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| George Loughery of Seamark Asset Management |
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| BUY | Alcan Aluminum | AL-T (Dead) | 48.600 | Has been a laggard. Of all the commodities, aluminum is the one that has probably had the least move to date. An oligopolistic type of industry. Well disciplined. Fairly tight in supply, so should move eventually. | 2005-03-15 | ||
| DON'T BUY | AbitibiBowater Inc. | ABH-T (Dead) | 6.490 | Largest company, but not known for having shareholder friendly type management. This would be a bet on a commodity. If currency and prices come your way, you have a disproportionate return. Very mercurial. | 2005-03-15 | ||
| WEAK BUY | Bank of Montreal | BMO-T | 55.440 | Likes their Harris Bank asset. If and when there is some consolidation, it will be advantageous to have that asset. A good solid holding to have, but you have to realize that a lot of the better returns have been had on the cycle and loan loss provisions are a little on the light side for where we are in the course of the cycle. | 2005-03-15 | ||
| VAGUE | Bank of Nova Scotia | BNS-T | 40.620 | Gives good exposure to foreign assets. | 2005-03-15 | ||
| DON'T BUY | Valeant Pharmaceuticals | VRX-T | 20.380 | Accounting is not that trustworthy. The drug delivery technology they have is of some value, but it is difficult to assess the intrinsic value. | 2005-03-15 | ||
| BUY | Canada Bread Co. | CBY-T | 58.500 | Has done phenomenally well. Looks like Maple Leaf is looking to take the company private. Squeeze play as the remaining float only costitutes 13% of the company. This is the reason for the stock increase, not the fundamentals of the company. They are making in the $3 vicinity and might improve 10% in the forward year. Too rich. Prefers George Weston (WN-T). | 2005-03-15 | ||
| WEAK BUY | Domtar Inc. | DTC-T | 11.750 | For the long term, it's probably the best company in its sector. Industry has had pressures because of currency, dropping input costs and dropping fibre costs. If you are patient, and a long term holder, it should work out. | 2005-03-15 | ||
| DON'T BUY | Encana Corp | ECA-T | 83.150 | Has had a pretty sharp move since the beginning of the year. Has conducted itself admirably within the group. Have done all the right things. Traded the right properties and tilted their mix towards natural gas. The easy money's been made. If you own, take some profit. | 2005-03-15 | ||
| BUY | General Electric | GE-N | 36.000 | Recreating itself. Divesting itself of more of its holdings in Genworth Insurance and concentrating into new businesses like water, nano-technology, new materials. A very good holding. Trades at a reasonable price relative to the growth. Earnings have improved significantly over the past couple of years. | 2005-03-15 | ||
| DON'T BUY | General Motors Corporation | GM-N | 33.720 | Likes the company over the longer term. Have been very innovative. Might have a bright future. In the meantime they are trying to get a leg up on Ford (F-N) by having more production in China to pay for retirees. Might be premature to buy at this time. | 2005-03-15 | ||
| BUY | Great West Lifeco | GWO-T | 27.970 | Always been the top quality company in its sector. Well run. Could do better on their US operations. Canada Life acquisition is well behind them. Reasonably well placed, compared to its peer group. Stock price has probably had its major growth, so will probably be slower. First couple of interest rate increases might help them because they have stipulated minimums in some of the states where they haven't obtained legislative relief. | 2005-03-15 | ||
| BUY | Home Depot | HD-N | 39.760 | In the midst of a restructuring. They may be able to keep a leg up in a bit of a downmarket by pursuing restructuring. Changing spaces to be more friendly to women which has paid off. Moving into appliances. | 2005-03-15 | ||
| BUY | Eli Lilly & Co. | LLY-N | 52.700 | A little bit of risk in a 3/6 month view as to whether they can retain their patent on Sprizecta (?), but the longer term they have the best drug pipeline and growth in the sector. OK for a long term hold. | 2005-03-15 | ||
| HOLD | Metro Inc (A) | MRU-T | 27.200 | Speculation that this and Sobey's (SBY-T) might be involved with the purchase of A&P Canada. | 2005-03-15 | ||
| WAIT | Placer Dome | PDG-T | 21.260 | Prefers Barrick (ABX-T). A positive is that it has significant copper as a by-product versus silver for Barrick. Has a lot of new projects in the hopper that have not come to fruition. Needs some improvement there. Wait to see some development in their principal projects. | 2005-03-15 | ||
| BUY | Pfizer Inc | PFE-N | 26.290 | A good long term hold. Historically cheap. | 2005-03-15 | ||
| HOLD | Sobeys | SBY-T | 38.230 | Speculation that this and Metro (MRU.SV.A-T) might be involved with the purchase of A&P Canada. | 2005-03-15 | ||
| TOP PICK | Shaw Communication (B) | SJR.B-T | 24.730 | A group in which you can make money 2 ways. Most people think you can do it simply by harvesting the free cash flow. However, this is a consolidating industry and over the long term, occasionally you get lucky and one company buys another. Benefitting from the rollout of their digital telephone services. Also has the satellite business. | 2005-03-15 | ||
| WEAK BUY | Sunlife Financial | SLF-T | 38.940 | Probably the cheapest within the group. The earnings quality isn't as good as Manulife (MFC-T) or Great West Life (GWO-T). Also hasn't made a big acquisition yet so there is a risk of a dilution from an acquisition in the future. | 2005-03-15 | ||
