STOCKCHASE

Jean Coutu Group (PJC) (A)

56.150

(Top Pick Mar 25/11, Up 1.26%) Pure pharma, huge in eye care, which is fastest growing part of heath care field and the third part of the business, is generics. Swiss company with dividend over 4%, no significant patent fall-off and trading at 9 or 10 times this year’s earnings.

2012-02-08

DON'T BUY

Proctor & Gamble

PG-N

63.640

Possibly greatest marketing company in the world. Very safe company, but not the cheapest. You wont get great capital appreciation at these levels. There are more attractive places to be. It is a more defensive place to be.

2012-02-08

DON'T BUY

PJC.A-T

13.090

Another dual class share company, which disqualifies it with him. Pretty well run drug store chain. Got into trouble years ago with a US acquisition and ended up selling to RightAid.

2012-02-08

TOP PICK

Sunlife Financial

SLF-T

21.170

Dividend is 7%, so not dead money. Stock market is now helping them out. Most conservative of the N.A insurance companies. Did not have to cut dividend in 2007/8 and wont have to now. Got out of US businesses that cost them money. Should have a massive earnings rebound after a write down they pre-announced. Will be about 8x earnings. Probably raising dividend again next year.

2012-02-08

BUY

Xerox

XRX-N

8.010

Got out of manufacturing about 10 years ago. Now in technology side of business and have number 1 spot. He loves it. 6 or 7 times free excess cash flow. Buy back a lot of stock. Will get great earnings growth.

2012-02-08

DON'T BUY

0.195

Bonds: Owns in high yield fund. Buying one high yield bond is always a mistake because you need to be very diversified. Believes tomorrow we will learn they are earning free cash flow. They have been paying off debt.

2012-02-08

N/A

0.020

Markets: Found attractive valuations last fall and winter. Low prices mean great dividend yields. This was what he was waiting for. Canada stock market outperformed most of rest of world until last year. Most Canadian stocks are quite a bit more expensive than stocks elsewhere. Cash down from 70% down to 50% with a lot of orders in.

2012-02-08

BUY

0.020

Lofecos: Canadian insurance companies in reasonable good shape in terms of capital. They are suffering from the stock market and that will rebound. They also suffer from long-term low interest rates.

2012-02-08

Comment

0.020

In the past bonds were yielding in excess of inflation. For 20 years, bonds outperformed stocks. Today, Inflation is 2.5% but gov’t bonds are yielding 1.5%. Regular bonds make no sense as an investment longer term. Don’t buy bonds if you want to eventually buy and hold stocks later on.

2012-02-08

Comment

0.020

Dividend paying stocks that don’t have a lot of growth move with interest rates. Rates go down and stocks go up. Real return bonds go up when people expect inflation to rise.

2012-02-08

DON'T BUY

Mastercard Inc.

MA-N

394.910

Totally tied to consumer spending. Legislation in the states could crimp margins. Had a great run and certainly not a value stock.

2012-02-08

PAST TOP PICK

0.010

(Top Pick Mar 25/11, Flat) Turned out to be right. His cash position is heading down and he is at 50%.

2012-02-08

PAST TOP PICK

iShares Adv. Short Duration High ETF

0.010

(Top Pick Mar 25/11, Down 14.88%) Perception is that Japan, which they were slow to rebuild, and they are in infrastructure, is slow to roll it out so they should get a good earnings boost over the next 3 years. Trading for less than its working capital and whole company is for free.

2012-02-08

BUY

CSD-T

19.740

Reality is that spreads are very wide so you are getting paid a lot of money. With shorter duration of their bonds, you wont suffer too much if bonds interest rates go up.

2012-02-08

BUY

12.210

Huge capacity of extra ships coming online. All of these guys are loosing money. Good news is that every year ships get scrapped because they are not efficient. There are a record number of new ships being ordered. 2011 will turn out to be the bottom of the trough for them. Because of Iran, a lot of buyers of oil will have to buy oil by ship, which will be a net benefit for these guys.

