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Compiling comments that experts make about stocks while on public TV.

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Date Signal Company Expert Opinion Price
2016-02-12 N/A A Comment -- General Comments From an Expert
A Commentary
Jason Mann

Markets. Looking at Price to Book Values on the TSX, it looks like a market bottom. There are lots of value signs, but stocks can stay cheap for a long time. Valuation is not a great catalyst for things to change. A 3rd of our market now trades below Price to Book. That has only happened 3 other times, 1982, 2000 and 2008. All 3 near cyclical lows for value stocks, 2000 being the exception where the market continued lower, but it was the high growth Internet stocks that rolled over, and more traditional cyclical value stocks did very well for the next couple of years. We are also 21 months into the bear market in Canada, which is well beyond the average of 11 months. From a US investor perspective, which does matter, Canada is down 45% from its highs. That should ultimately attract them. A US buyer not only gets the currency play, but also access to stocks that are well below Book Value in many cases. $7 trillion of government bonds globally are now trading at a negative yield, so the world is now pricing in this deflation scenario, this risk of global negative interest rates. It took a Fed rate hike to get treasuries to rally and yields to fall off. There is irony that the Fed is trying to raise rates, and the only thing that has happened is that rates have gone down. This is because Japan, Europe and other countries are using negative interest rates as a policy tool, which is what is crushing their banks. Overall the market is discounting this scenario of a US recession, which probably isn’t in the cards. He sees weakness currently in manufacturing in the US. Not particularly surprising given that energy is a large part of CapX. Energy is dragging down that part of the market, but we are seeing strong employment growth and wage pressure increase, which ultimately translates lower profit margins for companies, but more discretionary spending by consumers, and we are seeing a really strong service sector. The overall economy, when you combine it, is still strong. Doesn’t think we are on the precipice of a new recession, and thinks stocks are starting to discount that.


Price: $0.020
Subject: NORTH AMERICAN
Bias: CAUTIOUS
Owned: _N/A
2016-02-12 COMMENT A Comment -- General Comments From an Expert
A Commentary
Jason Mann

Energy. In general, stocks are cheap and a lot of them are trading below BV. For a 10 year hold, from a sector perspective you want to be rotating into them. However, on a case-by-case basis, some may not make it. A lot have far too much debt and will have to do some restructuring, whether it is issuing equity which will dilute you, reducing or eliminating the dividend, or the worst-case scenario, the bondholders becoming the new equity holders. You are probably better off getting into something like iUnits S&P/TSX Capped Energy ETF (XEG-T), and at least you’re balancing your exposure between the good and the bad. Or look for the strongest balance sheets that can at least generate cash flow somewhere in the 30s or 40s. Be very selective.


Price: $0.020
Subject: NORTH AMERICAN
Bias: CAUTIOUS
Owned: Unknown
2016-02-12 COMMENT A Comment -- General Comments From an Expert
A Commentary
Don Vialoux

Gold. This rally looks very sustainable. Gold and precious metals in general do very well right through until the prospectors’ convention Mar. 6th to 9th this year. That is a typical period of seasonal strength and it looks like we will have continuing follow-through. Just be aware that you will have only 5-6 weeks to go.


Price: $0.020
Subject: TECHNICAL ANALYSIS & SEASONAL INVESTING
Bias: UNKNOWN
Owned: Unknown
2016-02-12 N/A A Comment -- General Comments From an Expert
A Commentary
Don Vialoux

Markets. They’ve been brutal since the beginning of January. Earnings on the S&P 500 companies have been down 4% on a year-to-year basis. That’s the bad news. The good news is that we have just completed a volatility spike. Historically, when you get a spike in VIX-N, once it is over it sets the stage for markets to move significantly higher. The TSX Composite since Jan 21 is already up 7%, so we are already starting to move to the upside. Seasonality is positive right through until the beginning of May for both Canada and the US. In the last 2 weeks, markets have been choppy, but have been forming a nice little base. Today we had a very, very strong bounce from some very critical levels technically. So the stage is set for US and Canadian equity markets to significantly go higher until May.


Price: $0.020
Subject: TECHNICAL ANALYSIS & SEASONAL INVESTING
Bias: UNKNOWN
Owned: _N/A
2016-02-12 COMMENT A Comment -- General Comments From an Expert
A Commentary
Don Vialoux

Canadian $. This has a period of seasonal strength from the beginning of March through until the end of April. This coincides with the strength in oil and an improving industrial production. The bad news is that technically we are in a long downward trend. There are some early signs of bottoming which is fairly encouraging. You want to see more confirmation that it has actually reached its low.


Price: $0.020
Subject: TECHNICAL ANALYSIS & SEASONAL INVESTING
Bias: UNKNOWN
Owned: Unknown
2016-02-12 COMMENT A Comment -- General Comments From an Expert
A Commentary
Don Vialoux

Energy. The energy sector is set up for a major move during the next few months. The period of seasonal strength is from the 3rd week in January right through until May of each year. We are already seeing technical signs that the Canadian energy sector is in gear already. Forming a nice little base pattern and about to take another move on the upside.


Price: $0.020
Subject: TECHNICAL ANALYSIS & SEASONAL INVESTING
Bias: UNKNOWN
Owned: Unknown
2016-02-12 HOLD Bird Construction Income Fund
BDT-T
Jason Mann

Has held in remarkably well given the manufacturing slowdown in Canada. One of his largest holdings in one of his funds. One of the 2 cheapest stocks in the universe that he covers. A really strong ROE at 23%. Trading at 4.5X Price to Free Cash Flow, so is really cheap. Dividend yield of 6.5%. Pristine balance sheet.


Price: $11.760
Subject: NORTH AMERICAN
Bias: CAUTIOUS
Owned: Yes
2016-02-12 BUY Bank of Nova Scotia
BNS-T
Jason Mann

A good Buy at these levels. This has been hurt with the resource selloff, as they have a fair amount of Latin America exposure. All the banks are discounting or have already discounted the oil price decline in Canada. There has been US Shorting on our bank names because of assumed real estate exposure. However, he thinks valuation is attractive on pretty much all the banks. Yield of about 5%.


Price: $54.020
Subject: NORTH AMERICAN
Bias: CAUTIOUS
Owned: Unknown
2016-02-12 BUY Brookfield Property Partners
BPY.UN-T
Jason Mann

A well-run company with a good yield of 5.7%. Scores in the top 20% for price momentum. Despite its recent pullback, it is still relatively stable. A relatively low volatility stock. They’ve also been acquiring other Brookfield assets, and will probably continue to do so, giving them some built-in growth. Valuation is the problem. Trading at 30X EBITDA, and carries a fair bit of debt. However, a solid operator. Would have no problem owning this for its stability and yield.


Price: $26.070
Subject: NORTH AMERICAN
Bias: CAUTIOUS
Owned: No
2016-02-12 WAIT CitiGroup
C-N
Don Vialoux

Historically US banks start to show positive performance around this time of year, and move higher right through until approximately the beginning of May. Seasonality is clicking in, but technically the stock is in a downward trend and has yet to show signs of even trying to form a bottom. Has been underperforming the market and is trading below its 20 day moving average. Short-term momentum indicators are negative. Not a good one to buy. Wait until there are signs of it bottoming.


Price: $37.540
Subject: TECHNICAL ANALYSIS & SEASONAL INVESTING
Bias: UNKNOWN
Owned: Unknown
2016-02-12 DON'T BUY Cameco Corporation
CCO-T
Don Vialoux

The period of seasonal strength is normally from October right through until the end of February. It is clearly not happening this year. Technicals are not good. Stock has been in a long downward trend. Broke through its 20 day moving average.


Price: $15.850
Subject: TECHNICAL ANALYSIS & SEASONAL INVESTING
Bias: UNKNOWN
Owned: Unknown
2016-02-12 PAST TOP PICK Chorus Aviation Inc
CHR.B-T
Jason Mann

(A Top Pick Sept 8/15. Down 4.49%.) More or less flat, but pays a nice dividend yield of just over 9%. A feeder for Air Canada (AC-T). This remains a cheap stock. Solid ROE’s at 20%. 5X EBITDA.


