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| Gordon Higgins, CA, MBA of Sentry Select Capital Corp |
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| TOP PICK | Barrick Gold | ABX-T | 39.650 | World's largest gold company. Flat production this year over next but have a raft of projects. Great prospects and solid balance sheet. | 2008-12-22 | ||
| DON'T BUY | AbitibiBowater Inc. | ABH-T (Dead) | 0.660 | Huge debt. A lottery ticket. Not for the faint of heart. | 2008-12-22 | ||
| TOP PICK | BCE Inc. | BCE-T | 22.230 | (A Top Pick Jan 25/08. Down 37%.) Extremely cheap at these prices. 6.5% yield. $2.8 billion in cash. | 2008-12-22 | ||
| TOP PICK | Bank of Montreal | BMO-T | 29.520 | 10% yield so you are paid to wait. Just issued more equity that allows them to have Tier 1 capital of better than 10.4%. This puts them up in the top 2 banks in Canada in terms of balance sheet quality. Good price. | 2008-12-22 | ||
| BUY | Bank of Nova Scotia | BNS-T | 29.250 | One of the more conservative banks. Has the best history of earnings increases. Just acquired a major position of CI Financial (CIX.UN-T) from Sun Life (SLF-T) with shares, so didn't have to do an equity raise. (See Top Picks.) | 2008-12-22 | ||
| DON'T BUY | CanWest Global Comm. | CGS-X (Dead) | 0.475 | Laden with debt. Took on debt to buy Financial Post. Slow down in their Australian assets. Advertising is down on newspapers and television. High risk. | 2008-12-22 | ||
| DON'T BUY | Canadian Oil Sands | COS-T | 18.150 | Dividend fluctuates on cash flow and at $40 oil they are going to have to cut the distribution. At $60 oil you might be looking at a $.50 distribution and at $40 oil you might be looking at $.10. (Sold his holdings recently.) | 2008-12-22 | ||
| Comment | Canadian Pacific Rail | CP-T | 38.520 | Trades at a discount to Canadian National (CNR-T). An economically cyclical stock. With the economic slowdown, their volumes are going down. On any hint of an economic recovery, rails are definitely going to be there. | 2008-12-22 | ||
| BUY | Goldcorp Inc | G-T | 34.060 | One of the best gold companies with growth history. Trades at a little bit of a premium to NAV. Very solid management. | 2008-12-22 | ||
| BUY | Husky Energy | HSE-T | 27.690 | Great asset base. Have a refinery so they benefit even when oil prices go down. Cut back on their budget so still have free cash flow. Very solid company. 7.25% yield could be at risk. | 2008-12-22 | ||
| HOLD | Manitoba Telecom Services | MBT-T | 31.950 | Guidance for next year is basically flat cash flow. Moderately stable. With a sustainable 8% yield, he would continue to Hold. | 2008-12-22 | ||
| DON'T BUY | Maple Leaf Foods | MFI-T | 10.910 | The guess is whether people are going to be coming back and buying Maple Leaf products. Be cautious as you are counting on them getting back to the volumes and pricing they had before. | 2008-12-22 | ||
| Comment | Nexen Inc | NXY-T | 19.500 | Delaying their Long Lake project until 2010. Not economic at these levels. This delay will help them build the balance sheet. Extremely low multiple. Prefers Talisman (TLM-T). | 2008-12-22 | ||
| DON'T BUY | Potash Corp of Saskatchewan | POT-T | 79.330 | Stock went up with the price of corn and when corn came down, the stock fell too. They are curtailing potash production and it looks like they are going to have to drop prices. Even though it looks cheap, wait. | 2008-12-22 | ||
| BUY | Royal Bank | RY-T | 33.900 | Raised $2 billion in equity and several hundred million in preferred shares. Solid balance sheet. Tier 1 capital. Good hold on a long-term basis. Dividends are secure. (See Top Picks.) | 2008-12-22 | ||
| BUY | Sunlife Financial | SLF-T | 25.410 | Very solid balance sheet. Well above the minimum capital level. | 2008-12-22 | ||
