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Everyone is looking for an edge in the market. With earnings season underway, Rockland Trust vice president and portfolio manager Karl Farmer shares three stocks he is keeping an eye on. Find out what they are in the video above.
To watch more expert insights and analysis on the latest market action, check out more Market Domination here.
Carl, uh welcome to the show. I know you got three stocks you're looking at right now for clients. Carl, let's let's run through those. One is Nike. Why why does that make your radar, Carl?
Oh sure. Hey, thanks for having me on today. Appreciate it. So, one of the things about Nike is that people have to realize that this is not a 2025 fix. You you could get a pop and you've seen that when the off and on again tariff announcements, but if they end quickly, you may see uh you may see a resumption in terms of trying to fix fix the story. Uh the company had issues even before the tariffs, the trying to reinvigorate the brand, the CEO's been there decades now in terms of coming in and trying to reinvigorate things and repair some of the relationships that were damaged a little bit with the direct to consumer initiative. Uh but with the stock not at prices not seen since 2017, this level provides a good entry point should they get back to the three to $4 share of earnings power, but they have some work to do.
Um another uh stock that you're looking at is Air products, big industrial gas company here. Um is this one also that is sort of um a little more tariff proof or is it just you know, there's going to be demand for its products no matter what? How are you thinking through that?
Oh sure, a little bit. So as as you mentioned, the market leader in industrial gas, it's kind of trading at a big discount to its peer Lindy. Uh usually about 10% on the grants now about 30% off of that multiple. The future growth can come from new products, uh projects and clean energy transition. But the main thing is you focus on was the strong and predictable recurring revenue model. It's not completely proof, you know, recession proof in terms of if there is a slowdown in the economy, certainly their customers will be uh will be purchasing less, but in terms of uh the tariffs, this is certainly one that uh that that we like going forward.
Final one, Carl, how about Pepsi? uh also on your radar. Name's down about 20% over the past 12 months. You look at that name, Carl, what's going to get this one moving in in the right direction?
Well, so the recent results have led to the low cinnamon and the discounted multiple that it faces today. The productivity savings from here though, and the fact that they should grow volumes, this can offer a little bit of a positivity as we look forward. Uh they have flexibility across their platform with value pricing across their product lines. And it's not off much year to date, as you kind of mentioned some of the defenses, whether it's staples or utilities have held in pretty well. But it is off 20% in the past 12 months. That also gives investors a 3.8% yield while they wait and maybe see if they can weather through some of the GLP1 damage that's been done.