Price: $5.170
Subject: NORTH AMERICAN
Bias: CAUTIOUS
Owned: Yes
2016-02-12 TOP PICK Canadian National R.R.
CNR-T
Jason Mann

(Canada is cheap from a cyclical basis, so his 3 Top Picks are ones that fit that theme and are cheap with good price momentum.) Transports led the market down, however at this point they are starting to lead. He is seeing a divergence between transports and the broad market. This is best in class. Great set of assets. Valuation has always been strong. Scores in the top 20% for low volatility. This is one to hold for the long-term, and will benefit from a cyclical recovery. Dividend yield of 1.96%.


Price: $76.540
Subject: NORTH AMERICAN
Bias: CAUTIOUS
Owned: Yes
2016-02-12 COMMENT Crescent Point Energy Corp
CPG-T
Jason Mann

Definitely a “go to” name for the Canadian retail space, but would not be his 1st pick for energy. You can get companies cheaper that have better price momentum. Pays a good yield, but that alone is not a good reason to own energy stocks. Reasonably valued, kind of the middle of the pack, but high volatility, negative ROE’s and they don’t make money yet at these oil prices. Would prefer something like Raging River (RRX-T) or Granite Oil (GXO-T). Has a small Short on this. (See Top Picks.)


Price: $14.430
Subject: NORTH AMERICAN
Bias: CAUTIOUS
Owned: Yes
2016-02-12 PAST TOP PICK PowerShare's DB Commodity E.T.F.
DBC-N
Don Vialoux

(A Top Pick Nov 30/15. Down 11.91%.) An example of the right idea but the wrong investment product. The idea was that the US$ was peaking at 100, and was going to start going lower, which was going to help commodity prices in general. It turns out this particular product is heavily weighted in energy.


Price: $12.500
Subject: TECHNICAL ANALYSIS & SEASONAL INVESTING
Bias: UNKNOWN
Owned: No
2016-02-12 WATCH Denison Mines Corp
DML-T
Don Vialoux

Not sure of the seasonality, but technicals are very interesting. Has been forming a nice little base pattern, unlike Cameco (CCO-T). Has been outperforming the TSX in the last few weeks, has positive momentum and has been forming a trading range. If it breaks above the resistance level, then you are going to see the stock take a move, probably back up close to the $1 level. Watch for encouragement from the company, particularly on the exploration front.


Price: $0.610
Subject: TECHNICAL ANALYSIS & SEASONAL INVESTING
Bias: UNKNOWN
Owned: Unknown
2016-02-12 BUY Dollarama Inc.
DOL-T
Jason Mann

One of his largest holdings in 2 of his funds. This has always been a stock with good valuation, and they continually beat on earnings. Pristine balance sheet. Fantastic ROE at 55%. Quite a defensive, stable stock.


Price: $71.600
Subject: NORTH AMERICAN
Bias: CAUTIOUS
Owned: Yes
2016-02-12 PAST TOP PICK FT AlphaDEX Cdn. Dividend ETF
FDY-T
Don Vialoux

(A Top Pick Nov 30/15. Down 9.98%.) This was chosen because it was a smart ETF that was supposed to outperform the US equity market. It outperformed the S&P 500, but everything went down, which meant you lost less then if you had actually held the market.


Price: $16.160
Subject: TECHNICAL ANALYSIS & SEASONAL INVESTING
Bias: UNKNOWN
Owned: No
2016-02-12 TOP PICK First Trust AlphaDEX U.S. Industrials Sector Index ETF
FHG-T
Don Vialoux

The seasonality is positive right around the 3rd week of January through until May of each year. On a technical basis, the US industrial sector has already bottomed and is starting to outperform the market. If you think about it, a good part of the industrials consists of transportation companies, and transportation companies are going to benefit significantly from lower fuel costs which will boost their earnings going forward. That whole sector is really starting to come on stream.


Price: $19.660
Subject: TECHNICAL ANALYSIS & SEASONAL INVESTING
Bias: UNKNOWN
Owned: No
2016-02-12 HOLD Alphabet Inc. (A)
GOOGL-Q
Don Vialoux

The company has not been around long enough to give a seasonality assessment. However, the technicals look reasonably good. The chart shows that it is in an upward trend and is outperforming the market. In the last couple of weeks it has had a bit of a difficult time, but the scenario is quite positive on a technical basis. Watch the technicals very, very closely. If they show signs of rolling over, that will be an opportunity to take some profits.


Price: $706.890
Subject: TECHNICAL ANALYSIS & SEASONAL INVESTING
Bias: UNKNOWN
Owned: Unknown
2016-02-12 SELL Hudson Bay Co.
HBC-T
Jason Mann

Still a Sell for him. Has a Short on it in all 3 of his funds. It has never been there from a valuation perspective. The retail operation continues to struggle. Occasionally gets a pop because of their real estate asset that is supposed to be spinning into a REIT, but never seems to materialize. Too much debt. 11X EBITDA. Trading at 30X earnings. Very low ROE at about 5%.


Price: $14.980
Subject: NORTH AMERICAN
Bias: CAUTIOUS
Owned: Yes
2016-02-12 COMMENT Interfor Corp
IFP-T
Don Vialoux

Normally forest product stocks do very well from the middle of October right through until April of each year. Recently came back to its low of October. Technically it has come back to support which is a good sign. A bounce from these levels implies that you are going to get a test of the previous high, and if you got a breakout above that level, that would be very, very bullish. There is still some time for the seasonal trade. Probably a good Hold at these levels if not a good Buy for a trade into April.


Price: $10.170
Subject: TECHNICAL ANALYSIS & SEASONAL INVESTING
Bias: UNKNOWN
Owned: Unknown
2016-02-12 DON'T BUY Inter Pipeline
IPL-T
Jason Mann

Had been Short this. An expensive company and has got pretty lousy price momentum, and given its status as a pseudo-utility, it is pretty poor. High yield of about 7.5%, but has a high payout ratio, which should be questioned. Could be at risk of having a dividend cut. Reasonably low ROE and trading at 26X Free Cash Flow. Not something he would want to hold here.


Price: $20.750
Subject: NORTH AMERICAN
Bias: CAUTIOUS
Owned: No
2016-02-12 PAST TOP PICK iShares Russell 2000 ETF
IWM-N
Don Vialoux

(A Top Pick Nov 30/15. Down 18.55%.) This was a disaster. What normally happens from the beginning of December through to the 1st week of March, is that the small caps outperform the big caps. It didn’t happen this year.


Price: $96.590
Subject: TECHNICAL ANALYSIS & SEASONAL INVESTING
Bias: UNKNOWN
Owned: No
2016-02-12 COMMENT iShares Dow Jones Transport ETF
IYT-N
Don Vialoux

This includes all the US railroads as well as the airlines. This has just entered into a period of seasonal strength which continues right through until May of each year. Of greater importance, the transportation sector has started to show signs of outperformance in the last couple of weeks. Has started to outperform the market which is really important at this time of the year. It could get back to the $151 level during this period of seasonal strength.


Price: $126.380
Subject: TECHNICAL ANALYSIS & SEASONAL INVESTING
Bias: UNKNOWN
Owned: Unknown
2016-02-12 COMMENT Kinross Gold
K-T
Don Vialoux

This has had a huge move in the last little while. Had a break above a base building pattern. Technically you have to like this stock. On a seasonal basis, this does very well right through until around the end of February, or approximately when the annual prospectors’ convention is held in Toronto, March 6-March 9. During their convention, that is a great time to take some very good profits.


Price: $4.170
Subject: TECHNICAL ANALYSIS & SEASONAL INVESTING
Bias: UNKNOWN
Owned: Unknown
2016-02-12 HOLD Manitoba Telecom Services
MBT-T
Don Vialoux

Because he considers this to be a utility stock, utility stocks normally do very well in the summertime. Technically it looks very good. Recently broke to a new high. It’s in an upward trend and is outperforming the Canadian market and is above its 20 day moving average. RSIs are positive. A very attractive situation.


Price: $32.050
Subject: TECHNICAL ANALYSIS & SEASONAL INVESTING
Bias: UNKNOWN
Owned: Unknown
2016-02-12 WATCH Magna Int'l. (A)
MG-T
Don Vialoux

Seasonality for this and the auto industry in general is from around the end of February right through until May of each year. The key is to watch for the possibility of the seasonality characteristics coming into the stock sometime around the end of this month. Technically, it is not so good right now. It’s in a downward trend and is underperforming the market. Short-term momentum indicators are still on the downside. Around the end of this month, if the technicals start to show signs of bottoming, that will be the opportunity to Buy.


