I am currently sitting with a ton of cash. Dividends are in, and I have liquidated my Merck position, a company that has been on the chopping block for a while now. So, then I sit with two questions. 1. Is this market a tactical buy right now? 2. Are there any companies on my watchlist that merit a clear buy?
I am not willing to go through everything on my list here. It would be way too ambitious. In any case, it's much more interesting to convey how I reason. Therefore, I limit myself to three companies: Amazon, Canadian Pacific Kansas City, and Securitas. However, let me give you my overall view of the market first..
The market looks great
We’re now in year three of this bull market. Year three is often difficult in market history. Returns tend to be muted, volatility runs high, and 2025 is no different. U.S. stocks lag behind Europe and Asia, but that’s not surprising after America’s standout performance in 2023 and 2024. Ex-USA can simply play catch-up for a limited period; it doesn’t have to mean anything more.
Volatility is a key word here. While the tariff drama has faded, geopolitical uncertainty lingers. Volatility is now front and center as America has officially entered the Israel-Iran conflict, launching coordinated strikes on Iranian nuclear facilities alongside Israel. I can’t see any sharp market reaction in future prices so far, but the escalation can trigger market anxiety when it opens tomorrow. Historically, such dramatic geopolitical shocks often spark a sharp, knee-jerk selloff in equities, particularly if energy prices surge and inflation fears resurface. The risk of wider regional conflict and potential disruption of critical shipping lanes, especially the Strait of Hormuz, only amplifies market uncertainty. We can see a spike in oil prices and a rush to safe-haven assets like the dollar..
Yet, as many strategists point out, these episodes of heightened volatility have often proven to be medium-term buying opportunities. Previous Middle East crises have shown that oil price shocks tend to be short-lived, and markets usually recover once the initial panic subsides or a path to resolution emerges. For disciplined investors, the current turmoil may offer attractive entry points—especially if sentiment turns excessively negative and fundamentals remain intact.. An old market heuristic says: “Buy when you hear the sound of cannons, and sell when you hear the sound of trumpets”.
Looking through potential volatility, the market is fundamentally good. When the market surges from a shock at the speed we have seen in the last few months, it is a bullish signal, and the overall market is normally going even higher. We may be going through a consolidation period and some summer sloppiness, but the market is trending upwards weakly. Sentiment indicators are favorable. Investors are not overly bullish, and in many instances, weak sentiment often leads to buying frenzies whenever market actors get caught offside by positive events.
This is only a tactical consideration. Strategically, this is a market worth being in. The ongoing AI revolution promises a wave of productivity gains, and history shows that growth and innovation are the best long-term allies for investors. Stay invested—the magic of compounding and progress is on your side.
Amazon
AMZN is a puzzling business. It is a body shop. Millions of employees package merchandise, and drivers deliver these packages like madmen in traffic. Despite this Herculean effort, the e-commerce business doesn’t give all that much in operating profit. If you examine the profit & loss statement closely, you’ll see that data centers and advertising constitute nearly 80% of the profits. This gets even more lopsided when you observe that these two capital-light items only make up 30% of the total revenue.
Nevertheless, the datacenter business, Amazon Web Services (AWS), is on fire. AWS has a market share of 50% in strong competition with mainly Microsoft and Alphabet. Datacenters are the infrastructure that the AI revolution will run on, giving Amazon a wide moat with recurring revenues that will grow strongly for a very long time.
AMZN is poised to be a major winner in the AI age thanks to the vast troves of data it collects across its e-commerce, cloud, and logistics operations. This data provides a powerful foundation for training advanced AI models, enabling Amazon to personalize recommendations, optimize supply chains, and automate customer service at an unprecedented scale. With AWS at the heart of its AI strategy, AMZN is investing heavily, over $100 billion in 2025 alone, to expand its AI capabilities and infrastructure, setting new industry standards and fueling innovation across its ecosystem. This data-driven approach ensures Amazon remains at the forefront of AI-powered business transformation.
AMZN is among the most analysed companies on global Wall Street. I see that most analysts have price targets in the range of $240 - $250. When I put AMZN into a DCF model, I get the same result. The only misgiving I have about buying AMZN as a standalone company is that then I am in the same boat as every other investor, and that I own a large chunk of the company already through an ETF. Thinking more about the theme, I think this might be pretentiousness on my part, and that I should have the ability to look past it
Canadian Pacific Kansas City
When Bill Acman steps out, should we step in? CP owns rails spanning a vast territory from Northwestern Canada, over the American Prairie, all the way to Mexico. The company transports large bulk items such as coal, grain, potash, fertilizers, and automotives. This mix of freight needs to be transported regardless of the AI revolution and tariffs.
Speaking of tariffs, the issue hasn’t hurt the CP stock price all that much. The stock is up 10% year to date. The main thing to know about the company for investors is that Canadian Pacific acquired Kansas City Southern on December 14, 2021, linking up the network from north to south. Due to the acquisition, the operating margin of the rail line has languished for a while, but now, the integration has come so far along that margins are starting to improve. Investors should also realize that this is a capital-intensive business. Rail needs constant maintenance. Furthermore, the company’s growth plan also features significant capacity expansion projects, including new sidings, double tracking, and terminal upgrades, all aimed at supporting increased traffic and operational efficiency.
When I take all of these factors into consideration and put projected numbers into a DCF model, I find the company fairly valued here. The Company can still be a good investment based on its enduring business model and wide moat characteristics. I wouldn’t characterize it as a very sexy investment, but a slow horse always reaches the mill.
Securitas
I must admit that what I like most about SECU is that it shows up as undervalued in my DCF model. That said, I am not yet sure that I like the business all that much. You can easily paint a bull case for the company.
The world faces a heightened need for securing physical and virtual assets. SECU’s global presence, deep security expertise, and increasing integration of digital capabilities position it as the preferred partner for clients navigating complex risk landscapes. With a solid balance sheet, improving cash flow, and continued investment in technology, SECU is well-placed to capture ongoing demand for both physical and digital security, supporting sustained growth and margin expansion.
SECU has done an amazing job in leveraging technology solutions to achieve recurring revenues. The company employs AI-enabled analytics, predictive risk intelligence, and integrated digital platforms like SecureStat® HQ™ and SecureStat®360 to provide real-time security monitoring, data-driven insights, and unified management across client sites. These platforms enable clients to efficiently control security operations, track assets, ensure regulatory compliance, and proactively manage vulnerabilities and maintenance. By integrating artificial intelligence, cloud technology, and data analytics, Securitas delivers smarter, more efficient, and scalable security solutions that drive higher-margin growth and position the company as a trusted partner in an increasingly complex risk environment.
However, when we remove the rose-colored glasses, it is easy to observe that there are businesses with higher organic growth rates. SECU’s reliance on local security services, while providing resilience, may limit its exposure to higher-growth opportunities. The company is also in the midst of restructuring, including the divestment of its French airport security business and ongoing reviews of underperforming contracts in Europe and Ibero-America. These actions, while aimed at improving profitability, introduce execution risk and could lead to revenue volatility in the near term. Furthermore, SECU’s business optimization program is expected to yield cost savings, but the benefits may take time to materialize, and further operational challenges could arise during the transition.
SECU’s history shows that the growth fluctuates wildly. After a good growth period, the company can stand in front of a consolidation phase with less growth. This might weigh on the share price for a while. Making a long story short, I am still, on the fence about this one.
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Thanks for this. It's interesting to hear your views on the market and Securitas. I watch them closely too, but it's not high on my list. At least right now. Keep us updated and have a great rest of your day.