| Comment | Suncor Energy Inc | SU-T | 22.140 | Oil sands. With oil prices down, its price collapsed. Will trade of oil prices. Had a big US following, which sold off when they didn't want to own oil. Thinks the selloff was overdone. Needs higher oil prices. | 2008-12-22 | ||
| BUY | Transalta Corp | TA-T | 22.260 | Hedge fund investors wanted to acquire at $39 so stock went up. That is now off the table so it has pulled back. Always paid $1 whether earnings went up or not. Earnings are finally up this year over last and going up in the next couple of years and dividends are forecast to increase. | 2008-12-22 | ||
| HOLD | Yellow Media Inc | YLO-T | 5.510 | Statistically cheap. People are worried that in a recession advertising is cut back. Think the stock price is more than reflecting any cutback in advertising. There are no near-term financing issues. | 2008-12-22 | ||
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| Comment | Baytex Energy Corp | BTE-T | 13.070 | Investors should be careful about oil/gas companies. They will all have to cut distributions further if they want to stay in the normal range. 16% distribution | 2008-12-22 | ||
| DON'T BUY | Oilexco Inc | OIL-X | 0.730 | Tried to do a convertible debt issue and it got pulled. Definitely have some financial issues. Not for the faint of heart. | 2008-12-22 | ||
| Comment | A Comment -- General Comments From an Expert | A Commentary | 0.020 | Gold: In times of uncertainty, investors should look at gold. If you believe there is any form of inflation becoming through this injection of liquidity, gold should help you. | 2008-12-22 | ||
| Comment | A Comment -- General Comments From an Expert | A Commentary | 0.020 | Natural Gas: Gas storage inventory is comparable to where it has been over the last 5 years. However, industry is not using as much in the slower economy. Also, some people can substitute oil for gas. Unlikely to see a run-up unless there is an extremely cold winter. | 2008-12-22 | ||
| PAST TOP PICK | Gildan Activewear Inc. | GIL-T | 11.160 | (A Top Pick Jan 25/08. Down 67%.) Announced orders had slowed and came out with an earnings warning for 2009. Plants are still running full out. Trading at 8X earnings and with no debt, should be a safe buy. | 2008-12-22 | ||
| HOLD | Genesis Lease Ltd. | GLS-N (Dead) | 2.710 | Leases aircraft. Have financing out beyond a year. Cut their distribution in order to rebuild the balance sheet and make sure they have adequate capital. He is comfortable with this but the motion is against it at the moment. | 2008-12-22 | ||
| PAST TOP PICK | Nufarm | NUF-ASX | 0.010 | (A Top Pick Jan 25/08. Down 33%.) Agricultural products. Feels the 5% yield is sustainable. | 2008-12-22 | ||
| BUY | Apple | AAPL-Q | 113.660 | 14x earnings is better than Rim’s 17x. | 2008-09-30 | ||
| WAIT | Agrium | AGU-T | 59.500 | This is going to be the worst quarter for price drop for corn. There’s some emotion working against it. Wait a little on this one, but it’s fairly valued. | 2008-09-30 | ||
| VAGUE | Bombardier Inc (B) | BBD.B-T | 5.780 | Has great stability on rail side, but instability on ‘C Series’ side. You are betting on a plane that is still under development. | 2008-09-30 | ||
| PAST TOP PICK | BCE Inc. | BCE-T | 36.700 | (A Top Pick Sept 12/07. Flat) Believes deal will still get done. The banks can still come up with the capital. | 2008-09-30 | ||
| TOP PICK | Bank of Nova Scotia | BNS-T | 48.000 | Best history of Canadian Banks’ earnings growth. Feels confident in Canadian banks. | 2008-09-30 | ||
| VAGUE | Canadian Imperial Bank of Commerce | CM-T | 61.080 | Bank with the greatest risk. The rescue package in the US could have a direct effect on CIBC. | 2008-09-30 | ||
| BUY | Canadian Pacific Rail | CP-T | 57.070 | Approval to make a recent acquisition but now they have to spend considerable money to expand rail lines. | 2008-09-30 | ||