Price: $45.830
Subject: TECHNICAL ANALYSIS & SEASONAL INVESTING
Bias: UNKNOWN
Owned: Unknown
2016-02-12 COMMENT Metro Inc (A)
MRU-T
Jason Mann

This scores in the top 10% for him. Valuation is great and is in the top 15%. A low volatility stock. ROE is 20%. It is defensive in nature. Pays a small dividend.


Price: $40.500
Subject: NORTH AMERICAN
Bias: CAUTIOUS
Owned: Unknown
2016-02-12 BUY National Bank of Canada
NA-T
Jason Mann

Just did an equity raise, because of their Maple bank that got shut down in Germany recently, where they took a loss. Thinks the market got a little too fussed about that, as it is not too material for this bank. Just over 7X PE. 5.8% dividend yield. A good stable company that is not going anywhere.


Price: $36.790
Subject: NORTH AMERICAN
Bias: CAUTIOUS
Owned: Yes
2016-02-12 DON'T BUY NYX Gaming Group Ltd
NYX-X
Jason Mann

Gaming stocks had their run about a year ago, and since then they have all come off. He would not recommend this, strictly on a valuation basis. Price momentum is okay, but is volatile. Value is not there. A lot of these gaming companies don’t really have a lot of cash flow today. You are banking on cash flow materializing in the future, which makes it really hard.


Price: $2.500
Subject: NORTH AMERICAN
Bias: CAUTIOUS
Owned: No
2016-02-12 TOP PICK Open Text
OTC-T
Jason Mann

(Canada is cheap from a cyclical basis, so his 3 Top Picks are ones that fit that theme and are cheap with good price momentum.) Canada’s largest software company and a leader in management software. A growth through acquisition story. Scores in the top 10% on price momentum. Had a big drop a couple of quarters ago when they warned on earnings, and then went ahead and beat on earnings. They do a very good job of managing growth and earnings expectations. 14% ROE and 20X PE. Dividend yield of 1.68%.


Price: $66.410
Subject: NORTH AMERICAN
Bias: CAUTIOUS
Owned: Yes
2016-02-12 COMMENT Pan American Silver
PAA-T
Don Vialoux

Silver stocks do very well, normally from around the middle of December right through until the end of February. As you get to the end of February, it’s going to be an opportunity to take some really good seasonal profits. 


Price: $12.270
Subject: TECHNICAL ANALYSIS & SEASONAL INVESTING
Bias: UNKNOWN
Owned: Unknown
2016-02-12 BUY Park Lawn Income Trust
PLC-X
Jason Mann

Cemeteries. Price momentum on this is decent. A little too small for him. Good balance sheet and pays a 4% dividend yield. ROE’s are decent at 14%, and it is a nice, stable stock. He would feel comfortable holding this.


Price: $11.500
Subject: NORTH AMERICAN
Bias: CAUTIOUS
Owned: No
2016-02-12 TOP PICK ETFS Physical Platinum Shares
PPLT-N
Don Vialoux

The platinum was a bit of a surprise this year. Seasonal strength is from the middle of December right through until around the end of April. This year we didn’t get the actual move until around the end of January. The reason for the strength is the way platinum is used. It is used in the auto industry for catalytic converters. More autos are being sold this year than last year. We are expecting to have a record crowd at the auto sales tradeshows this week. A very interesting trade technically, fundamentally and seasonally.


Price: $92.150
Subject: TECHNICAL ANALYSIS & SEASONAL INVESTING
Bias: UNKNOWN
Owned: No
2016-02-12 TOP PICK Parex Resources Inc.
PXT-T
Jason Mann

(Canada is cheap from a cyclical basis, so his 3 Top Picks are ones that fit that theme and are cheap with good price momentum.) An oil stock that you can hold and that will survive. Best in class in terms of adding resources. Growing their reserves even in this environment. Trading at 3.3X cash flow and 1.3X BV, and most importantly have no debt. Have cash on their balance sheet and a $200 million line of credit, so have room to grow if oil prices move higher. At around $40 Brent they can actually grow. Trade on a flowing barrel of around 37,000, versus its peers at around 60,000.


Price: $9.010
Subject: NORTH AMERICAN
Bias: CAUTIOUS
Owned: Yes
2016-02-12 PAST TOP PICK Ritchie Bros Auctioneers Inc.
RBA-T
Jason Mann

(A Top Pick Sept 8/15. Down 9.87%.) Hasn’t worked out as well, but is still one of his largest holdings in 2 of his funds. Ironically, as markets get harder, auctioneers’ volumes of resales actually pick up. Great balance sheet with no net debt. Score in the top 10% for him on valuation.


Price: $31.400
Subject: NORTH AMERICAN
Bias: CAUTIOUS
Owned: Yes
2016-02-12 BUY Transalta Renewables
RNW-T
Jason Mann

This has been a beneficiary of the parent Transalta (TA-T) pushing assets down, so they have a built-in growth model. TransAlta probably needs to push more assets into this. Valuation and price momentum are okay, kind of the middle of the pack, but you wouldn’t expect super cheap valuation for a utility. Quite stable and low volatility. Relatively safe and pays a good yield.


Price: $10.450
Subject: NORTH AMERICAN
Bias: CAUTIOUS
Owned: Unknown
2016-02-12 PAST TOP PICK Raging River Exploration
RRX-T
Jason Mann

(A Top Pick Sept 8/15. Up 9.72%.) Light oil. Pristine balance sheet. Also, has some of the best netbacks in the business. At $30-$35 oil, they can actually increase production. Still a buy. (See Top Picks.)


Price: $8.740
Subject: NORTH AMERICAN
Bias: CAUTIOUS
Owned: Yes
2016-02-12 HOLD Saputo Inc.
SAP-T
Don Vialoux

Because it tends to be a consumer staples stock it tends to do well in the summer. The stock is currently doing something that it normally does not do. It is actually very strong in the winter time, which is encouraging. Technically it is testing the high that it made in 2015. It is getting lined up for a possible move in the summer again.


Price: $36.990
Subject: TECHNICAL ANALYSIS & SEASONAL INVESTING
Bias: UNKNOWN
Owned: Unknown
2016-02-12 DON'T BUY SunEdison Inc
SUNE-N
Jason Mann

What he would call a battleground stock. A hedge fund hotel that has really hurt a lot of people. Purely speculative at this point. Has just about as bad a price momentum as you can get. Doesn’t cash flow at all and has a ton of debt. There is bankruptcy risk here.


Price: $1.410
Subject: NORTH AMERICAN
Bias: CAUTIOUS
Owned: No
2016-02-12 BUY Toronto Dominion
TD-T
Jason Mann

A good Buy at these levels. All the banks are discounting or have already discounted the oil price decline in Canada. There has been US Shorting on our bank names because of assumed real estate exposure. However, he thinks valuation is attractive on pretty much all of the banks.


Price: $50.810
Subject: NORTH AMERICAN
Bias: CAUTIOUS
Owned: Unknown
2016-02-12 COMMENT Tesla Motors Inc
TSLA-Q
Jason Mann

You need a high risk tolerance for this stock. Holding one like this for a long period of time is pretty risky, and the stock is extremely expensive. Price momentum has started to fall off and is down about 45% from its recent highs. There are no valuation metrics on this, because they have no cash flows. Purely speculative.


Price: $151.040
Subject: NORTH AMERICAN
Bias: CAUTIOUS
Owned: Unknown
2016-02-12 COMMENT Twitter, Inc
TWTR-N
Don Vialoux

There has been no establishment of a support level yet. Technically it is clearly in a downward trend and trading less then its 20 day moving average as well is underperforming the market. There is no indication that this has stopped going down. There are no signs of support.


Price: $15.880
Subject: TECHNICAL ANALYSIS & SEASONAL INVESTING
Bias: UNKNOWN
Owned: Unknown
2016-02-12 COMMENT Visa Inc.
V-N
Don Vialoux

Typical of most of the US financial service stocks, they tend to do very well from around February right through until May of each year. Technically the chart shows this is in a longer-term upward trend. If it breaks above the 2015 high, which was an all-time high, that would be very, very bullish. The scenario is positive for another good move to the upside.


