Meta (META), Alphabet (GOOG), and Salesforce (CRM) are potentially good buys in the current, volatile environment, Dryden Pence, the Chief Investment Officer and Co-Founder of Pence Wealth Management told Schwab Network recently.
During the same segment, Yung-Yu Ma, Chief Investment Office for the wealth management unit of Canada-based BMO, a major bank, said some stocks have reached “bargain” levels and predicted that “strong names will stabilize” during the upcoming earnings season.
Meta App 3D sign
The Stocks That Interest Pence
Pence said that his firm is “looking at” Meta, which, he noted, has a forward price-earnings ratio of 20 times and obtains 44% of its revenue from the U.S. Salesforce (CRM) has a price-earnings ratio of 22 and gets a “significant amount” of its revenue from the U.S., Pence noted. Google also gets a meaningful amount of its sales from America, he indicated.
The best names to buy at this point are firms that get “a lot of revenue from the U.S. and operate more in the software realm because they are least affected by tariffs,” Pence stated.
Ma Agrees With Pence
The best-positioned companies are those with a large amount of exposure to the U.S. and those whose margins are unlikely to fall a great deal due to higher import costs in the wake of the tariffs, Ma stated. Firms that derive large amounts of revenue from software and/or intellectual property are likely to be relatively well-positioned, while those that rely on imports from China will probably be significantly hurt by the tariffs, he believes.
“We are looking at names that are less affected by the new environment,” Ma said.
Hedge Fund Resource Center