| VAGUE | Encana Corp | ECA-T | 67.960 | If we have colder weather you should see positive growth. | 2008-09-30 | ||
| BUY | Johnson & Johnson | JNJ-N | 69.280 | Very interesting, very stable. | 2008-09-30 | ||
| BUY | Kinross Gold | K-T | 17.090 | When you see high volatility, people tend to drift to gold. Great growth company. | 2008-09-30 | ||
| BUY | Manulife Financial | MFC-T | 38.280 | Solid operations and good growth prospects. | 2008-09-30 | ||
| TOP PICK | Methanex Corp | MX-T | 20.850 | Like to get the cash back to the unit holder. They have good growth and dividend to boot. | 2008-09-30 | ||
| BUY | Norbord Inc. | NBD-T | 3.580 | Loosing money so paying dividends out of capital, but parent is taking their dividend as shares. Don’t buy it for the dividend but it is a nice way to get paid. | 2008-09-30 | ||
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| N/A | Northstar Healthcare | NHC-T | 3.260 | Doesn’t know this stock. Two buys and two holds from analysts. | 2008-09-30 | ||
| DON'T BUY | Nortel | NT-T (Dead) | 2.340 | Threatening to sell of a major operation of theirs. You’ve been buying hope in this stock since 2001. | 2008-09-30 | ||
| HOLD | Nexen Inc | NXY-T | 24.700 | Production volumes low due to hurricane. When you have mega projects you DO have mega-problems and that has to be allowed for when looking at these companies. | 2008-09-30 | ||
| BUY | Petro-Canada | PCA-T | 35.400 | Great long-term story. Fort hills project responsible for recent decline. Should be more stable than a lot of the exploration companies. Great long-term story. | 2008-09-30 | ||
| DON'T BUY | Paramount Resources | POU-T | 11.350 | The price is coming down with the price of oil. It’s a solid company, but there are other good quality companies out there as well. | 2008-09-30 | ||
| SPECULATIVE BUY | Research In Motion | RIM-T | 71.710 | Very volatile stock, must take long-term view. Moving into consumer area with margins dropping, cause recent stock price drop. | 2008-09-30 | ||
| DON'T BUY | SNC-Lavalin Group Inc. | SNC-T | 38.480 | People don’t like engineering/construction companies right now. | 2008-09-30 | ||
| HOLD | Teck Resources Ltd. (B) | TCK.B-T | 30.220 | With purchase of Fording, they are doubling their coal production. | 2008-09-30 | ||
| BUY | Thomson Reuters Corp | TRI-T | 28.930 | Likes it. Buy it in the UK, where it has a 15% discount, but you can’t exchange with Canadian shares. | 2008-09-30 | ||
| N/A | UTS Energy | UTS-T (Dead) | 1.270 | They don’t have the capital for the new higher price of the Fort Hills project. It’s cheap but you have that risk. It’s trading at a significant discount to net asset value. | 2008-09-30 | ||
| HOLD | TSX Group | X-T | 29.000 | Little bit of risk from the new trading platform, but reasonable valuation. | 2008-09-30 | ||
| N/A | A Comment -- General Comments From an Expert | A Commentary | 0.020 | Getting close to bottom, it’s very dangerous to try to call it. If you buy stocks that are at 10x earnings, even if they go down you’ll be fine a year from now. | 2008-09-30 | ||
| HOLD | Hudbay Minerals Inc. | HBM-T | 7.010 | You have to believe in zinc to buy this one. | 2008-09-30 | ||
| DON'T BUY | Quebecor World Inc. | IQW-T | 0.090 | You are just buying hope on this one. | 2008-09-30 | ||
| N/A | Canadian Tire Corporation Ltd. (A) | CTC.A-T | 49.000 | Had an earnings miss. Growth rate is slow. Not a lot of driver there. Cars are built more reliably but one could argue that people might repair them themselves. | 2008-09-30 | ||
| PAST TOP PICK | Gildan Activewear Inc. | GIL-T | 23.650 | (A Top Pick Jan 25/08. Down 32%) Had an earnings miss. Still selling lots of t-shirts. Moving production off shore will const them in the near term. | 2008-09-30 | ||