Price: $70.420
Subject: TECHNICAL ANALYSIS & SEASONAL INVESTING
Bias: UNKNOWN
Owned: Unknown
2016-02-12 DON'T BUY Veresen Inc
VSN-T
Jason Mann

Was short this a couple of years ago based on its high valuation, but has recently covered it. This has poor price momentum. Price momentum matters because it can become a self-fulfilling prophecy. Valuation is still not supportive even at this low price. Trading at 10X cash flow and 46X EBITDA and 28X PE. Despite how much it’s dropped, it has too much debt, and he would question if the 14% yield is sustainable.


Price: $6.730
Subject: NORTH AMERICAN
Bias: CAUTIOUS
Owned: No
2016-02-12 COMMENT Western Forest Products Inc.
WEF-T
Don Vialoux

The forest products sector has very, very strong seasonality. The strength is from the middle of October through until the beginning of April. The longer-term trend is still on the upside. He is looking for it to continue to move higher. If you break the level from last fall, that is the key because you could have a spurt up to around $1.92.


Price: $1.920
Subject: TECHNICAL ANALYSIS & SEASONAL INVESTING
Bias: UNKNOWN
Owned: Unknown
2016-02-12 COMMENT Wells Fargo
WFC-N
Don Vialoux

Historically US banks bottom right around this time of year. What you want now are the technicals to support that. There are some early signs that this might want to be bottom at around current levels. Has been slightly outperforming the market, which has been going down. Probably slightly higher than its 20 day moving average, and momentum indicators are probably starting to show early signs of bottoming. Probably a good time to be considering this as an interesting seasonal play right through until approximately May.


Price: $47.310
Subject: TECHNICAL ANALYSIS & SEASONAL INVESTING
Bias: UNKNOWN
Owned: Unknown
2016-02-12 HOLD Sirius XM Canada Holdings Inc
XSR-T
Jason Mann

Have been approached on a preliminary basis about a transaction to take them private, but thinks the problem is that the price range is lower than what people were expecting. It scores well on valuations, so the buyer at this price is potentially getting a good deal. Trading around 7X Price to Free Cash Flow. There might not be a lot more upside from here.


Price: $4.260
Subject: NORTH AMERICAN
Bias: CAUTIOUS
Owned: Unknown
2016-02-12 WAIT BMO Equal Weight Bank ETF
ZEB-T
Don Vialoux

Bank stocks in Canada have very distinctive seasonality. They are different than seasonality for US banks. Seasonality runs from September through until the end of November when they report their 4th quarter results. Then they don’t do much until around the end of February, when they again go into a period of seasonal strength. That usually lasts until about May. Chart shows signs of bottoming, but we are not at the end of February yet. When you see them bottoming, that will be a sign to play the next seasonal trade.


Price: $19.930
Subject: TECHNICAL ANALYSIS & SEASONAL INVESTING
Bias: UNKNOWN
Owned: Unknown
2016-02-12 TOP PICK BMO S&P/TSX Base Metals ETF
ZMT-T
Don Vialoux

The period of seasonal strength on base metals is from the 3rd week of January right through until around the middle of April. On a technical basis, the sector has finally started showing signs of bottoming during the last 3 weeks. It recently broke above a short-term trading range, and is outperforming the market. Buy on weakness. He would put this trade on through to May.


Price: $4.810
Subject: TECHNICAL ANALYSIS & SEASONAL INVESTING
Bias: UNKNOWN
Owned: No
2016-02-11 N/A A Comment -- General Comments From an Expert
A Commentary
Kash Pashootan

Markets.  Gold.  It is not a great sign when you see people moving into a safe haven.  It is the first time we have seen it since 2008. Investors have exhausted all places to put money:  Bonds are volatile, equities are volatile and you don’t earn much in cash.  Be selective in oil.  He has been negative in oil for 4 years.  Even now, he sees we are close to the bottom in oil prices, but you don’t want to falsely translate oil price stability into share price stability in oil stocks.  He is not a buyer in the oil space.  2016 is another year of pain, with even more.  A hand full of oil companies have hedges coming off.  They have been burning cash hoping oil prices will come back. 


Price: $0.020
Subject: NORTH AMERICAN DIVIDEND & PORTFOLIO CONSTRUCTION
Bias: CAUTIOUS
Owned: _N/A
2016-02-11 N/A A Comment -- General Comments From an Expert
A Commentary
Kash Pashootan

Weighting – banks and financials.  If you assign a 10% weighting, then the subsectors should be included in that.  If you add to subsectors then you add to the space.  You might differ between Canadian and US, but otherwise both banks and insurance companies are financials.


Price: $0.020
Subject: NORTH AMERICAN DIVIDEND & PORTFOLIO CONSTRUCTION
Bias: CAUTIOUS
Owned: _N/A
2016-02-11 N/A A Comment -- General Comments From an Expert
A Commentary
Kash Pashootan

Negative interest rates in Canada.  We are quite a ways from banks charging to take your money.  Negative interest rates are more of a term.  He believes Canada is going into a recession.  He expects interest rates to go to zero.  You will not be earning a net positive rate after inflation.  This will continue as Canada’s economy struggles.


Price: $0.020
Subject: NORTH AMERICAN DIVIDEND & PORTFOLIO CONSTRUCTION
Bias: CAUTIOUS
Owned: _N/A
2016-02-11 BUY A Comment -- General Comments From an Expert
A Commentary
Kash Pashootan

Do I go back into the market from cash?  There is always a risk going to cash, but when you get it right it feels good.  Try to build a portfolio you can live with in tough times.  Remind yourself that going to cash is a strategy that is not sustainable according to history.  Buy now if you are all in cash. He is at 25% right now.  Make sure they are dividend paying names.   Don’t make any big bets on sectors or individual names.


Price: $0.020
Subject: NORTH AMERICAN DIVIDEND & PORTFOLIO CONSTRUCTION
Bias: CAUTIOUS
Owned: _N/A
2016-02-11 N/A A Comment -- General Comments From an Expert
A Commentary
Paul Harris, CFA

Markets. It is very difficult to figure out exactly when all this stuff stops. There are a lot of things happening that are driving the stock market including a disbelief that the US is probably going to put off rate increases for quite a while. China is slowing down with a lot of talk about further devaluation of their currency. Inflationary expectations have been going down in the last little while, not only in the US, but in Europe as well. There is a real worry in the world that monetary policy cannot do the things it was supposed to do. Thinks the argument is valid that monetary policy has to be mixed with fiscal policy. We are looking for this to be happening in Canada in the next little while, and we need to see it in other parts of the world as well, such as US, Europe, UK, etc.


Price: $0.020
Subject: NORTH AMERICAN/GLOBAL
Bias: UNKNOWN
Owned: _N/A
2016-02-11 WATCH Amazon.com
AMZN-Q
Paul Harris, CFA

You have to believe in the greater concept that Amazon is trying to achieve. They can make money if they want to, but is probably positioned not to give you a lot of earnings or dividends for a long time. A lot of the money goes back into developing and growing the business. The Cloud business is doing incredibly well and the retail business continues to grow taking market share away from the big box players. The company has changed the way people think about retail and will continue to do so. Expects they will continue to grab market share away from a lot of stores. When you see big Down moves in the stock, that is the time to try and buy it.


Price: $490.480
Subject: NORTH AMERICAN/GLOBAL
Bias: UNKNOWN
Owned: Unknown
2016-02-11 TOP PICK Bank of America
BAC-N
Paul Harris, CFA

(A Top Pick Jan 29/15. Down 26.79%.) A cheap stock, and they own 10% of the deposits in the US. Great retail franchise. In the top 3 globally in investment banking. Also, have a great credit card business and wealth management business. Trading below tangible BV. Dividend yield of 1.79%.


Price: $11.980
Subject: NORTH AMERICAN/GLOBAL
Bias: UNKNOWN
Owned: Yes
2016-02-11 COMMENT Brookfield Asset Management (A)
BAM.A-T
Paul Harris, CFA

Likes that the vast majority of management gets paid in shares. From an NAV point of view, he sees it as around $45, or even a little higher. Very good at buying assets at the right time and selling assets when they think they are mature.


Price: $38.720
Subject: NORTH AMERICAN/GLOBAL
Bias: UNKNOWN
Owned: Yes
2016-02-11 TOP PICK BCE Inc.
BCE-T
Kash Pashootan

You want names with a low beta, which is .4 in this case.  He likes the fiber expansion.  It will boost earnings.  He likes the HBO acquisition.  They will stream current seasons over mobile devices.


