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Industrial Stock Picks: CGNX, ANSS, GE - YouTube
Channel: TD Ameritrade Network
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all right we're watching stocks under
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pressure into the closing bell if you're
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not busy trading let's get some new
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ideas ivana delevska joins us founder
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and chief investment officer at spear
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invest ivana thanks for being here this
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afternoon i want to jump straight into
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the companies that you like
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ge general electric of all companies has
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been quite stable here through some
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volatility why do you like the stock
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so ge has come a long way
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g used to be a levered industrial at the
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peak of the aviation cycle with a
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struggling power business
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and
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as we go as we're getting out of this
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aviation cycle they're at the bottom
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with a
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world-class aviation business having
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solved their leverage problems and
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having put the power business under
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control
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so we really like aviation here uh on
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top of just the general reopening trade
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we like the fact that they're they've
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cut significantly their cost structure
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and this is with lean manufacturing and
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technology so we expect to see margins
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in the next peak that exceed
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the prior cycle levels
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so for general electric is this a
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long-term hold should investors
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be ready for any surprise on the covid
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story and air travel i mean does ge get
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correlated with the potential for
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airlines to have to slow down again
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yes so so g is definitely levered to uh
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the covet headlines there is definitely
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an angle of a reopening trade here
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um we are not too concerned about uh
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about the delta variant given that it's
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shown um that it's pretty it's not as as
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uh contagious in highly vaccinated uh
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regions so
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um
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speaking to the airlines there is
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definitely a lag between when they see
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the pickup in traffic and when ge will
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see their results improve so we really
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haven't seen the the pickup from six
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months ago in narrow body um narrow body
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miles flow we're really like going to
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see that in the second half of this year
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just because it takes some time for uh
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these overhauls to come to ge service
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what kind of price range potential do
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you think ge has it's been such a wild
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ride the last couple years i mean we're
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at 100 bucks which is pretty impressive
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on a three-year chart but what's
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on the table here are we talking 200 300
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it's been all over the place the past
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decade
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so we everything we invest in we're
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looking for compounders that can
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compound that high meat high to meet
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teens uh so we see that uh that
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potential here as well okay all right so
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this is something that's gonna build on
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itself and do we need to see from the
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next earnings what's going to really
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confirm the thesis do they need to see
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cash flow pick up because for a while
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that's what everybody was concerned
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about with g the cash flow was draining
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instead of coming in has that changed
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well for us it's all about all about
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aviation turning around so i think
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aviation will really drive cash flow
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going forward so so far it's really been
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a lot of cash flow noise between the
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reduction of the receivable factoring
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and uh and
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big power losses that that kind of came
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to an end so really from here on you're
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it's really going to depend on the
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aviation business speaking up okay also
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word also worth mentioning uh is that
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g's long-term liabilities which used to
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be a big concern for investors are now
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uh leveraged positively to rising
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interest rates so this is both the
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pension and the insurance liability so
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that puts a lot less pressure on on g's
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uh balance sheet very interesting
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forward we expect to see a lot more
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institutional investors as they've
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simplified the structure and uh
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simplified the financials interesting
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okay a really interesting point i mean
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it sounds like a totally different
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company
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than we were just talking about a couple
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years back i want to look at another
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name that you like uh ansys and sss is
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the ticker and there's some degree of
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overlap right this is something between
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tech and industrial that's uh
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about actual engineering that is used in
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some of these aerospace
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businesses yes oliver all we do is
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industrial technology okay and basically
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at spear we really focus finding on
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finding under the radar opportunities
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that are uh levered to this that are
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introducing new technologies or leverage
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to these trends so ansys is a leader in
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simulation
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and they're basically like the
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simulation market is extremely
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attractive because anything you're
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innovating today whether it's a fuel
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efficient aircraft or an electric
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vehicle or an autonomous driving system
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space mission you need an
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ansys software to make that happen so
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this company is just really uniquely
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positioned with a very broad portfolio
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that's their real differentiator so
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while
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five to ten years ago
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the companies we cover like honeywell
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would have been able to just use ma one
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module to do a structural simulation now
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they need to upgrade to three four five
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of ansys's module like fluids uh
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software to be able to
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innovate in their products okay and
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there's really great growth
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opportunities for this company so this
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is about almost to some degree kind of a
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secular
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growth story is there a similarity to
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cognex and other stock you like the
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third one cure cgnx
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a business that i see vision machine
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vision products what does that mean
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so so basically cognex the way to think
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about it is the eye of the machine and
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really more recently it's become the eye
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of the warehouse as well they've had
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tremendous growth in logistics uh
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they've grown over 40 percent even
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through the downside to the down
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downturn so um they've built a very
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unique position there with uh leveraging
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their their machine vision uh technology
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versus their competitors are trying to
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come in from uh the barcon scat barcode
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scanning side so they have a unique
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product and that's why they've been able
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to outgrow logistics which is a market
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that's already growing at 15 so
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outgrowing a very strong strong market
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wow they also have a very very unique
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position in vision ai they acquired the
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market leader um
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which was a korean company called
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swallop so
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um
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yeah basically between debt and
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logistics i think this company is really
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well positioned for strong growth ivana
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great stuff fantastic details really
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like the overlooked approach into the
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industrial tech sector we got the
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closing bell we got iran ivana dalevska
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is the founder and chief investment
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officer at spear invest cognex ansys and
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good old general electric
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you
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