| DON'T BUY | CI Financial Income Fund | CIX.UN-T | 18.000 | Their assets are mainly equity so you expect their revenue to be down 7% as the market has been. | 2008-09-30 | ||
| BUY | Bell Aliant | BA-T | 24.990 | Reasonable valuation, reasonable dividend | 2008-09-30 | ||
| TOP PICK | Petroleo Bras Sa Petro | PBR-N | 43.950 | PBR.A-N: 15 refineries in Brazil. They have an offshore field that by 2017 could be producing a million barrels a day. They are currently producing 2.4 million barrels a day. Brazil controls the price of oil within Brazil. | 2008-09-30 | ||
| BUY | Genesis Lease Ltd. | GLS-N (Dead) | 8.740 | He is confident in this one. This is the time to buy. They have the cash they need without borrowing. | 2008-09-30 | ||
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| PAST TOP PICK | Nufarm | NUF-ASX | 0.010 | (A Top Pick Jan 25/08. Up 2%) Agricultural Play. A Chinese company did come in and make a bid and then pulled back, so you still have that potential. | 2008-09-30 | ||
| DON'T BUY | Apple | AAPL-Q | 169.550 | This one really moves on new product launches. We have had the major launches for the year therefore there is nothing to really move the stock for the next while. Also getting new competition from Research in Motion (RIM-T). | 2008-08-08 | ||
| Comment | Barrick Gold | ABX-T | 37.400 | Main gold name out there. May have called the top on the oil market when they acquired Cadence Energy in order to hedge their oil usage. Have just bought another related oil patch. Gold prices have been collapsing, which is why the stock is down. | 2008-08-08 | ||
| BUY on WEAKNESS | Agrium | AGU-T | 83.900 | Near term, he expects a pullback. They can start to grow into their earnings and next year's earnings should be better. You are buying a future stream of earnings. Would be comfortable owning it about 8X earnings as opposed to 10X or 12X where they are trading now. Could pullback another 20%. Expects flat money in the next year. | 2008-08-08 | ||
| Comment | Bank of America | BAC-N | 32.250 | In much better shape than many of the other US banks. It's starting to look like there might be a turn in financials. | 2008-08-08 | ||
| DON'T BUY | Bombardier Inc (B) | BBD.B-T | 7.820 | Has done well over the last year, but weaker over the last little while. The major order for their C series was actually a Letter of Intent, not an order. If they get it, it requires a lot of capital to get it up and running which changes the risk profile. Would be more inclined to buy CAE (CAE-T) for an aircraft related company. | 2008-08-08 | ||
| PAST TOP PICK | BCE Inc. | BCE-T | 40.040 | (A Top Pick Sept 12/07. No change.) Acquisition for $42.75 will go through and Dec 11 will be the latest. | 2008-08-08 | ||
| TOP PICK | Bank of Nova Scotia | BNS-T | 50.910 | More stable of the banks. Steady history of increasing dividends. Their Mexican subsidiary is actually earning more this quarter than it did the same quarter last year. | 2008-08-08 | ||
| BUY | CAE Inc | CAE-T | 10.950 | Have a great order backlog. New planes are being introduced and pilots have to be trained. Also getting contracts for simulators on submarines. Doing extremely well and trading around 11X next year's earnings. | 2008-08-08 | ||
| PAST TOP PICK | Canadian Imperial Bank of Commerce | CM-T | 62.350 | (A Top Pick Sept 12/07. Down 44%.) Ended up with more impact on the US side than expected. Odds are they're going to have to take another $1 billion or so write-downs again. Sold some of his holdings. Looking for better times once we are through this difficult period. Always buys this as a pairs trade with Bank of Nova Scotia (BNS-T) | 2008-08-08 | ||