2012-02-08

TOP PICK

Nippon Antenna

6930-JP

0.000

Crazy cheap Japanese company that is trading for less than its net cash. You get the company for free. 3.5% dividend. There is an antenna in every cell phone and antennas are a huge growth company. 7x earnings.

2012-02-08

TOP PICK

Alcoa

AA-N

10.400

Cyclical company. Low cost aluminum producer. China is actually a high cost producer. Have cheap electricity. A light metal that will double in demand. Earnings have bottomed out.

2011-11-01

DON'T BUY

39.210

Strong management team. Share price is up. Not worth more than what it trades for today. Single digit growth. Doesn't fit his criteria.

2011-11-01

DON'T BUY

Bank of Montreal

BMO-T

57.410

Got into trouble during financial crisis. Would not be a buyer here.

2011-11-01

DON'T BUY

Canadian Natural Rsrcs

CNQ-T

34.050

With sluggish growth outlook in economy and Libya shipping oil in next 6 months, so thinks CNQs cash flow will suffer. Prefers Royal Dutch Shell. Oil prices in a sluggish economy don’t have to fall off much to have a negative impact.

2011-11-01

BUY on WEAKNESS

General Electric

GE-N

16.020

A better company than in 2000. Reduced risk by reducing financial services. Really well run company and dividend is secure. He would own it if it fell to $13

2011-11-01

TOP PICK

Corning Inc

GLW-N

13.890

Dot com darling. Management did an amazing transition. Not a lot of competition. Earnings will stay flat. 3D TV is next. Incredibly well positioned.

2011-11-01

DON'T BUY

Laurentian Bank

LB-T

44.520

Pretty well run bank in province of Quebec. Consistently good management for a decade or so, but shares are not cheap. Wont be purchased because they have a union.

2011-11-01

BUY

Manulife Financial

MFC-T

12.420

Has dealt with bulk of issues that got them in trouble. Great Asian operations and at this price, a ton of upside in this stock.

2011-11-01

BUY

Microsoft

MSFT-Q

25.990

Doing a lot of interesting things and surprised on the upside. Missed his entry price. Huge push into wireless LAN side. If successful it could be a big boost with MSFT.

2011-11-01

PAST TOP PICK

Potash Corp of Saskatchewan

55.280

(Top Pick Mar 25/11, Up 0.47%) held for many years. Have great dividend yield. Growth area is eye care. Incredibly well positioned. Also have big generics company.

2011-11-01

WAIT

POT-T

46.500

Great company, incredibly well positioned. Shares have bounced back a little bit. Wait a bit. Long term it is a good growth story. It is not cheap enough yet. Subsidies for ethanol are going away, requires corn, so crops will be replaced by something else.

2011-11-01

DON'T BUY

Rogers Communcations (B)

RCI.B-T

36.410

As increased dividend because they see wireless growth slowing. Growth potential is low. Better places to be. Well run business but not cheap enough.

2011-11-01

DON'T BUY

Research In Motion

RIM-T

19.650

View has not changed. Problem is that they are no longer cool and are loosing market share quickly. Amazing how fast they can sink when that happens. RIM will have to spend a lot of money to get themselves back in the game. RIM has become a peanut in this business.

2011-11-01

BUY on WEAKNESS

Royal Bank

RY-T

47.040

The market is getting close. First time he has not owned them. Would buy at $45. Dividend is pretty damned attractive. Likes TD and BNS as well.

2011-11-01

BUY

Sunlife Financial

SLF-T

23.950

Likes the story. On of the few life insurance companies that did not have to cut dividend or raise capital during the financial crisis. Low interest rates are bad for legacy business they gave written. Some will unwind itself over the next few quarters. Dividend yield is rock solid at almost 6%. Largest foreign life insurance company in India. It is growing like gangbusters there.

