Don’t be fooled by these value traps, says investor Landsberg

Texas Instruments and Verizon are a couple of troubled stocks to stay away from, according to Michael Landsberg, chief investment officer of Landsberg Bennett Private Wealth Management. Landsberg appeared on CNBC’s “Power Lunch” on Friday to give his hot takes on some of the market’s biggest movers of the day. Take a look at what he had to say below during “Three-Stock Lunch.” Texas Instruments Landsberg says sell Texas Instruments, citing the semiconductor company’s lack of exposure to artificial intelligence and rich multiple. “There’s better places to be in semi, with exposure to AI that isn’t much more expensive than this,” he said. “I get if you don’t have a lot of AI exposure but I shouldn’t be paying over 30 times for next years’ earnings when earnings aren’t going to grow much … obviously, it’s down for good reason because margins aren’t there, but I’d stay away,” he added. The stock dove more than 7% during the trading session after Texas Instruments issuing disappointing guidance, making it the S & P 500’s worst performer of the day. The company said it expects earnings per share to come out between 94 cents to $1.16, lower than the LSEG estimate of $1.17 per share. Texas Instruments’ stock price is down roughly 0.5% since the start of the month. Over the last year, shares have gained nearly 9.9%, far outperforming the market. Verizon Verizon’s another no-go, according to Landsberg. “I don’t like the stock at all,” Landsberg said. “Verizon’s stock is the same. It’s just not a stock that we wanna own, it’s kind of like your grandparents’ dividend stock. I don’t think it’s a name you want to keep.” The investor noted that Verizon’s stock price has barely moved over the past couple of decades — it was trading around $40 both in 2007 and ended the previous trading session at $39.18 a share. Shares of Verizon jumped about 1.4% on Friday after the telecommunications giant reported its strongest quarterly mobile and broadband subscriber growth in more than a decade. The company’s earnings and revenue results beat expectations from analysts polled by FactSet. Still, the stock’s down nearly 4% over the past year. Twilio While investors piled into Twilio after the company’s strong preliminary results, Landsberg is neutral on the cloud communications software maker as it remains significantly off its 2021 highs. According to the investor, the issue with Twilio has never been revenue growth, but rather management’s prioritization of making a profit. This time around, he said the company’s focus on profitability and margins is “going to be exciting about the stock and where it can go.” To be sure, Landsberg said “we still think you can wait a quarter or two to make sure it’s action and not just talk … if it continues to do well, margins get better, I think it’s something you can pick up down the road.” Twilio shares had their strongest run since 2020 on Friday after the company issued an optimistic forecast for the next few years during its Thursday investor event, saying that its adjusted operating margin will reach as high as 22% by 2027. The stock has jumped roughly 87% over the past year.