| BUY | Canadian Natural Rsrcs | CNQ-T | 77.580 | The Horizon project is a company maker. Due to come on in Sept but won't be fully commissioned until the 4th quarter. Stock dropped with the price of oil. Fundamentally came out with excellent earnings and cash flow. Compelling value at these levels. | 2008-08-08 | ||
| DON'T BUY | General Motors Corporation | GM-N | 10.030 | There is massive restructuring. They are getting rid of lease problems right now. They have adequate liquidity to get through the year. Wouldn't touch this. | 2008-08-08 | ||
| BUY | Johnson & Johnson | JNJ-N | 71.550 | Stable cash flow. A solid name to own in these volatile markets. | 2008-08-08 | ||
| TOP PICK | Methanex Corp | MX-T | 27.960 | Buy back shares with their free cash flow. Over $350 million on the balance sheet. Opening a new plant in Egypt. World leader in methanol production. Methanol is used in DME, a fuel used in China similar to diesel. | 2008-08-08 | ||
| BUY on WEAKNESS | Potash Corp of Saskatchewan | POT-T | 182.990 | Near term, he expects a pullback. They can start to grow into their earnings and next year's earnings should be better. You are buying a future stream of earnings. Would be comfortable owning it about 8X earnings as opposed to 10X or 12X where they are trading now. Could pullback another 20%. Expects flat money in the next year. | 2008-08-08 | ||
| BUY | Rogers Communcations (B) | RCI.B-T | 35.200 | Great growth in the wireless. An excellent cash machine. A good play. | 2008-08-08 | ||
| HOLD | Research In Motion | RIM-T | 142.750 | US investors drive this stock so when the market is strong, this stock is strong. There were concerns a few weeks ago that their Bold initiative would be coming out later than expected but they are now shipping it into Germany. A bit ahead of itself but that is not unusual and it stays ahead of itself. He has a hard time buying it at 30X earnings. | 2008-08-08 | ||
| BUY | Sunlife Financial | SLF-T | 39.810 | Has had 2 disappointing quarters in a row. Volatile equity markets hurt companies like this. International earnings have also been weaker by the strong Cdn$. Trading at around 9X earnings, which is starting to make it attractive. | 2008-08-08 | ||
| DON'T BUY | SNC-Lavalin Group Inc. | SNC-T | 53.200 | Toll roads around the world are all weaker, which would be about $.50 of their valuation. Also bidding on some new nuclear plants and it is very lumpy whether they win them or not. Fully valued. | 2008-08-08 | ||
| DON'T BUY | Toyota | TM-N | 90.340 | Has warned that their sales are slower. People are probably going to keep their cars longer. | 2008-08-08 | ||
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| BUY | Telus Corp | T-T | 40.830 | Subscriber numbers on their wireless where extremely strong. Solid growth. Good value at these levels. | 2008-08-08 | ||
| TOP PICK | Seaspan Corp. | SSW-N | 23.120 | Leases container ships on long-term leases. Leases can run for 8 years. Leaseholder pays all fuel costs. Their obligation is to make sure ships are available and crewed. 8% distribution. Stock probably dropped because of concerns on the word “Lease”. | 2008-08-08 | ||
| Comment | Brookfield Asset Management (A) | BAM.A-T | 33.820 | Transformed themselves into more of an asset management. They take base assets with stable cash flow. Find partners and collect a fee while putting in some of their own money. Great long-term story. More fully valued near-term. It may be under a bit of a cloud for a while. | 2008-08-08 | ||
| Comment | Air Canada (B) | AC.B-T | 5.850 | Oil has a major impact on this stock. Their energy consumption was up $220 million. If you think oil is going to drop to $80, the stock will have good torque behind it. | 2008-08-08 | ||
| PAST TOP PICK | Genesis Lease Ltd. | GLS-N (Dead) | 13.540 | (A Top Pick Sept 12/07. Down 39%.) Leases modern aircraft on long-term leases on very attractive terms. 14% plus yield. Still a Buy. | 2008-08-08 | ||