2011-11-01

DON'T BUY

Talisman Energy

TLM-T

13.770

Descent assets in Vietnam and Asia but it will be tough for this company.

2011-11-01

DON'T BUY

Thomson Reuters Corp

TRI-T

29.700

Great company. Sold newspaper division at an opportune time. Has always been an expensive company. Their largest business is the markets side and that business has been suffering. Earnings growth is questionable at the present. Great management running a company in a tough industry. Dividend payout ratio is high.

2011-11-01

BUY

Alimentation Couche-Tard (B)

0.330

July 2013 bonds. Earnings this Thursday. Everyone is waiting to see how bad this will be. Cut dividend and that save money. May be throwing off free cash flow. 6.5% coupon.

2011-11-01

BUY

ATD.B-T

30.080

Phenomenal management team, show growth business. Acquired and squeezed costs out of companies. Only Canadian retailer to succeed in US.

2011-11-01

N/A

0.020

Market: Just when you thought they were starting to get things together, they decide to take the decision to the people. If Greeks vote to leave Euro, they will have a default and then drive on. This would be uglier than staying with the Eu. It is creating volatility in the markets and for guys like him with cash it could be an opportunity. Countries around the world have austerity programs to reduce debt. We are in for a pretty sluggish time. He is buying companies that got hit badly, e.g. AA-N.

2011-11-01

DON'T BUY

0.020

Genworth 5.68, June 2020. Potential risk of going under and yield does not compensate you for it.

2011-11-01

PAST TOP PICK

0.010

(Top Pick Mar 25/11) Was recommending 70% then, now 50%. He has set prices on a bunch of different companies and if it is not trading at that price, he just waits.

2011-11-01

PAST TOP PICK

0.010

(Top Pick Mar 25/11, Down 24.91%) Trading for about half its cash. Prime Minister is about ready to pump money into the Japanese economy, so we should see a huge earnings rebound.

2011-11-01

HOLD

13.050

A survivor in a very tough industry. Suffering from high oil prices and Libya is not shipping oil. You have to sit with this company. He added to his recently.

2011-11-01

TOP PICK

Yamaha Corp.

7951-HK

0.000

Great maker of piano, keyboards and A/V equipment. No debt. A third of the price is their holding in Yamaha motors. A third is cash. Global business that is incredibly cheap.

2011-11-01

TOP PICK

Allstate

ALL-N

24.320

Less than tangible book value. Earnings poised to take a massive jump. Home insurance rates have a healthy increase. There is huge upside here.

2011-09-20

DON'T BUY

Bank of America

BAC-N

6.900

Warren Buffet loaned them money and if the stock bounced up it is a bonus for him. Messed up with Merrill Lynch acquisition for them and it cost them market share. There are better situations to buy. Why take the risk.

2011-09-20

DON'T BUY

Bombardier Inc (B)

BBD.B-T

4.210

Doesn’t like it and would not own it because of the dual class share structure. They are facing a coupe of issues: leverage and C series many not get enough support to come out with it. Airlines are having a touch time right now.

2011-09-20

BUY

38.150

Increasing smart phones, which is the driver of all wireless business. It is relatively fully valued but he sees earnings growth and dividend growth, so if you want a good solid dividend payer, you will also get some dividend growth. They are doing a good job.

2011-09-20

WAIT

Cameco Corporation

CCO-T

20.240

Has looked at it quite recently. Nuclear disaster in Japan caused share price to come down. They generate free cash flow, well run. In process of acquiring more properties in Saskatchewan. Germany is eliminating their nuclear program and it will negatively affect CCO.

2011-09-20

WAIT

Canadian Pacific Rail

CP-T

50.820

He said he would consider the shares if they hit $50. Earnings are more cyclical than CNR-T. Well run Canadian business. We wont rush out to buy because of economic outlook. It is not attractive enough.