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| DON'T BUY | Transalta Corp | TA-T | 18.400 | Yields are pretty high relative to bank stocks in particular. A little bit of risk in interest rates increasing. Longer term, management isn't particularily the sharpest knife in the drawer. If you are patient enough assets might get acquired. | 2005-03-15 | ||
| BUY | Toronto Dominion | TD-T | 49.930 | Had a pull back because of the Bank North deal. US residents selling their TD shares they received put short term pressure on the stock. | 2005-03-15 | ||
| BUY | Viacom Inc. | VIA-Q | 34.290 | The big media companies are out of favour, so they bought them as contrarian holdings. In the process of restructuring. The assets would be worth a lot more sold than the company is as an operation. | 2005-03-15 | ||
| DON'T BUY | Westjet Airlines | WJA-T | 16.400 | Now has one less competitor. Expect airlines will tend to consolidate as they have a lot of fixed costs. Not a fan of airlines. | 2005-03-15 | ||
| BUY | George Weston Ltd. | WN-T | 108.000 | Bakery assets are attractive because they are coming through a wee bit of a cycle because of the Atkins diet phase and the sell of in the last couple of years. | 2005-03-15 | ||
| VAGUE | Yellow Media Inc | YLO-T | 13.500 | A popular stock with a strong institutional demand. The premier income trust. | 2005-03-15 | ||
| TOP PICK | Sysco Corp | SYY-N | 33.700 | The dominant company in the food industry in North America. Very little competition. Have an opportunity in that the earnings are depressed in the short term because of 1) construction of a big distribution centre on the east coast at $0.05/0.06 a share and 2) penalized by high oil prices in the short term (delivery costs and stay at home patrons). | 2005-03-15 | ||
| BUY | Time Warner Inc | TWX-N | 18.030 | The big media companies are out of favour, so they bought them as contrarian holdings. | 2005-03-15 | ||
| TOP PICK | Quebecor World Inc. | IQW-T | 28.140 | A contrarian pick. Deep cyclical company, hasn't gone out of business and has started to improve a little. Initially improvements have come through cost cutting, but expects it to eventually come though operating leverage. | 2005-03-15 | ||
| BUY on WEAKNESS | Astral Media | ACM.A-T | 31.950 | Between this and Corus, this has been the better operator. Pay TV has been a good thing, digital is a driver, radio has really moved up and advertising (particularily outdoor) has been good, so they have been firing on all cylinders. Current price is OK for a long term hold. | 2005-01-21 | ||
| BUY | Alcan Aluminum | AL-T (Dead) | 47.470 | Has become more oligopolistic over the last couple of years and that's been aided by the Peschne acquisition. Good management. Sold the spinoff and reinvested in Alcan. Aluminum looks relatively good. | 2005-01-21 | ||
| DON'T BUY | Bombardier Inc (B) | BBD.B-T | 2.230 | Has difficulty trusting the management. Have had trouble sticking to their knitting in the past. They dug a $500 million hole when they lent money for things other than airplanes. | 2005-01-21 | ||
| HOLD | Canadian Imperial Bank of Commerce | CM-T | 67.950 | Has already run a long way. If the economy slows down, there's not a lot of silver bullets left in its gun. Credit cards are one of the jewels in their crown and there is a lot of competition in the credit card business. Could have support a couple of $'s down. Caution. | 2005-01-21 | ||
| WEAK BUY | Cisco | CSCO-Q | 18.010 | Mixed opinion. Internet drives the growth longer term, however growth is not what it was 5/10 years ago. It has become a more mature company. An FASB ruling is coming regarding expensing of employee stock options> This company will be hit the hardest. Have lots of money and good management. | 2005-01-21 | ||
| BUY | Encana Corp | ECA-T | 69.910 | Have been shrewd in steering their production towards natural gas. Over 60% of production is in natural gas. | 2005-01-21 | ||
| BUY | Pfizer Inc | PFE-N | 24.480 | A tough BUY, but given the valuation, if you have a 3/5 year time horizon the positives outweigh the negatives. | 2005-01-21 | ||
| BUY | Jean Coutu Group (PJC) (A) | PJC.A-T | 16.390 | Likes their US acquisition. Very capable of handling it. Noted for their tight distribution practices. | 2005-01-21 | ||
| TOP PICK | Thomson Reuters Corp | TRI-T | 42.320 | Has a reasonable valuation at 11 X EBITDA or in arrears 20 X free cash flow. 2% dividend yield. Has made no major mistakes over the longer term. Financial and education sectors have lagged and are starting to look up. Infrastructure costs have already been sunk and margins should increase. | 2005-01-21 | ||
| TOP PICK | Viacom Inc. (B) | VIA.B-N (Dead) | 37.540 | Likes their content, creativity in the company. 50% of the business is coming from specialty cable. Content and cable means good growth. Blockbusters gone. Taming radio. Marginal things will be sold for more than what they are on the books which will free up a couple of billion $'s. | 2005-01-21 | ||
| BUY | Time Warner Inc | TWX-N | 18.590 | CEO's head is on the line and if he doesn't do well, that's the end of him, so he has an incentive to improve things quickly. The company's out of its financial handcuffs. May take a run at Google. | 2005-01-21 | ||
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| TOP PICK | DirectTV Group | DTV-Q | 16.100 | Under invested assets. The previous owner, GM, liked to take out the dividends, but didn't put enough back in. New owners are willing to invest for the future. Cheap. Aggressively rolling out digital recorders. Just acquired Pegasus Communications. | 2005-01-21 |
