Stockchase Daily News RSS The Days Comments by Experts http://www.stockchase.com/ en A Comment -- General Comments From an Expert <p><span style="color: #ff0000;"><strong>Markets.&nbsp; Gold.&nbsp;</strong> </span>It is not a great sign when you see people moving into a safe haven.&nbsp; It is the first time we have seen it since 2008. Investors have exhausted all places to put money:&nbsp; Bonds are volatile, equities are volatile and you don&rsquo;t earn much in cash.&nbsp; Be selective in oil.&nbsp; He has been negative in oil for 4 years.&nbsp; Even now, he sees we are close to the bottom in oil prices, but you don&rsquo;t want to falsely translate oil price stability into share price stability in oil stocks.&nbsp; He is not a buyer in the oil space.&nbsp; 2016 is another year of pain, with even more.&nbsp; A hand full of oil companies have hedges coming off.&nbsp; They have been burning cash hoping oil prices will come back.&nbsp;</p> http://www.stockchase.com/opinions/view/155854 Thu, 11 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155854 A Comment -- General Comments From an Expert <p><span style="color: #ff0000;"><strong>Weighting &ndash; banks and financials.&nbsp;</strong></span> If you assign a 10% weighting, then the subsectors should be included in that.&nbsp; If you add to subsectors then you add to the space.&nbsp; You might differ between Canadian and US, but otherwise both banks and insurance companies are financials.</p> http://www.stockchase.com/opinions/view/155855 Thu, 11 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155855 Estee Lauder <p>Skin care.&nbsp; They are in the fragrance space through licensing, such as to Michael Kors.&nbsp; They have had success in the Asian markets (over 20% of revenues).&nbsp; He likes this name.&nbsp; Only 8% of revenue is from E-commerce and it moved more toward this space.&nbsp; Buy it in several buys over time.</p> http://www.stockchase.com/opinions/view/155856 Thu, 11 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155856 Exxon Mobil <p>The smaller players can&rsquo;t survive.&nbsp; They can acquire assets at cheap prices.&nbsp; They are one of the highest quality names in the space.&nbsp; This is one of the more conservative ways to buy the space.</p> http://www.stockchase.com/opinions/view/155857 Thu, 11 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155857 Cisco <p><span style="color: #ff0000;"><strong>(Top Pick Feb 27/15, Down 14.65%)</strong> </span>You&rsquo;ve seen a broad sell off in general in the tech sector.&nbsp; It&rsquo;s up 10% today after reporting earnings.&nbsp; That is in line with why they bought it.&nbsp; Mobile providers are in need of bandwidth.&nbsp; Cyber security is where money is being spent and they have done key acquisitions there.&nbsp; 11 times earrings and they raised their dividend.&nbsp;</p> http://www.stockchase.com/opinions/view/155858 Thu, 11 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155858 CAE Inc <p><span style="color: #ff0000;"><strong>(Top Pick Feb 27/15, Down 11.32%)</strong> </span>He sold in the summer.&nbsp; He is not overly bearish, but he found better places for his money.</p> http://www.stockchase.com/opinions/view/155859 Thu, 11 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155859 ProAssurance Corp <p><span style="color: #ff0000;"><strong>(Top Pick Feb 27/15, Up 10.68%)</strong> </span>They have been busy doing acquisitions over the last few years.&nbsp; They are now done in their spending phase and now those are giving them new clients to cross sell products to.&nbsp; 2.6% dividend.</p> http://www.stockchase.com/opinions/view/155860 Thu, 11 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155860 Manulife Financial <p>He has constantly wrestled with it.&nbsp; He has looked at it a half a dozen times.&nbsp; Over the last two years it has done nothing.&nbsp; This is an entry point because we have had false starts.&nbsp; He would aim toward Canadian banks.&nbsp; He prefers SLF-T.&nbsp; The presence of MFC-T in Asia has not monetized itself.&nbsp;</p> http://www.stockchase.com/opinions/view/155861 Thu, 11 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155861 Telus Corp <p>He likes the name.&nbsp; All the Telcos in Canada are a buy.&nbsp; Foreigners are not going to come into the space.&nbsp; It sold off because of what happened in Alberta.&nbsp; Smart phone adoption in Canada is a lot less than in the US.&nbsp; Great dividend.</p> http://www.stockchase.com/opinions/view/155862 Thu, 11 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155862 Visa Inc. <p>It is like buying real estate in the most expensive neighbourhood.&nbsp; V-N has always been in that high multiple. You have to be willing to buy at high valuation.&nbsp; They are paying you a slim dividend.&nbsp; (0.8%).&nbsp; But he sees this as a growth name.&nbsp; The opportunity is the growth globally if you look at emerging markets.&nbsp; He would buy in thirds over time.</p> http://www.stockchase.com/opinions/view/155863 Thu, 11 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155863 Magna Int'l. (A) <p>Autos are so cyclical.&nbsp; It can change from a boom year to a bust year so quickly.&nbsp; F-N is 6-7 times earnings.&nbsp; This is a theme that works right across the board.&nbsp; Auto parts is a more defensive area than the automakers.&nbsp; His opinion on the auto sector is somewhat muted.&nbsp; The low PE is because the sector is so cyclical.&nbsp; Don&rsquo;t be fooled by it.</p> http://www.stockchase.com/opinions/view/155864 Thu, 11 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155864 A Comment -- General Comments From an Expert <p><span style="color: #ff0000;"><strong>Negative interest rates in Canada.