2011-09-20

BUY

General Electric

GE-N

16.040

Down 75% since year 2000. Finally trading at a reasonable value, dividend of 3.5% easily covered by earnings. Is a great company but an average value.

2011-09-20

HOLD

Great West Lifeco

GWO-T

20.660

Doesn’t think market hates it so much as all the insurance companies including MFC and SLF. These companies all have exposure to the equity markets. Interest rates are also low and a large chunk of their income comes from interest investments. He still owns some of the others. They are well run long term.

2011-09-20

WAIT

Intel

INTC-Q

22.200

Always been a cyclical company. A great company, strong cash position, reasonable dividend, but no huge upside from here. Buy in high teens.

2011-09-20

PAST TOP PICK

Koninklijke Philips Electronics

55.380

(Top Pick Mar 25’11, Up 0.41%) Flat in a pretty down market. Acquisition in eye care laser surgery business is doing well. Impeccably well positioned. Great pipeline, not a lot coming off patent, and they are in generics. Well positioned.

2011-09-20

TOP PICK

PHG-N

17.800

Down 50% from high. Here is a great opportunity. Global leader in lighting business. It is going through a revolution due to LED lighting. These guys are at the leading edge of the revolution. Large growth from their healthcare business. 6% dividend.

2011-09-20

DON'T BUY

Research In Motion

RIM-T

22.600

Has a lot of things going against it. They lost their mojo. Have been coming out with devices late for the last couple of years and they are almost as good as the competition. Just too much downside. QNX is not out until next year and yet iPhone5 is coming soon.

2011-09-20

WAIT

Royal Bank

RY-T

47.040

One of the first times in his career when he was not an owner of Canadian banks. Canadian housing market is poised to soften at some point. He sees some downside in the banks. Dividends are secure but he thinks they have more to fall. If another 10% dip he would be buying. Fantastic franchise.

2011-09-20

TOP PICK

Xerox

XRX-N

7.760

This is not your father’s Xerox. Almost no manufacturing any ore. After an acquisition recently two thirds of business is outsourcing. Throw off great free cash flow, great balance sheet. Using free cash flow to buy back a huge chunk of outstanding shares this year and next. Remaining shares will grow in value from the buybacks. Growing and with very steady earnings. Dividend increase expected.

2011-09-20

BUY

0.550

Bonds & Preferred shares – could they default. He owns bonds due in 22 months time with 17% yield. In his opinion they cannot default in 22 months because of sales of auto-trader. They cut distribution to free up some free cash flow. They have the money to cover the bonds in 22 months. No default on them.

2011-09-20

DON'T BUY

Armtec Infrastructure

ARF-T

1.630

Had a major pull back but not looking inexpensive. Banks didn’t want to loan them any more money. Stuck with long term, non-profitable contracts. Management has been a disaster. There’s a huge class action lawsuit.

2011-09-20

N/A

0.020

Deep value means not relative value investing. Only buy things when they are very, very cheap otherwise stay in cash. If market gets hammered and you bought relatively cheap, you still get hammered. Since 2000, Canadian investors have not made money in equities. The real key is to only buy when it is really, really cheap. His outlook is gloomy. The economic news is going to be pretty bad going forward for the next 12 months. Patient investors who hold cash will do well.

2011-09-20

Comment

0.020

Market Bottom. You never realize it would happen until 6 months after the fact. You need to start buying when they are cheap and then continue to add positions until the bottom. The great thing about companies that can still pay their dividends is that the dividends get really attractive.

2011-09-20

PAST TOP PICK

Bank of Ireland (Gov & Co)

0.010

(Top Pick Mar 25’11) Was at 70%.

2011-09-20

DON'T BUY

IRE-N

1.040

They all imploded. The government had to take over a huge chunk just to keep it surviving. Irish economy is still in poor shape. So many new shares issued that they will not come back to a fraction of where they were. No interest.

2011-09-20

PAST TOP PICK

0.010

(Top Pick Mar 25’11, Down 22.49%) Will be a huge beneficiary of the rebuild in Japan.

