Chipmaker
Nvidia
has
been
in
the
spotlight
over
the
past
year,
especially
since
its
shares
logged
an
astronomical
240%
rise
in
2023,
on
the
back
of
the
artificial
intelligence
buzz.
Its
popularity
shows
little
sign
of
abating.
The
stock
is
up
around
19%
so
far
this
month,
and
90%
over
the
year
to
date.
Still,
one
investor
is
steering
clear,
saying
the
stock
looks
far
too
expensive.
“Even
if
some
may
say
it’s
not
as
expensive
because
earnings
have
gone
up
dramatically
…
when
you
see
stocks
start
to
triple
over
a
year
and
a
half
to
become
one
of
the
top
on
the
S
&
P
500
,
you
need
to
be
cautious,”
said
David
Dietze,
managing
principal
and
senior
portfolio
strategist
at
Peapack
Private
Wealth
Management,
which
has
over
$10
billion of
assets
under
management
and
administration.
“In
my
experience,
you
want
to
stay
away
from
these
stocks
when
everyone
is
focusing
on
how
magnificent
it
is
and
look
for
things
with
more
reasonable
valuations
instead.”
Instead,
the
veteran
wealth
manager
is
now
looking
for
stocks
in
growth
sectors
that
look
“reasonably
valued.”
He
said
the
pharmaceutical,
real
estate,
energy
and
financial
sectors
were
on
his
radar,
and
named
four
stocks
that
stand
out.
Pfizer
Pharmaceutical
company
Pfizer
—
well
known
for
its
Covid-19
vaccine
—
is
betting
on
cancer
drugs
,
following
its
$43
billion
acquisition
of
Seagen
last
year
.
“We
are
very
enthusiastic
about
this.
Segen
is
an
oncology
specialist
and
has
a
huge
market
so
there
is
a
lot
of
potential
for
Pfizer
to
grow
as
the
segment
of
its
business
expands,”
Dietze
told
CNBC
Pro
on
March
12.
He
sees
Pfizer
as
“the
perfect
example”
of
a
company
with
“strong
research
and
development
capabilities,
great
marketing
and
a
great
sales
force
—
not
just
in
the
U.S.
but
globally.”
His
optimism
comes
despite
a
rocky
2023.
Demand
fell
for
its
Covid
vaccines,
its
twice-daily
weight
loss
pill
fell
short
in
clinical
trials,
and
it
forecast
profit
and
revenue
for
2024
below
expectations.
The
company
has
since
announced
a
$4
billion
cost-cutting
program.
Shares
in
Pfizer
are
down
around
32%
over
the
last
12
months
and
5%
over
the
year
to
date.
However,
Dietze
also
highlighted
the
company’s
relatively
high
dividend
and
relatively
low
forward
price-earnings
(P/E)
ratio
—
which
divides
a
company’s
share
price
by
its
expected
earnings
per
share
—
of
around
12.
“So
you’re
being
paid
to
wait
for
Wall
Street
to
better
appreciate
the
stock.
And
you’re
buying
low
when
it
could
still
have
a
great
future,”
he
said.
Analysts’
average
price
target
on
the
stock
is
$31.37,
giving
it
around
14%
upside
potential,
according
to
FactSet
data.
Realty
Income
In
the
real
estate
space,
Dietze
likes
Realty
Income
.
The
REIT
says
its
portfolio
includes
over
13,000
commercial
properties
with
a
98.8%
occupancy
rate.
“It
is
a
defensive
stock
and
may
not
be
as
volatile
as
non-dividend
paying
stocks,”
he
said.
“The
stock
and
the
REIT
group
are
out
of
favor
because
interest
rates
have
risen.
Yet
this
could
be
a
good
pick
because
interest
rates
are
coming
down
and
much
of
the
concerns
in
commercial
real
estate
due
to
more
people
working
from
home
may
be
priced
in.”
He
also
flagged
that
Realty
Income
has
a
triple
net
lease
structure,
which
means
its
tenants
are
responsible
for
all
expenses,
and
it
pays
out
dividends
monthly,
unlike
many
REITs
which
pay
out
on
a
quarterly
basis.
Shares
in
the
REIT
are
down
around
14.5%
over
the
last
12
months.
FactSet
data
shows
that
8
analysts
have
a
buy
rating
on
the
REIT,
while
10
give
it
a
hold
rating.
Analysts’
average
price
target
for
the
stock
is
$61.18,
giving
it
around
17%
potential
upside.
SLB
Oil
services
giant
SLB
—
previously
known
as
Schlumberger —
was
also
among
Dietze’s
picks.
The
company
offers
a
range
of
services
to
the
oil
industry,
such
as
well
testing,
drilling
and
data
processing.
“They
are
in
the
forefront
of
using
new
technology
to
assist
companies
owning
energy
fields,”
he
said.
“They
don’t
own
the
property
but
they
provide
the
technical
know-how
to
extract
it.
And
they
have
a
long
track
record
of
being
the
largest
oilfield
service
[provider]
in
the
world.”
He
highlighted
that
20%
of
the
company’s
revenue
comes
from
its
new
technology
capabilities.
With
a
forward
price-to-earnings
ratio
of
around
15
times,
Dietze
also
said
SLB
looks
a
lot
cheaper
than
it
used
to.
“They’re
very
profitable
because
it’s
a
less
capital-intensive
business.
The
returns
on
invested
capital
are
projected
to
continue
strongly
in
two
years,”
he
added.
Over
the
last
12
months,
shares
of
SLB
are
up
around
21%.
According
to
Factset
data,
of
33
analysts
covering
the
stock,
31
give
the
stock
a
buy
or
overweight
rating,
while
2
have
a
hold
rating.
Their
average
price
target
is
$68.12,
giving
it
around
26%
potential
upside.
Comerica
In
financial
services,
Comerica
was
a
standout
name
for
Dietze
given
its
progress
in
commercial
banking
in
the
U.S.
and
more
recently
in
Canada.
“Because
of
their
size,
and
commercial
relationships,
they
have
great
cost
advantages
and
there’s
high
switching
costs
for
their
borrowers
to
go
elsewhere,”
he
said.
“They
have
one
of
the
highest
proportions
of
non-interest
bearing
deposits
in
the
marketplace
and
over
50%
of
that
coming
from
the
corporations,
who
get
a
preferred
borrowing
rate.”
Things
have
not
always
been
rosy
for
the
bank,
which
also
has
a
retail
banking
and
wealth
management
arm.
Comerica
faced
the
risk
of
being
booted
from
the
S
&
P
500
index
last
October
after
its
market
capitalization
fell
below
the
$14.5
billion
required.
While
it
remains
in
the
index,
its
market
cap
is
now
around
$6.84
billion.
Over
the
last
12
months,
shares
of
Comerica
are
up
around
28%,
although
they
are
down
7.5%
year-to-date.
According
to
Factset
data,
analysts’
average
price
target
on
the
stock
is
$59.45,
giving
it
around
15%
potential
upside.