&nbsp;</strong></span> We are quite a ways from banks charging to take your money.&nbsp; Negative interest rates are more of a term.&nbsp; He believes Canada is going into a recession.&nbsp; He expects interest rates to go to zero.&nbsp; You will not be earning a net positive rate after inflation.&nbsp; This will continue as Canada&rsquo;s economy struggles.</p> http://www.stockchase.com/opinions/view/155865 Thu, 11 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155865 Toronto Dominion <p><span style="color: #ff0000;"><strong>TD-T vs. BNS-T.&nbsp;</strong> </span>They are different in terms of the business.&nbsp; Both get half of their revenue from outside of Canada.&nbsp; BNS-T has been beaten up more because the Latin American economy is less stable than the US.&nbsp; It is a good entry point if you don&rsquo;t have exposure to Canadian banks.&nbsp; It will be a 9% return including dividend for 5 years amongst volatility.</p> http://www.stockchase.com/opinions/view/155866 Thu, 11 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155866 Bank of Nova Scotia <p><span style="color: #ff0000;"><strong>TD-T vs. BNS-T.&nbsp;</strong> </span>They are different in terms of the business.&nbsp; Both get half of their revenue from outside of Canada.&nbsp; BNS-T has been beaten up more because the Latin American economy is less stable than the US.&nbsp; It is a good entry point if you don&rsquo;t have exposure to Canadian banks.&nbsp; It will be a 9% return including dividend for 5 years amongst volatility.</p> http://www.stockchase.com/opinions/view/155867 Thu, 11 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155867 ResMed Inc. <p>Sleep Apnea.&nbsp; It is quite prevalent &ndash; 25% of the population have it.&nbsp; 2.12% dividend.&nbsp; It is the leader to provide the devices.&nbsp;</p> http://www.stockchase.com/opinions/view/155868 Thu, 11 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155868 BCE Inc. <p>You want names with a low beta, which is .4 in this case.&nbsp; He likes the fiber expansion.&nbsp; It will boost earnings.&nbsp; He likes the HBO acquisition.&nbsp; They will stream current seasons over mobile devices.</p> http://www.stockchase.com/opinions/view/155869 Thu, 11 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155869 Emera Inc <p>He has owned it for a couple of years.&nbsp; You get 4.25% dividend and modest share price appreciation.&nbsp; Their recent acquisition has grown their footprint in the US significantly, where they can charge higher regulated fees.&nbsp; 6-8% total return and you can sleep at night.</p> http://www.stockchase.com/opinions/view/155870 Thu, 11 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155870 Wells Fargo <p>More focused on meat and potatoes banking.&nbsp; Confidence is shaky, but the ability for the US consumer to spend is significant.&nbsp; Household debt is about 110% of income vs. Canada at 165%.&nbsp; It is not a buy, but a hold.&nbsp; He prefers regionals such as COLB-N, who are better at cross selling banking products.</p> http://www.stockchase.com/opinions/view/155871 Thu, 11 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155871 Encana Corp <p>It is a tough place to make money and the landscape will not get better.&nbsp; This name has been wiped off the map.&nbsp; They made a huge bet on getting out of natural gas and into oil at the wrong time.&nbsp; They are not doing a whole lot very well if you look at the dividend, the balance sheet and the market they are in.&nbsp; 8.1% yield.&nbsp; That is good until it is not.</p> http://www.stockchase.com/opinions/view/155872 Thu, 11 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155872 Power Financial Corp <p>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.&nbsp; It is financial focused.&nbsp; He would break up the capital you want to allocate to financials if you want to buy this.&nbsp; He does not see major earnings growth, but you could argue that the share price is going to go back up again.&nbsp; It is a matter of time before cash comes back into this space.</p> http://www.stockchase.com/opinions/view/155873 Thu, 11 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155873 Corus Entertainment (B) <p>It has been a tough place to be.&nbsp; Pick and pay is going to come out and the market is trying to understand the implications.&nbsp; They capture higher ad dollars because of the specialty channels.&nbsp; Now they can see what the subscriber base is per channel vs. the package.&nbsp; It has a potential of a meaningful upside, however.&nbsp; 12% dividend makes him concerned.&nbsp; The cash flows look pretty good and have not changed since the share price was higher.</p> http://www.stockchase.com/opinions/view/155874 Thu, 11 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155874 A Comment -- General Comments From an Expert <p><span style="color: #ff0000;"><strong>Do I go back into the market from cash?&nbsp;</strong></span> There is always a risk going to cash, but when you get it right it feels good.&nbsp; Try to build a portfolio you can live with in tough times.&nbsp; Remind yourself that going to cash is a strategy that is not sustainable according to history.&nbsp; Buy now if you are all in cash. He is at 25% right now.&nbsp; Make sure they are dividend paying names.&nbsp;&nbsp; Don&rsquo;t make any big bets on sectors or individual names.</p> http://www.stockchase.com/opinions/view/155875 Thu, 11 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155875 A Comment -- General Comments From an Expert <p><span style="color: #ff0000;"><strong>Markets.</strong></span> 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.