Marketplace Roundtable #56: Bill Gunderson On How Earnings Expectations Point To Equity Upside

Bill Gunderson, founder of Gunderson Capital Management, joins the Marketplace Roundtable Podcast to discuss his investing experience as reflected in the Best Stocks Now! Premium service.
Gunderson has been a professional money manager for 22 years and finds investors generally fall into one of two camps: value investors or "more from the cam, slam, momentum" school of thought. Gunderson finds himself "right in the middle," combining value with "momentum, alpha, and performance."
One integral lesson he's learned in his career is that "stocks and indexes follow earnings." This explains why the market has gone up for 10 years and counting. This year the S&P 500 is on track to make $165 per share, compared to $58 in 2009 when the rally began. Next year the consensus is for $180 per share, or 9% higher than this year, which according to Gunderson's expectations should translate into a level above 3,200 for the S&P 500 in coming months.
As earnings season kicks off, he is keeping an eye out for companies that begin to stray from the course that was projected. Last earnings season it was Netflix (NFLX), which caused Gunderson to sell his shares in the streaming services company. China trade talks are "the biggest cloud hanging over the market," but Gunderson expects a resolution by the end of the year or sooner. "It's just gotta happen," he says. "Not getting a resolution or some real big question mark over the election coming up -- I think those are the biggest factors."
Favorite ideas include Charter Communications (CHTR), "a cable company so disliked by their customers they had to change their name." Gunderson has a big position in CHTR and remains bullish as earnings expectations increase. He recently wrote about Lululemon Athletica (LULU), which has "a very strong history of beating earnings," and likes Chipotle (CMG), Dexcom (DXCM), and Insulet Corp (PODD), among others.
Topics covered:2:00 - Describe your investing style3:15 - Key lesson learned4:00 - Assessment of current market, particularly in light of earnings7:15 - Any sector you focus on?10:00 - Anything that currently scares you about the markets?11:00 - Thoughts on Zuckerberg vs. Warren12:30 - Favorite stock ideas. (CHTR) (LULU) (CMG) (DXCM) (PODD) (BX)Give a listen and post your thoughts in the comment area below.