On the latest segment of Yahoo Finance’s Good Buy or Goodbye, anchor Julie Hyman is joined by Gabelli Funds Portfolio Manager Mac Sykes to discuss his portfolio recommendations for the financial services sector.
Sykes names Interactive Brokers (IBKR) as a buy, highlighting the company’s substantial new client growth. He notes that Interactive Brokers has "built an incredible global moat" and is adding new clients through advertising and referrals. Sykes praises the company’s impressive 70% pre-tax margins, saying the financial output is more akin to a technology company than a traditional financial services firm. Additionally, Sykes finds the company’s valuation "compelling", with a favorable price-to-earnings ratio.
In contrast, Sykes identifies Upstart Holdings (UPST) as a stock to avoid. He notes that the company is not yet profitable, despite its innovative approach. Sykes also expresses concerns about Upstart’s "lumpy revenue outlook" due to less demand for loans on its platform. Lastly, Sykes points to insider selling at the company, which he says "is not a confidence builder" for investors.
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