</p> http://www.stockchase.com/opinions/view/155876 Thu, 11 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155876 Crescent Point Energy Corp <p>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.</p> http://www.stockchase.com/opinions/view/155877 Thu, 11 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155877 Lloyds TSB Group PLC <p>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.</p> http://www.stockchase.com/opinions/view/155878 Thu, 11 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155878 Brookfield Asset Management (A) <p>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.</p> http://www.stockchase.com/opinions/view/155879 Thu, 11 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155879 Barclays Bank PLC <p>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&rsquo;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.</p> http://www.stockchase.com/opinions/view/155880 Thu, 11 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155880 Toronto Dominion <p>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.</p> http://www.stockchase.com/opinions/view/155881 Thu, 11 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155881 Bank of America <p><span style="color: #ff0000;"><strong>(A Top Pick Jan 29/15. Down 26.79%.)</strong></span> 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%.</p> http://www.stockchase.com/opinions/view/155882 Thu, 11 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155882 Microsoft <p><span style="color: #ff0000;"><strong>(A Top Pick Jan 29/15. Up 21.51%.)</strong> </span>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.</p> http://www.stockchase.com/opinions/view/155883 Thu, 11 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155883 Qualcomm <p><span style="color: #ff0000;"><strong>(A Top Pick Jan 29/15. Down 30.36%.)</strong></span> 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.</p> http://www.stockchase.com/opinions/view/155884 Thu, 11 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155884 Magna Int'l. (A) <p>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.</p> http://www.stockchase.com/opinions/view/155885 Thu, 11 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155885 Sun Life Financial Inc <p>Has stayed away from a lot of the insurance companies as he thinks dividend yields are going to remain relatively low, and they don&rsquo;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.</p> http://www.stockchase.com/opinions/view/155886 Thu, 11 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155886 Potash Corp of Saskatchewan <p>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.</p> http://www.stockchase.com/opinions/view/155887 Thu, 11 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155887 National Bank of Canada <p>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 Qu&eacute;bec 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.</p> http://www.stockchase.com/opinions/view/155888 Thu, 11 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155888 Restaurent Brands International <p>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.</p> http://www.stockchase.com/opinions/view/155889 Thu, 11 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155889 Wells Fargo <p>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.</p> http://www.stockchase.com/opinions/view/155890 Thu, 11 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155890 Amazon.com <p>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.</p> http://www.stockchase.com/opinions/view/155891 Thu, 11 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155891 Bank of Nova Scotia <p>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%.</p> http://www.stockchase.com/opinions/view/155892 Thu, 11 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155892 Firstservice Corp <p>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.</p> http://www.stockchase.com/opinions/view/155893 Thu, 11 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155893 Bayerische Motoren Werke AG <p>Has a great franchise in China, but people feel China is slowing down, but even if they stabilize, they&rsquo;ll do very well. European car sales have been much lower than in North America. Their peak was in 2007, and they haven&rsquo;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.</p> http://www.stockchase.com/opinions/view/155894 Thu, 11 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155894 A Comment -- General Comments From an Expert <p><span style="color: #ff0000;"><strong>Markets.</strong> </span>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 3<sup>rd</sup> 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.&nbsp;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&rsquo;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&rsquo;t think we are on the precipice of a new recession, and thinks stocks are starting to discount that.</p> http://www.stockchase.com/opinions/view/155895 Fri, 12 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155895 Tesla Motors Inc <p>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.</p> http://www.stockchase.com/opinions/view/155896 Fri, 12 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155896 Park Lawn Income Trust <p>Cemeteries. Price momentum on this is decent. A little too small for him. Good balance sheet and pays a 4% dividend yield. ROE&rsquo;s are decent at 14%, and it is a nice, stable stock. He would feel comfortable holding this.</p> http://www.stockchase.com/opinions/view/155897 Fri, 12 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155897 Sirius XM Canada Holdings Inc <p>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.