2011-09-20

STRONG BUY

16.560

Just added to it. Has been a huge amount of insider buying. Looks like this will be the bottom quarter for them. Worst appears to be over. Looking for upside surprises. Addition of Libyan oil to the market will bring prices down for oil and be a benefit for OSG.

2011-09-20

DON'T BUY

Bank of America

BAC-N

10.070

Still trying to fix themselves and have a large exposure to the US housing market. There are better companies to own.

2011-07-14

DON'T BUY

38.050

Has had a great run and is around because of the dividend. Management did a great job wringing out costs. Getting growth in wireless, but landlines is a pretty dead business. Fully valued.

2011-07-14

TOP PICK

Cisco

CSCO-Q

15.430

$85 billion market cap and $25 billion in net cash. #1 globally in all its major businesses, which are growth businesses. Stumbled badly when they got into a lot of consumer businesses. In the process of extracting themselves from these businesses. Expect the stock will be double in the next 3 years.

2011-07-14

HOLD

Great West Lifeco

GWO-T

24.210

Like all insurance companies, it is quite exposed to the equity markets. There is a lot of fear that if equity markets go down, this will have a direct impact on this company. This is a great company and incredibly well-financed.

2011-07-14

BUY

Manulife Financial

MFC-T

16.030

Sees good upside from here. Hedged some of the risks to the stock market, but not all of them.

2011-07-14

Comment

Morgan Stanley

MS-N

21.110

Has been looking at this one recently. Got battered like every big US brokerage firm. Have great Japanese exposure. Recapitalized and have reduced their risk level in a significant way. There will be big dividend growth.

2011-07-14

PAST TOP PICK

61.350

(A Top Pick March 25/11. Up 10.68%.) One of the few drug companies that is actually growing its earnings. Made a great acquisition in the eye care business, which is probably the fastest growing area in the medical/pharma business. Incredibly cheap.

2011-07-14

HOLD

Power Financial Corp

PWF-T

29.040

Controls Great West Life (GWO-T) and Investors Group (IGM-T). The latter is one of Canada's largest mutual fund companies and is a fantastic business as mutual fund fees are very high.

2011-07-14

DON'T BUY

Research In Motion

RIM-T

26.180

No debt and a great long-term track record. Trading at 5X trailing earnings. The whole cell phone/wireless market has really become a consumer dominated market. This one has suddenly become uncool. Missed the last product cycle. Being something that is almost as good is not good enough. Also losing a lot of ground on the corporate side.

2011-07-14

DON'T BUY

Superior Plus Corp

SPB-T

11.260

Doesn't own stocks but does own bonds. Like a lot of income trusts, they were so used to paying out high distributions they have trouble cutting back.. Paying out too much of their earnings and are rated below investment grade. Also exposed to US housing.

2011-07-14

Comment

Teva Pharmaceutical

TEVA-Q

48.430

Making all kinds of generic drugs and also do their own research/development and doing non-generic drugs as well. Not cheap enough for him to buy.

2011-07-14

DON'T BUY

Vodafone Group PLC

VOD-Q

25.780

Whole telecom area looks cheap on a price/earnings basis. All struggling with growth. Good dividend yields and look very safe but pricing is coming down for everybody in the sector. Growth prospects are getting tougher to come by. Will have trouble generating earnings growth.

2011-07-14

DON'T BUY

Archer Daniels Midland Company

2.170

Relatively well-managed. They should eliminate their dividends. Have way too much debt. Will be downgraded. Owns some bonds.

2011-07-14

Comment

ADM-N

29.890

Into everything to do with what goes into food, grains, edible oils and the like. A major global player. Have a lot of pricing power. Have been looking at this, but it is a little too expensive.

