 $1.78 July 19 Shoppers Drug Mart $0.70 $0.71 Google $10.04 $10.12 July 24 Dupont $1.47 $1.48 Paccar $0.82 $0.83 Rogers Comm. $0.86 $0.91 Apple $10.36 $9.32 July 25 Pepsi $1.09 $1.12 Caterpillar $2.28 $2.54 July 26 United Technologies $1.41 $1.62 Aug 3 Agrium $5.20 $5.47 Aug 9 Cdn Natural Resources $0.50 $0.55 Manulife Financial -$0.45 -$0.18   Early next week, the next issue of The Lato Letter will discuss my Top Picks from Monday’s show.  Enjoy the show and I will be...

Padlock Investments is ready to take on your investment portfolio. Ask us how!