</p> http://www.stockchase.com/opinions/view/155898 Fri, 12 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155898 Crescent Point Energy Corp <p>Definitely a &ldquo;go to&rdquo; name for the Canadian retail space, but would not be his 1<sup>st</sup> 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&rsquo;s and they don&rsquo;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. <span style="color: #ff0000;"><strong>(See Top Picks.)</strong></span></p> http://www.stockchase.com/opinions/view/155899 Fri, 12 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155899 Bank of Nova Scotia <p>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%.</p> http://www.stockchase.com/opinions/view/155900 Fri, 12 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155900 Toronto Dominion <p>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.</p> http://www.stockchase.com/opinions/view/155901 Fri, 12 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155901 NYX Gaming Group Ltd <p>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&rsquo;t really have a lot of cash flow today. You are banking on cash flow materializing in the future, which makes it really hard.</p> http://www.stockchase.com/opinions/view/155902 Fri, 12 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155902 Metro Inc (A) <p>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.</p> http://www.stockchase.com/opinions/view/155903 Fri, 12 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155903 Chorus Aviation Inc <p><span style="color: #ff0000;"><strong>(A Top Pick Sept 8/15. Down 4.49%.)</strong></span> 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&rsquo;s at 20%. 5X EBITDA.</p> http://www.stockchase.com/opinions/view/155904 Fri, 12 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155904 Ritchie Bros Auctioneers Inc. <p><span style="color: #ff0000;"><strong>(A Top Pick Sept 8/15. Down 9.87%.)</strong></span> Hasn&rsquo;t worked out as well, but is still one of his largest holdings in 2 of his funds. Ironically, as markets get harder, auctioneers&rsquo; volumes of resales actually pick up. Great balance sheet with no net debt. Score in the top 10% for him on valuation.</p> http://www.stockchase.com/opinions/view/155905 Fri, 12 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155905 Raging River Exploration <p><span style="color: #ff0000;"><strong>(A Top Pick Sept 8/15. Up 9.72%.)</strong></span> 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. <span style="color: #ff0000;"><strong>(See Top Picks.)</strong></span></p> http://www.stockchase.com/opinions/view/155906 Fri, 12 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155906 Transalta Renewables <p>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&rsquo;t expect super cheap valuation for a utility. Quite stable and low volatility. Relatively safe and pays a good yield.</p> http://www.stockchase.com/opinions/view/155907 Fri, 12 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155907 Inter Pipeline <p>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.</p> http://www.stockchase.com/opinions/view/155908 Fri, 12 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155908 Dollarama Inc. <p>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.</p> http://www.stockchase.com/opinions/view/155909 Fri, 12 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155909 Bird Construction Income Fund <p>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.</p> http://www.stockchase.com/opinions/view/155910 Fri, 12 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155910 National Bank of Canada <p>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.</p> http://www.stockchase.com/opinions/view/155911 Fri, 12 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155911 SunEdison Inc <p>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&rsquo;t cash flow at all and has a ton of debt. There is bankruptcy risk here.</p> http://www.stockchase.com/opinions/view/155912 Fri, 12 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155912 Hudson Bay Co. <p>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%.</p> http://www.stockchase.com/opinions/view/155913 Fri, 12 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155913 A Comment -- General Comments From an Expert <p><span style="color: #ff0000;"><strong>Energy.</strong></span> 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&amp;P/TSX Capped Energy ETF (XEG-T), and at least you&rsquo;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.</p> http://www.stockchase.com/opinions/view/155914 Fri, 12 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155914 Brookfield Property Partners <p>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&rsquo;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.</p> http://www.stockchase.com/opinions/view/155915 Fri, 12 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155915 Veresen Inc <p>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&rsquo;s dropped, it has too much debt, and he would question if the 14% yield is sustainable.</p> http://www.stockchase.com/opinions/view/155916 Fri, 12 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155916 Open Text <p>(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&rsquo;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%.</p> http://www.stockchase.com/opinions/view/155917 Fri, 12 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155917 Parex Resources Inc. <p>(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.</p> http://www.stockchase.com/opinions/view/155918 Fri, 12 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155918 Canadian National R.R. <p>(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%.</p> http://www.stockchase.com/opinions/view/155919 Fri, 12 Feb 2016 00:00:00 -0500 http://www.stockchase.com/opinions/view/155919