2011-07-14

Comment

0.020

Markets. His macro view is that there are very serious risks out there, Europe obviously being one of them. Europe doesn't know what to do with Greece, Portugal and the like. Can't allow default as it will kill the banking system. US economy is in terrible shape. Also, inflation has been rising and interest rates will be rising over time. Investors should have a very large cash position. He has about 65% in cash.

2011-07-14

Comment

0.020

How should a portfolio of Corporate Strip Bonds deconstructed? (Should only own these in non-taxable accounts.) Yields are relatively low so you want to make sure you are taking virtually no risk, so stick to the highest quality. Ladder then from 1 to 7 years giving you an average of 3.5 years. If rates go up, you have a maturity.

2011-07-14

SELL

Bell Aliant

BA-T

28.500

Has had a great run and is around because of the dividend. Basically a zero grower. Fully valued. Interest rates will be going up at some point. Would sell if he owned it.

2011-07-14

DON'T BUY

Catalyst Paper Corp.

CTL-T (dead)

38.540

Has been very tough sledding for a lot of the paper industry. The newsprint part has been horrendous. This one has about 2 to 1 debt to equity. This company will go bankrupt and the shares will go to zero.

2011-07-14

PAST TOP PICK

iShares US High Yield Bond Index ETF

0.010

(A Top Pick March 25/11.) 65% in cash.

2011-07-14

PARTIAL SELL

XHY-T

21.010

US High Yield Bond market has actually had a massive rebound since their financial crisis. What worries him about the sector is that there are a lot of relatively weak quality issuers who have been raising money in a 6%-7% range. This is way too cheap a coupon for some of them to pay. If you own, consider scaling back.

2011-07-14

PAST TOP PICK

0.010

(A Top Pick March 25/11. Down 13.06%.) Japanese engineering company that will be a huge beneficiary of the huge rebuild in Japan. Rebuild is taking longer than expected so shares are down. Trading for less than its cash. Still a buy.

2011-07-14

TOP PICK

25.860

Largest shipper of crude oil globally. Very cyclical business and the only time you should buy them is when they are losing money, there is overcapacity and everything looks terrible. Dividend in the 7% range. A lot of insider buying.

2011-07-14

TOP PICK

Takasago International

4914 TSE

0.010

(Tokyo Exchange) One of the largest fragrance and flavour companies globally. Make things for perfumes and food flavouring. Trading at a huge discount to tangible book value. 2% dividend yield. Over double digit growth. Trading at less than 10X earnings.

2011-07-14

DON'T BUY

Bombardier Inc (B)

BBD.B-T

6.420

Used to have terrible balance sheet problems. They’ve always had a lot of debt. Dual class structure means that only family has the vote.

2011-03-25

DON'T BUY

35.010

A very low growth situation. They have done a great job managing costs. Dividend is safe, but there won’t be any growth.

2011-03-25

WAIT

Bank of Montreal

BMO-T

62.140

Canadian banks in the best shape of any banking system in the world. BMO is not in as good shape as the others. But dividend is secure. None of the banks are really cheap. We are looking at the Canadian economy to slow down a bit from here. There will probably be a better buying opportunity.

2011-03-25

DON'T BUY

CGI Group (A)

GIB.A-T

20.020

A Montreal success story. They go into companies and do their IT for less cost, saving the client money. Doubled in the last two to three years. Trading on the highest valuation since the ,com days, so there is nothing left in the stock.

2011-03-25

PAST TOP PICK

ING Groep NV

ING-N

13.070

(Top Pick Jan 24/11, Up 18.54%) Did get itself in trouble during the collapse. Will be spinning off their two global insurance businesses. Said they would sell ING direct if they get the right price. Trading for less than book value. The breakup value of the company is $25.

2011-03-25

DON'T BUY

Loblaw Companies Ltd

L-T

38.260

Done a fantastic job of restructuring itself.. But he wouldn’t buy it. Biggest problem is Walmart. They are building out their food print in a huge way in Canada. Would be interested at $30

2011-03-25

TOP PICK