Price: $57.670
Subject: NORTH AMERICAN DIVIDEND & PORTFOLIO CONSTRUCTION
Bias: CAUTIOUS
Owned: Yes
2016-02-11 COMMENT Barclays Bank PLC
BCS-N
Paul Harris, CFA

Primarily a UK retail bank with credit card businesses and wealth management and a global investment bank. Feels the global investment bank, especially on the fixed income side, which was their primary business before they bought Lehman Brothers, is having a really difficult time and they’ve had to cut back on that. It has taken away from the earnings on the retail side. The bank is restructuring and he felt the banking industry was getting a little bit more difficult, so he sold his position. Trading well below BV.


Price: $9.200
Subject: NORTH AMERICAN/GLOBAL
Bias: UNKNOWN
Owned: No
2016-02-11 TOP PICK Bayerische Motoren Werke AG
BMW-GR
Paul Harris, CFA

Has a great franchise in China, but people feel China is slowing down, but even if they stabilize, they’ll do very well. European car sales have been much lower than in North America. Their peak was in 2007, and they haven’t reached that yet, where North American car sales have. There is pent-up demand for cars in Europe. Not an expensive stock. Trading at 7X earnings with a 4.3% dividend yield.


Price: $0.000
Subject: NORTH AMERICAN/GLOBAL
Bias: UNKNOWN
Owned: Yes
2016-02-11 BUY Bank of Nova Scotia
BNS-T
Kash Pashootan

TD-T vs. BNS-T.  They are different in terms of the business.  Both get half of their revenue from outside of Canada.  BNS-T has been beaten up more because the Latin American economy is less stable than the US.  It is a good entry point if you don’t have exposure to Canadian banks.  It will be a 9% return including dividend for 5 years amongst volatility.


Price: $52.660
Subject: NORTH AMERICAN DIVIDEND & PORTFOLIO CONSTRUCTION
Bias: CAUTIOUS
Owned: Unknown
2016-02-11 WATCH Bank of Nova Scotia
BNS-T
Paul Harris, CFA

One of the things you have to look for in Canadian banks are their earnings in their balance sheets, which are coming out in a couple of weeks, as it may give you an opportunity to buy them cheaper because of volatility. From a valuation perspective, they are all trading below 10X earnings, except for TD (TD-T). Dividend yield of 5.4%.


Price: $52.660
Subject: NORTH AMERICAN/GLOBAL
Bias: UNKNOWN
Owned: Unknown
2016-02-11 PAST TOP PICK CAE Inc
CAE-T
Kash Pashootan

(Top Pick Feb 27/15, Down 11.32%) He sold in the summer.  He is not overly bearish, but he found better places for his money.


Price: $13.600
Subject: NORTH AMERICAN DIVIDEND & PORTFOLIO CONSTRUCTION
Bias: CAUTIOUS
Owned: No
2016-02-11 SPECULATIVE BUY Corus Entertainment (B)
CJR.B-T
Kash Pashootan

It has been a tough place to be.  Pick and pay is going to come out and the market is trying to understand the implications.  They capture higher ad dollars because of the specialty channels.  Now they can see what the subscriber base is per channel vs. the package.  It has a potential of a meaningful upside, however.  12% dividend makes him concerned.  The cash flows look pretty good and have not changed since the share price was higher.


Price: $9.180
Subject: NORTH AMERICAN DIVIDEND & PORTFOLIO CONSTRUCTION
Bias: CAUTIOUS
Owned: Yes
2016-02-11 COMMENT Crescent Point Energy Corp
CPG-T
Paul Harris, CFA

Much more levered to oil prices than a lot of other companies, so if oil goes up you are going to get a bigger return. He would stick with companies that are more integrated like Suncor (SU-T) that has good balance sheet. Thinks oil will be touching the lower end of the range between $20 and $30 as opposed to going up.


Price: $13.660
Subject: NORTH AMERICAN/GLOBAL
Bias: UNKNOWN
Owned: No
2016-02-11 PAST TOP PICK Cisco
CSCO-Q
Kash Pashootan

(Top Pick Feb 27/15, Down 14.65%) You’ve seen a broad sell off in general in the tech sector.  It’s up 10% today after reporting earnings.  That is in line with why they bought it.  Mobile providers are in need of bandwidth.  Cyber security is where money is being spent and they have done key acquisitions there.  11 times earrings and they raised their dividend. 


Price: $22.510
Subject: NORTH AMERICAN DIVIDEND & PORTFOLIO CONSTRUCTION
Bias: CAUTIOUS
Owned: Yes
2016-02-11 SELL Encana Corp
ECA-T
Kash Pashootan

It is a tough place to make money and the landscape will not get better.  This name has been wiped off the map.  They made a huge bet on getting out of natural gas and into oil at the wrong time.  They are not doing a whole lot very well if you look at the dividend, the balance sheet and the market they are in.  8.1% yield.  That is good until it is not.


Price: $4.860
Subject: NORTH AMERICAN DIVIDEND & PORTFOLIO CONSTRUCTION
Bias: CAUTIOUS
Owned: Unknown
2016-02-11 BUY Estee Lauder
EL-N
Kash Pashootan

Skin care.  They are in the fragrance space through licensing, such as to Michael Kors.  They have had success in the Asian markets (over 20% of revenues).  He likes this name.  Only 8% of revenue is from E-commerce and it moved more toward this space.  Buy it in several buys over time.


Price: $88.470
Subject: NORTH AMERICAN DIVIDEND & PORTFOLIO CONSTRUCTION
Bias: CAUTIOUS
Owned: No
2016-02-11 TOP PICK Emera Inc
EMA-T
Kash Pashootan

He has owned it for a couple of years.  You get 4.25% dividend and modest share price appreciation.  Their recent acquisition has grown their footprint in the US significantly, where they can charge higher regulated fees.  6-8% total return and you can sleep at night.


Price: $45.270
Subject: NORTH AMERICAN DIVIDEND & PORTFOLIO CONSTRUCTION
Bias: CAUTIOUS
Owned: Yes
2016-02-11 TOP PICK Firstservice Corp
FSV-T
Paul Harris, CFA

A great little Canadian company with most of their business in the US. They look after gated communities. Not cheap, trading at about 23X earnings. Dividend yield of 1.23% which they plan on increasing. They have very strong market share. Their contracts are longer-term. They are doing small acquisitions all the time in different areas of the US. Good organic and acquisition growth.


Price: $46.970
Subject: NORTH AMERICAN/GLOBAL
Bias: UNKNOWN
Owned: Yes
2016-02-11 BUY Lloyds TSB Group PLC
LYG-N
Paul Harris, CFA

From a banking perspective, this is really leveraged to a lot of what is going on in the UK. UK economy is doing very well. This bank does not have a lot of investment banking. Have done a very good job of getting rid of assets they had in Spain and other parts of Europe. Primarily a domestic retail/commercial bank, and in this environment this is probably not a bad story. They trade at a premium to their BV, unlike a lot of other banks.


Price: $3.410
Subject: NORTH AMERICAN/GLOBAL
Bias: UNKNOWN
Owned: Unknown
2016-02-11 COMMENT Manulife Financial
MFC-T
Kash Pashootan

He has constantly wrestled with it.  He has looked at it a half a dozen times.  Over the last two years it has done nothing.  This is an entry point because we have had false starts.  He would aim toward Canadian banks.  He prefers SLF-T.  The presence of MFC-T in Asia has not monetized itself. 


Price: $17.310
Subject: NORTH AMERICAN DIVIDEND & PORTFOLIO CONSTRUCTION
Bias: CAUTIOUS
Owned: No
2016-02-11 DON'T BUY Magna Int'l. (A)
MG-T
Kash Pashootan

Autos are so cyclical.  It can change from a boom year to a bust year so quickly.  F-N is 6-7 times earnings.  This is a theme that works right across the board.  Auto parts is a more defensive area than the automakers.  His opinion on the auto sector is somewhat muted.  The low PE is because the sector is so cyclical.  Don’t be fooled by it.


