With the bulk of earnings season kicking off tomorrow, starting with major banks, we would like to provide a rapid-fire update on all of our portfolio holdings.

1. Apple (AAPL) — (We currently do not own Apple but some of our clients do) There’s a risk Apple’s latest quarterly results come in lighter than Wall Street estimates due to weakness in China. Even if that materializes, we maintain a long-term view on the iPhone maker and continue to believe this is a safe stock to own.

2. AbbVie (ABBV) — In general, we like healthcare-related names for their defensive characteristics in this environment. While we know the upcoming patent erosion for AbbVie’s Humira is an overhang on the stock, more clarity on the matter should be on the horizon, and we're willing to wait with a 3.95% dividend yield.

3. Advanced Micro Devices (AMD) — We fear more downside could be ahead for the entire semiconductor group as economic slowdown fears intensify and most recently a fresh twist of U.S. restrictions on China sales will hurt demands. Forward P/E is in the mid-teens but that means the market believes estimates are too high. 

4. Costco Wholesale (COST) — As we’ve said for months, Costco is the right kind of retailer to own for this environment. Its cost-saving structure appeals to inflation-strained consumers and the company’s results have been demonstrating exactly that, with same-store sales continue to grow month over month. In a recession, Costco will continue to be a destination for customers to shop. We're also waiting for Costco to hike their membership fees, and a special dividend in the near future.

5. Salesforce (CRM) — We’re sticking with Salesforce over the long term, but we fully acknowledge the strong U.S. dollar and macro weakness make it tough for the company to meet estimates. We don't want to sell stocks here but also we see no edge to buy here.

6. Cisco Systems (CSCO) — A very cheap stock with a solid dividend yield around 3.7%. We don’t mind owning the stock, even if tech is generally out of favor at the moment. 

7. Coterra Energy (CTRA) — Coterra is our natural-gas play, with a very cold winter approaching and the energy situation in Europe does not appear to get any better. Additionally, the company is a natural gas and oil hybrid, which allows us to benefit from both commodities. Lastly, its dividend payout and share repurchase program make this position very worthwhile, with currently approximately 8.5% (base plus variable).

8. Danaher (DHR) — Danaher announced plans to separate its slow-growing Environmental & Applied Solutions business last month, a move we think is a win-win for shareholders. It also pre-announced better than previously forecasted revenue growth, yet the stock price has negated all of that. This is a high-quality company with considerable recurring revenues that we want to own for the future.

9. Walt Disney (DIS) — Disney’s market value is dramatically lower than its intrinsic value. There are currently three problems with the stock. First, market fears the recession will hurt park sales; we don't think any kind of recession will be as bad as the Covid shutdowns, yet the stock is only a few bucks above its March 2020's low. Second, market also fears recession will hurt the streaming business, but Disney's movies continue to be second to none. Lastly, the real overhang is the company’s balance sheet, which was wrecked by the 21st Century Fox deal under past management, not by this management. We believe these to be ultimately non-problems, and we want to own more stocks at this price.

10. Ford Motor (F) — The supply chain challenges facing Ford are well-known and make it likely the automaker will miss estimates for its upcoming quarter. We’re keeping a long-term view and staying with the position, though, because we think part shortages and inflation will be overcome in time. We won’t want to try to time the market and sell here, then attempt to buy back at a lower price. Plus, the stock carries a dividend yield north of 5% at current prices.

11. Alphabet (GOOGL) — Shares of the search engine giant look incredibly cheap, even as we acknowledge concerns about ad spending in a recession. However, we think Alphabet’s Google Search will hold up relatively well due to the return-on-investment those ads provide. YouTube also appears to still be doing well. Put it all together, and we can’t ditch the stock here at 16 times forward earnings.

12. Halliburton (HAL) — We’re sticking with the oilfield services company because we believe demand for drilling is in a multiyear growth trend. The stock had a tough third quarter, but it has been the best-performer in the portfolio in the month of October, up well over 20%.

13. Johnson & Johnson (JNJ) — We continue to like J&J as the company makes progress on its planned breakup, which will result in two separate publicly traded firms. One will be focused on consumer products, the other will consist of the company’s pharmaceutical and medical technology units. 

14. Eli Lilly (LLY) — This has been the best stock for us in 2022. The pharmaceutical company has so much going, from the Alzheimer's drug to its FDA-approved diabetes drug that has recently shown promise to also treat obesity. It will eventually become the best-selling drug of all time.

15. Meta Platforms (META) — The parent of Instagram and Facebook remains a bit of a conundrum. While its feature to rival TikTok called Reels appears to be gaining traction, it’s not making a ton of money just yet. We also don’t have a lot of visibility into the metaverse businesses, yet the only thing we know is that it is costing a lot of money to develop. Conversely, we have to balance all that against the fact the stock has come down so much, making it appear that these challenges have been priced in at 12 times forward earnings. Lastly, we want to keep a catalyst watch in mind that at some point in the near future, the U.S. will have to ban TikTok. 

16. Morgan Stanley (MS) — The bank is set to report its latest quarterly numbers Friday morning. Morgan Stanley is not the traditional investment bank of the past. It has been transforming itself into an asset gatherer, and now the asset management business is ~50% of the company's revenues. The asset management business is much more stable than the investment banking business, and that’s why we think it’s very worth owning at this valuation (roughly 10 times forward earnings) and with a dividend yield of 3.9%.

17. Microsoft (MSFT) — We’re standing pat with Microsoft. It has its near-term problems, namely the strong U.S. dollar and a sharp decline in PC sales. However, its cloud-computing business Azure still appears to be going strong. Of course, the stock could fall further, but we won’t attempt to time the market because we don’t want to miss the turnaround.

18. Pioneer Natural Resources (PXD) — We have been trading around this name, buying dips and selling rips. If PXD were to drop below $230 in the near future and oil stays well above $70 per barrel, we will step back in to this name. Pioneer’s sizable base-plus-variable dividend of 13.55% remains a huge incentive to own the stock.

19. Wells Fargo (WFC) — Wells Fargo is able to boost its earnings by investing excess cash into higher-yielding Treasuries. The bank has also amassed a high-quality loan book, which makes us comfortable owning the stock despite fears about what the impact of a recession on financial firms.