| Comment | Visa Inc. | V-N | 72.600 | Get paid based on volumes of transactions, so if you are worried about any kind of slowdown, they could have a slowdown in earnings. Reasonable but not compelling value at these levels. | 2008-08-08 | ||
| DON'T BUY | Harry Winston Diamond Corp. | HW-T | 27.470 | With this, you have the mining risks and the risk of the US consumer pulling back on expense of items such as diamonds. | 2008-04-17 | ||
| HOLD | Agrium | AGU-T | 87.200 | The whole issue here is the growth in earnings. Also produce nitrogen fertilizer. More of this goes into corn. Also have the Alberta advantage of getting cheap gas. 13X next year’s earnings. | 2008-04-17 | ||
| TOP PICK | BCE Inc. | BCE-T | 37.110 | (A Top Pick Sept 12/07. Down 7%.) Still believes the deal is going to go through. You are looking at getting $42.75 by the end of June. | 2008-04-17 | ||
| BUY | CAE Inc | CAE-T | 11.720 | Would not buy this one for a takeover possibility. Reasonably priced at around 12X forward earnings. Good value. | 2008-04-17 | ||
| Comment | Cameco Corporation | CCO-T | 38.510 | One factor weighing on the stock is the big drop in the price of uranium. Also had some flooding problems with one of their mines. You have to believe in uranium prices to buy this at the current level, otherwise it will be flat. | 2008-04-17 | ||
| PAST TOP PICK | Canadian Imperial Bank of Commerce | CM-T | 68.560 | (A Top Pick Sept 12/07. Down 27%.) Currently trading at 8X next year's earnings but could see it trading at 10X over the next year, which would be a 25% increase. Still buying. | 2008-04-17 | ||
| BUY | Encana Corp | ECA-T | 84.750 | Trading around 6X cash flow and should be trading higher. It is the most levered to gas. Had flat production in 06 versus 07 but there is up production going into 08. | 2008-04-17 | ||
| HOLD | First Calgary Petroleums | FCP-T | 2.840 | (Market Call Minute.) There has been a change in management so you have to see how things play out. | 2008-04-17 | ||
| HOLD | Fording Canadian Coal Trust (Inc Trust) | FDG.UN-T | 63.190 | (Market Call Minute.) Commodity price is up, but that is reflected in the stock price valuation. | 2008-04-17 | ||
| BUY | Husky Energy | HSE-T | 43.910 | Have done a lot of things strategically well. They had heavy oil and found refineries to take it and also did joint ventures. It is cheap, but refinery margins are a little bit tight right now, which may be the perception that is keeping the stock price down. | 2008-04-17 | ||
| BUY | Kinross Gold | K-T | 25.140 | (Market Call Minute.) Has great growth with production of 1.6 million going up to 2.7. | 2008-04-17 | ||
| Comment | Laurentian Bank | LB-T | 42.390 | Has had a very nice move. He still likes the banks and this one has less risk than many of the others. 3% dividend. | 2008-04-17 | ||
| Comment | Manulife Financial | MFC-T | 38.060 | US insurers are trading at around 8X – 9X earnings and this one is trading at around 11X. Does not have subprime issues or exposure to the mono lines so it is solid, but in the environment, the market is shying from this. He prefers Sun Life (SLF-T), which is trading around 9X earnings. | 2008-04-17 | ||
| Comment | Petro-Canada | PCA-T | 51.580 | Refining margins are down, so even though they are getting $100 for oil, if you have to sell it for $1.15 at the gas station, it is less profitable. | 2008-04-17 | ||
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| Comment | Potash Corp of Saskatchewan | POT-T | 196.880 | Trading at 20X earnings. Has a great operation, but people are buying it on the basis that potash prices are going to keep rising. They just put out 1 million tons to China at a fixed price for a year so you are looking at a year before there is any significant price increase. | 2008-04-17 |