Price: $44.110
Subject: NORTH AMERICAN DIVIDEND & PORTFOLIO CONSTRUCTION
Bias: CAUTIOUS
Owned: Yes
2016-02-11 BUY on WEAKNESS Magna Int'l. (A)
MG-T
Paul Harris, CFA

An interesting story. Not expensive, at 7X earnings. Good dividend yield of 2.4%. Car sales in North America last year hit a real peak, and people are feeling that is going to come off, which is probably the case. However, this is a much more global company and more diversified. Global growth in the car industry is probably going to be about 3.3% next year, so this company can participate in that. Have good leverage to the European car industry and also to the emerging-market side. Great balance sheet, so they can take on some leverage and increase ROE that way, buy back shares and increase dividends.


Price: $44.110
Subject: NORTH AMERICAN/GLOBAL
Bias: UNKNOWN
Owned: Unknown
2016-02-11 PAST TOP PICK Microsoft
MSFT-Q
Paul Harris, CFA

(A Top Pick Jan 29/15. Up 21.51%.) He is continuing to buy this. They are executing very well and have some great products. The Surface was outselling iPad over the holidays. Their Cloud business is doing well. Thinks there is potential for them to do very, very well. Probably worth in the $60 range.


Price: $49.710
Subject: NORTH AMERICAN/GLOBAL
Bias: UNKNOWN
Owned: Yes
2016-02-11 COMMENT National Bank of Canada
NA-T
Paul Harris, CFA

Had some difficulty in the last little while. Their Maple division was closed down by the German government. Also, had to do a big share issue. Has become very good at becoming much more of a Canadian bank, rather than just a Québec bank. Trades at about 7X earnings and 1.27X Book. Very good dividend yield. Management has been very clear on their issues. In the Canadian banks, you have to look at what loan losses are going to look like and any exposure to Calgary. However, buying banks at these levels makes a lot of sense.


Price: $36.940
Subject: NORTH AMERICAN/GLOBAL
Bias: UNKNOWN
Owned: Unknown
2016-02-11 BUY on WEAKNESS Potash Corp of Saskatchewan
POT-T
Paul Harris, CFA

Has gone through some turmoil of late and cut their dividend. Closed down some operations in Nova Scotia. Potash is an oligopoly and thinks some of the people in the oligopoly are just going to continue to produce a lot and get out of the oligopoly and push down prices. The risk here is if the price of potash goes down. If you are going to buy it, look for a price of $15-$18. Fundamentals for that industry is pretty good.


Price: $21.290
Subject: NORTH AMERICAN/GLOBAL
Bias: UNKNOWN
Owned: Unknown
2016-02-11 PAST TOP PICK ProAssurance Corp
PRA-N
Kash Pashootan

(Top Pick Feb 27/15, Up 10.68%) They have been busy doing acquisitions over the last few years.  They are now done in their spending phase and now those are giving them new clients to cross sell products to.  2.6% dividend.


Price: $48.520
Subject: NORTH AMERICAN DIVIDEND & PORTFOLIO CONSTRUCTION
Bias: CAUTIOUS
Owned: Yes
2016-02-11 WEAK BUY Power Financial Corp
PWF-T
Kash Pashootan

You can buy it and put it away and not worry about it, but with the pullback in the market there are places he would prefer to put capital.  It is financial focused.  He would break up the capital you want to allocate to financials if you want to buy this.  He does not see major earnings growth, but you could argue that the share price is going to go back up again.  It is a matter of time before cash comes back into this space.


Price: $29.830
Subject: NORTH AMERICAN DIVIDEND & PORTFOLIO CONSTRUCTION
Bias: CAUTIOUS
Owned: Unknown
2016-02-11 PAST TOP PICK Qualcomm
QCOM-Q
Paul Harris, CFA

(A Top Pick Jan 29/15. Down 30.36%.) Fundamentally, this is a very cheap stock. Great balance sheet with cash on it. Trading at a very low multiple. Sold his holdings because of how they handled the China issue. They kept having little hiccups all the time.


Price: $42.960
Subject: NORTH AMERICAN/GLOBAL
Bias: UNKNOWN
Owned: No
2016-02-11 COMMENT Restaurent Brands International
QSR-T
Paul Harris, CFA

This was a merger through the purchase of Tim Hortons by Burger King. An interesting story, has looked at it over the last little while. Management is very smart and have the ability to grow the Burger King franchise globally. Thinks there is good upside. Have cut costs a lot. Not cheap at about 28X forward earnings, but you have to believe that they are going to be able to execute very well, as they have done in the past.


Price: $42.560
Subject: NORTH AMERICAN/GLOBAL
Bias: UNKNOWN
Owned: Unknown
2016-02-11 TOP PICK ResMed Inc.
RMD-N
Kash Pashootan

Sleep Apnea.  It is quite prevalent – 25% of the population have it.  2.12% dividend.  It is the leader to provide the devices. 


Price: $57.740
Subject: NORTH AMERICAN DIVIDEND & PORTFOLIO CONSTRUCTION
Bias: CAUTIOUS
Owned: Yes
2016-02-11 COMMENT Sun Life Financial Inc
SLF-T
Paul Harris, CFA

Has stayed away from a lot of the insurance companies as he thinks dividend yields are going to remain relatively low, and they don’t make as much money. Not expensive and pays a very good dividend at about 4.2%. Trading a little bit above BV and not at a high PE multiple either. Great company, but feels you could put your money in other places.


Price: $37.930
Subject: NORTH AMERICAN/GLOBAL
Bias: UNKNOWN
Owned: No
2016-02-11 BUY Telus Corp
T-T
Kash Pashootan

He likes the name.  All the Telcos in Canada are a buy.  Foreigners are not going to come into the space.  It sold off because of what happened in Alberta.  Smart phone adoption in Canada is a lot less than in the US.  Great dividend.


Price: $39.840
Subject: NORTH AMERICAN DIVIDEND & PORTFOLIO CONSTRUCTION
Bias: CAUTIOUS
Owned: Yes
2016-02-11 BUY Toronto Dominion
TD-T
Kash Pashootan

TD-T vs. BNS-T.  They are different in terms of the business.  Both get half of their revenue from outside of Canada.  BNS-T has been beaten up more because the Latin American economy is less stable than the US.  It is a good entry point if you don’t have exposure to Canadian banks.  It will be a 9% return including dividend for 5 years amongst volatility.


Price: $49.700
Subject: NORTH AMERICAN DIVIDEND & PORTFOLIO CONSTRUCTION
Bias: CAUTIOUS
Owned: Unknown
2016-02-11 COMMENT Toronto Dominion
TD-T
Paul Harris, CFA

An issue he has with Canadian banks is that bad debt on commercial loans has been very, very low, so you could see an uptick in that sort of thing. Has reduced his position in this bank.


Price: $49.700
Subject: NORTH AMERICAN/GLOBAL
Bias: UNKNOWN
Owned: Yes
2016-02-11 BUY on WEAKNESS Visa Inc.
V-N
Kash Pashootan

It is like buying real estate in the most expensive neighbourhood.  V-N has always been in that high multiple. You have to be willing to buy at high valuation.  They are paying you a slim dividend.  (0.8%).  But he sees this as a growth name.  The opportunity is the growth globally if you look at emerging markets.  He would buy in thirds over time.


Price: $70.150
Subject: NORTH AMERICAN DIVIDEND & PORTFOLIO CONSTRUCTION
Bias: CAUTIOUS
Owned: Unknown
2016-02-11 HOLD Wells Fargo
WFC-N
Kash Pashootan

More focused on meat and potatoes banking.  Confidence is shaky, but the ability for the US consumer to spend is significant.  Household debt is about 110% of income vs. Canada at 165%.  It is not a buy, but a hold.  He prefers regionals such as COLB-N, who are better at cross selling banking products.


Price: $46.170
Subject: NORTH AMERICAN DIVIDEND & PORTFOLIO CONSTRUCTION
Bias: CAUTIOUS
Owned: No
2016-02-11 BUY Wells Fargo
WFC-N
Paul Harris, CFA

An incredible company. Trades at a premium to all the rest of the US banks, but you are paying for a great company. Good dividend yield of 3%. Trading at 1.4X Book and 11X earnings. Have done a very good job of growing their product line.


