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In today's Good Buy or Goodbye segment, Genter Capital Management CEO and president Dan Genter joins host Julie Hyman to share his investment recommendations.
Genter identifies Chevron (CVX) as a compelling buy opportunity, highlighting several catalysts. He points to the company approaching an inflection point in free cash flow as its Kyrgyzstan operations come online, providing a potential boost.
Next, he highlights the pending Hess (HES) acquisition, saying it will "fill their pipeline" for both current and future operations. Genter also notes Chevron's strategic entrance into the data center artificial intelligence (AI) market, positioning the company as "one of the first to the show" in the energy sector's tech pivot.
On the cautionary side, Genter recommends avoiding Starbucks (SBUX). He cites ongoing margin pressures that are being exacerbated by new CEO Brian Niccol's turnaround initiatives, which "comes at a cost" and are contributing to "margin erosion." Additionally, Genter raises concerns about potential regulatory headwinds, noting the coffee chain's products have been characterized as "sugar on ice" — potentially problematic given the new Health and Human Services (HHS) secretary's public stance against sugar.
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Finally, he flags valuation concerns, with the stock trading at a price-to-earnings ratio of 35.
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This post was written by Angel Smith