Price: $46.170
Subject: NORTH AMERICAN/GLOBAL
Bias: UNKNOWN
Owned: Unknown
2016-02-11 BUY Exxon Mobil
XOM-N
Kash Pashootan

The smaller players can’t survive.  They can acquire assets at cheap prices.  They are one of the highest quality names in the space.  This is one of the more conservative ways to buy the space.


Price: $79.350
Subject: NORTH AMERICAN DIVIDEND & PORTFOLIO CONSTRUCTION
Bias: CAUTIOUS
Owned: Unknown
2016-02-10 N/A A Comment -- General Comments From an Expert
A Commentary
Swanzy Quarshie

Energy. We have seen hundreds of billions of dollars in cuts in CapX spending in the industry. Feels the time for buying energy is probably coming quite soon. It is time for people to get interested in energy, because all the CapX cuts are going to impact production growth in the future, which is where the real opportunity lies. OPEC produces 2 million a day more than they were when all this started. Part of the problem has been OPEC itself, but also we have not had the kind of production we expected from the US, but that is coming. It has a lag time. When we saw the production cap happening in the US, a lot of it came with efficiency gains because of production cuts, and she doesn’t see that for this year, and this year the cuts are really going to impact. There could be a surprise to the upside because of how crude trades on this kind of behaviour. One caveat is that demand is going to be pretty decent this year, but there have been reports out that demand might slow down growth. However, thinks the oil sands is going to be challenged.


Price: $0.020
Subject: OIL & GAS
Bias: OPTIMISTIC on OIL
Owned: _N/A
2016-02-10 N/A A Comment -- General Comments From an Expert
A Commentary
John O'Connell, CFA

Markets. Things people are worrying about are not new problems for the most part. Markets for the last 5-6 years are advancing in spite of major issues percolating underneath the surface. The problems really never went away and as valuations continue to appreciate, and as some of the problems became more acute, it has given people pause to think about their positions. A common lore is that demand for oil is falling, and falling oil prices have been a symptom of weak global demand. However, demand for oil last year was the strongest it has been in 5 years. The problem is we have too much oil. This is an example of people focusing on what is an easy answer. Another one is the focus on China. China is decelerating its economic activity and is going through a transition, and people are worried about the devaluation of the Renminbi and what it is going to do to global markets and that we are going to have a currency war. We are already having a currency war and we are all pushing China to make their economy more open. The Chinese currency has appreciated, as has the US currency, for many, many years now. Now the currency is going down a little and people are criticizing them. Nobody pays attention to the fact that every country is in a competitive devaluation situation, which is very deflationary and is causing major problems to the US economy. Investors are only now starting to pay attention that the strong US$ has become a major headwind to US multinational corporate profits. He carries a very heavy cash position, just under 30%. The big new problem: are European banks spiraling out of control? He has been watching credit spreads widening globally for quite some time. Partially that is a function of the structure of the credit markets where a lot of high-yield bonds are held in ETF’s. The illusion exists that you can get instant liquidity. But the ETF has to sell the underlying security. With the new regulatory environment in the States and Europe, banks are less inclined to become liquidity providers in bond markets, so they have to find fewer and fewer buyers, and the major buyers of ETF’s are now in liquidation mode taking things down to valuations that compel people to purchase them. He is finally starting to see pretty good value in securities, particularly in the US. With credit spreads widening in Europe, etc., that stuff starts to begin morphing and becomes problematic.


Price: $0.020
Subject: NORTH AMERICAN - LARGE
Bias: UNKNOWN
Owned: _N/A
2016-02-10 N/A A Comment -- General Comments From an Expert
A Commentary
John O'Connell, CFA

Canadian negative interest rate environment? Canada could certainly go into a negative interest rate environment. Last year there were a lot of analysts that were suggesting banks should be bought because the yield curve was going to steepen as the Fed raised interest rates. It has done exactly the opposite. Negative interest rates are a tax on banks at a time when banks are already struggling with other kinds of problems. He doesn’t think negative interest rates will cause banks to cut their rates. They are well capitalized, strong and quite capable of dealing with an increase in nonperforming loans. However, he does think Canadian banks have been feasting on selling Canadian investors a debt for a good long time.


Price: $0.020
Subject: NORTH AMERICAN - LARGE
Bias: UNKNOWN
Owned: _N/A
2016-02-10 TOP PICK Apple
AAPL-Q
John O'Connell, CFA

A great company and the largest company in the world. People are questioning how they can possibly do any better than they have. There are probably around 600 million iPhones out there, about 2 million 6’s, which means there is about 4 million odd 3’s, 4’s and 5’s. If you upgrade 50% of those every 2-2.5 years, that is 100 million of demand from just upgrades, taking out growth in the marketplace and China, which is growing by leaps and bounds. They are just getting involved in India. Trading at 10X earnings.


Price: $94.270
Subject: NORTH AMERICAN - LARGE
Bias: UNKNOWN
Owned: Yes
2016-02-10 COMMENT Advantage Oil & Gas Ltd
AAV-T
Swanzy Quarshie

Have done an excellent job ratcheting down costs. They struggled a little when they were a trust, but then spun out their oil production into Longview. This has put them into the category of a lower cost producer on the gas side. They actually make money when everybody else is not. Have hedged very well and have a huge cash flow growth profile.


Price: $7.490
Subject: OIL & GAS
Bias: OPTIMISTIC on OIL
Owned: No
2016-02-10 COMMENT Altagas Ltd
ALA-T
Swanzy Quarshie

This is doing quite well in this environment. Has been able to grow its EBITDA this year. One of the lowest payout ratio companies in its universe. This presents an opportunity for people that are looking for a safe yield. The 6.5% dividend is absolutely safe.


Price: $30.170
Subject: OIL & GAS
Bias: OPTIMISTIC on OIL
Owned: Unknown
2016-02-10 COMMENT Arc Resources Ltd
ARX-T
Swanzy Quarshie

A natural gas specialist. This is a “Best in class” company in the oil/gas space. Has been able to maintain some growth in this environment as well as maintaining its balance sheet. They are really good at hedging. Have enormous torque to the Montney gas play, and there is a lot of upside to the story on this.


Price: $16.600
Subject: OIL & GAS
Bias: OPTIMISTIC on OIL
Owned: Unknown
2016-02-10 SELL Bank of America
BAC-N
John O'Connell, CFA

The banking sector is struggling with credit concerns that are emanating partially out of Europe, and that problem is not going away in the short term. Secondly, the US banks along with Canadian banks, are struggling with their exposure to energy loans.


Price: $11.980
Subject: NORTH AMERICAN - LARGE
Bias: UNKNOWN
Owned: No
2016-02-10 PAST TOP PICK Bankers Petroleum
BNK-T
Swanzy Quarshie

(A Top Pick Feb 12/15. Down 77.71%.) This has been a disappointment. Had problems with the Albanian government, but the tax issue should get sorted out sometime this quarter. Great quality company, and its assets are phenomenal. In a rising oil price environment, this is a great place to be.


Price: $0.750
Subject: OIL & GAS
Bias: OPTIMISTIC on OIL
Owned: Yes
2016-02-10 COMMENT Bank of Nova Scotia
BNS-T
John O'Connell, CFA

A well-run bank and he likes what the new CEO is doing. He is being tough on the organization to make sure it is being run on a cost competitive basis, but he is operating in very difficult environments and they are going to stay difficult for the foreseeable future. Thinks the banks are good value, but could become even better value. They’re all trading at around 10%. This is yielding about 5.3% and he could see it yielding 6%.


Price: $52.660
Subject: NORTH AMERICAN - LARGE
Bias: UNKNOWN
Owned: No
2016-02-10 COMMENT Baytex Energy Corp
BTE-T
Swanzy Quarshie

No money is being made on heavy oil. All the money is being made in the light oil Eagleford play, where they have partnered with Marathon in Texas. An excellent way to play a recovery if you believe in a recovery in oil prices. They have problems on the debt side. At risk of reaching covenants yet again, but thinks they have offense (?), so there is upside for equity holders. Without higher oil prices, this story is quite impaired. If looking for an opportunity on an upside in oil, a small position could be okay.


Price: $2.360
Subject: OIL & GAS
Bias: OPTIMISTIC on OIL
Owned: Unknown
2016-02-10 SELL Bellatrix Exploration Ltd.
BXE-T
Swanzy Quarshie

(Market Call Minute.) They are ramping up debt with the decline in their production profile. Not a good combination.


Price: $1.370
Subject: OIL & GAS
Bias: OPTIMISTIC on OIL
Owned: No
2016-02-10 PAST TOP PICK CASH
CASH
John O'Connell, CFA

(A Top Pick March 10/15.) He always carries above average positions in cash. It gives opportunities. To deploy this, it would have to be some really good health care, technology, maybe some industrial stocks, and would have to be blood in the streets.


Price: $0.010
Subject: NORTH AMERICAN - LARGE
Bias: UNKNOWN
Owned: Yes
2016-02-10 COMMENT Celgene Corp
CELG-Q
John O'Connell, CFA

The general market perception is weighing on companies like this. Then there is the political garbage that is weighing on them, and that is going to keep the stock under lid for a little bit, but it has a great growth story. Trading at a very, very reasonable valuation. Strong balance sheet. Of all the biotech stocks you would want to own, this is the one. Would love to see it get beaten up a little further, so he could add more.


Price: $103.160
Subject: NORTH AMERICAN - LARGE
Bias: UNKNOWN
Owned: Yes
2016-02-10 TOP PICK Crescent Point Energy Corp
CPG-T
Swanzy Quarshie

She picked this, not only because she thinks oil prices are going to go up, but the business has not been impaired like others in this environment. You want to be exposed to a company that is not going to fall apart, but also has an upside opportunity. Operationally things are going great for them. Decline rates in production are slowly coming down, which means they have to spend less capital. Dividend yield of 8.66%, but wouldn’t be surprised if they cut this again.


Price: $13.660
Subject: OIL & GAS
Bias: OPTIMISTIC on OIL
Owned: Yes
2016-02-10 COMMENT Cisco
CSCO-Q
John O'Connell, CFA

Sold his position last year at around $26. Likes the company very much and is a big believer in the evolution and growth in the Internet of things. This company is a central component of that hub. They are dealing with competitive pressures out of China, and a lot of their major customers are building a lot of their own products internally. It was major currency headwinds that caused him to pull Sell. Good strong balance sheet and a good dividend yield. He expects he will own this again in the future, but doesn’t think the stock is going anywhere soon. We are still early in this correction.


Price: $22.510
Subject: NORTH AMERICAN - LARGE
Bias: UNKNOWN
Owned: No
2016-02-10 DON'T BUY Cenovus Energy
CVE-T
Swanzy Quarshie

This is quite challenged at this time. Have raised some capital, cut the dividend and sold their royalty package. Essentially with commodity prices where they are, the debt has ramped right back up again.


Price: $13.520
Subject: OIL & GAS
Bias: OPTIMISTIC on OIL
Owned: No
2016-02-10 TOP PICK Walt Disney
DIS-N
John O'Connell, CFA

(A Top Pick March 10/15. Down 12.76%.) Just bought more today. A wonderful company. It has Star Wars and there are going to be more Star Wars. Being criticized by analysts who have never run a company themselves.  Bob Iger bought the Lucas Film franchise for $4 billion, and the 1st movie he put out generated $1.5 billion in profit.  This is the most sophisticated company in the media business in the world. It is not just about ESPN or Star Wars. Theme park business revenues were up 15% this last quarter. Their theme parks in China are opening up. Their movie business is hugely profitable.


Price: $88.850
Subject: NORTH AMERICAN - LARGE
Bias: UNKNOWN
Owned: Yes
2016-02-10 SELL Encana Corp
ECA-T
Swanzy Quarshie

Sometimes companies are forced to sell midstream assets to raise capital, but unfortunately the company that owns the midstream charges for that. Encana is having some issues in that they are having some really high costs on the transportation side, as well as having high operating costs. In this environment, you want the low cost operator, and this is not it.


Price: $4.860
Subject: OIL & GAS
Bias: OPTIMISTIC on OIL
Owned: Unknown
2016-02-10 HOLD Element Financial
EFN-T
John O'Connell, CFA

He is a long-term investor. Likes the company. This has been hit for multiple reasons. The former CEO is quite flamboyant. Did an excellent job, but some investors always have the thought that he is going to get himself into the same problems that he was into before. There is a lot of hot money in the stock. There are a couple of comparables in the US that have run into problems. Doesn’t think the comparisons are strong or valid. Trading at about 7X its earnings. It is going to survive.


Price: $12.770
Subject: NORTH AMERICAN - LARGE
Bias: UNKNOWN
Owned: Yes
2016-02-10 COMMENT Enbridge
ENB-T
John O'Connell, CFA

This deserves an award for talking about a great story and getting the investment community on board. Of course the street is going to love this company because it is the biggest pair of commissions and underwriting fees out there. It is a huge labyrinth of special-purpose entities, spinoffs, new opportunities to raise money. It is just Financial Engineering 101.


Price: $44.000
Subject: NORTH AMERICAN - LARGE
Bias: UNKNOWN
Owned: No
2016-02-10 TOP PICK Facebook
FB-Q
John O'Connell, CFA

In many respects they have a better mouse trap from an advertising perspective than what Google does. Management is fearless and clearly a visionary. Strong balance sheet and rapid, rapid growth. Trading at 30X earnings, so it is a little bit rich, but they are knocking the ball out of the park. Thinks it could be the largest company in the world in a couple of years.


Price: $101.000
Subject: NORTH AMERICAN - LARGE
Bias: UNKNOWN
Owned: Yes
2016-02-10 COMMENT Fortis Inc.
FTS-T
John O'Connell, CFA

The recent deal was viewed very negatively by the street. It is a huge investment on this company’s part compared to its market cap. A lot of Americans are going to be getting shares in the company, and are not very happy about it. About 50% of those shares are going to be recycled. The company is being viewed increasingly as empire builders.


Price: $37.470
Subject: NORTH AMERICAN - LARGE
Bias: UNKNOWN
Owned: Unknown
2016-02-10 COMMENT General Electric
GE-N
John O'Connell, CFA

Trading at 19X forward earnings, which is a little rich for him. Likes that they are getting out of the financial services business and are buying back stock. He likes industrial areas which are struggling because of the energy space. Likes the healthcare space that they are in. Would be very happy owning this because it is a well-run company that has gone nowhere for a long, long time. Thinks the dividend is safe.


Price: $28.300
Subject: NORTH AMERICAN - LARGE
Bias: UNKNOWN
Owned: No
2016-02-10 TOP PICK Gibson Energy
GEI-T
Swanzy Quarshie

Big transporter and storer of oil. Has traded a lot with commodity prices, which is a little unjustified. Valuation wise it looks really compelling versus its peers. Have spent a lot of money on terminals and pipelines to gather oil in the heart of Edmonton for shipment. This should improve their cash flow profile. Has a lot of “take or pay” contracts which provides a lot of help. Dividend yield of 8.55%.


Price: $14.910
Subject: OIL & GAS
Bias: OPTIMISTIC on OIL
Owned: Yes
2016-02-10 PAST TOP PICK Alphabet Inc. (A)
GOOGL-Q
John O'Connell, CFA

(A Top Pick March 10/15. Up 26.26%.) Loves the company. Reported excellent earnings. This is one of the juggernauts that you just have to continue to own.


Price: $706.850
Subject: NORTH AMERICAN - LARGE
Bias: UNKNOWN
Owned: Yes
2016-02-10 SELL Husky Energy
HSE-T
Swanzy Quarshie

A challenged company. Has one of the cleaner balance sheets, however management misstepped when they decided they were going to pay the dividend with all shares, and then decided to remove the dividend altogether. This is the trouble when you have one primary shareholder, as they essentially dictate what happens to the company. Doesn’t feel the upside is as great as with other companies. If you own, consider switching.


Price: $12.250
Subject: OIL & GAS
Bias: OPTIMISTIC on OIL
Owned: No
2016-02-10 COMMENT Imperial Oil
IMO-T
Swanzy Quarshie

A great, solid, well-run company, and you can tell that by the way it trades. Free cash flow profile looks healthy, which is good for the investor. Because it is such a good quality company with less beta than the rest of the group, in a rising price environment you are not going to get as much appreciation as you would in some others. This is a company you don’t want to own coming out of a recovery. Also. refining margins are coming down. Feels some of the best upside is going to be in the pure play rather than in an integrated story.


Price: $41.380
Subject: OIL & GAS
Bias: OPTIMISTIC on OIL
Owned: Unknown
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