Stockchase Daily News RSS The Days Comments by Experts en A Comment -- General Comments From an Expert <p>Market Call Tonight is focused on Income Taxes, not investing.</p> Fri, 29 Apr 2016 00:00:00 -0400 A Comment -- General Comments From an Expert <p><span style="color: #ff0000;"><strong>Market.</strong> </span>The year started off with a dramatic decline, and then all of a sudden reversed course. At the beginning of the year there was a disconnect between what we thought was a reasonably good economy, except for the commodity prices, and a market that was discounting the next major recession. It may have been just a bit of sellers from Sovereign Wealth Funds, who were dependent on oil. Doesn&rsquo;t feel it is markedly expensive, but not screamingly cheap either. Both here and in the US, particularly in the US, equity holders in mutual funds have been heading for the exits.</p> Fri, 29 Apr 2016 00:00:00 -0400 A&W Revenue Royalties Income Fund <p>There is only one analyst that follows this, and he is neutral on it. This company is fine. It is a royalty structure of the A&amp;W revenues across Canada. 5.1% yield which is a little attractive, but it is a 99% payout ratio, so would be a little cautious.</p> Fri, 29 Apr 2016 00:00:00 -0400 Air Canada (B) <p>Not a big fan of this airline, seeing it go bankrupt 2 or 3 times during his career. Would be a little careful at this point, because a lot of those results are based on fuel costs which they procured when energy prices were a lot lower. With energy costs having come up, that could impact margins a little.</p> Fri, 29 Apr 2016 00:00:00 -0400 CCL Industries (B) <p>A little pricey. Part of the strength in earnings and appreciation of the stock over the last year has come from the falling Cdn$. A Canadian company, but operations are global, and a lot of their revenues come in on US$. Trading at about 20X next year&rsquo;s earnings. He has trimmed a little, but it is still a core holding. Look for a little better entry point.</p> Fri, 29 Apr 2016 00:00:00 -0400 New Flyer Industries Inc. <p>A very solid company. Their recent acquisition of Motor Coach had them diversifying a little bit away from transit buses. Very, very well-managed. There won&rsquo;t be huge dividend growth, but you could see it ratchet up a little. Have a huge backlog.</p> Fri, 29 Apr 2016 00:00:00 -0400 Starbucks <p>Great company. Still lots of growth ahead of it, but quite expensive, trading at 23 or 24 times earnings. You could buy it here for what it is going to be 5 years from now, but be prepared for that one miss of quarterly earnings, such as we had last week, where the stock was down 6%-7% in a couple of days. The stock is priced to perfection.</p> Fri, 29 Apr 2016 00:00:00 -0400 Apple <p>Reported disappointing earnings. Carl Icahn sold all his shares yesterday, so the stock came down pretty hard this week. At $94, it is just a little over 10X next year&rsquo;s earnings. Still a dominant product in the smart phone area. There are concerns about lack of innovation and lack of growth in China. They&rsquo;re being valued cheaply, but still generates tons of cash. Buying it here your risk is limited. Should they come out with that next big thing, it could be significantly higher. In the interim, you have a strong Eco system in the service side of the business, which was up 20% last year. The iPhone 7 is also coming out later in the year.</p> Fri, 29 Apr 2016 00:00:00 -0400 General Electric <p>A great company and have managed it well. Now trading at a more reasonable multiple. Certainly not a table pounding buy, but a solid hold.</p> Fri, 29 Apr 2016 00:00:00 -0400 Netflix Inc. <p>Loves the product, but not the stock. Have a great subscriber based business model, and always have the potential for price increases, but there is a lot of competition, particularly for content. Trading at 90 to 100 times earnings, and it takes a lot of earnings growth to keep the stock at this multiple, which is just not going to happen.</p> Fri, 29 Apr 2016 00:00:00 -0400 DH Corporation <p>Had a surprisingly poor quarter. It has been a pretty solid and steady company. A lot of their results this week related to one of their more recent US acquisitions. He stills like to give them the benefit of the doubt. One bad quarter doesn&rsquo;t make a bad stock or a bad company. Wouldn&rsquo;t hurt to average down on this.</p> Fri, 29 Apr 2016 00:00:00 -0400 Chartwell Seniors Housing <p><span style="color: #ff0000;"><strong>(A Top Pick May 4/15. Up 19.23%.)</strong></span> A lot of the REITs were under pressure, because of fear of higher interest rates. Still some room for growth. A great industry with good demographics behind it. Still a Buy.</p> Fri, 29 Apr 2016 00:00:00 -0400 Gilead Sciences Inc. <p><span style="color: #ff0000;"><strong>(A Top Pick May 4/15. Down 14.26%.)</strong></span> A lot of the drop was in the last 2 days. They disappointed on earnings. Has a lot of cash generation. Big profits. At 8X earnings, you can afford to wait for the next blockbuster, and he is fairly convinced that they will have one soon.</p> Fri, 29 Apr 2016 00:00:00 -0400 Tourmaline Oil Corp <p><span style="color: #ff0000;"><strong>(A Top Pick May 4/15. Down 32.12%.)</strong></span> You don&rsquo;t have to look any further than the price of gas, versus a year ago to see why it is down. It has grown tremendously over the past year. Very, very well-managed company. Has been busy enhancing its infrastructure to position for the eventual recovery in natural gas.</p> Fri, 29 Apr 2016 00:00:00 -0400 Trans Canada Corp <p>Generally, it pays to hold this for the long-term. However, valuation is not cheap for a regulated industry. Trading at 20X this year&rsquo;s earnings and 16X next. The 4.3% dividend yield is very attractive, and they have a history of dividend increases. If you put it away, you may not get huge capital appreciation, but if you only get 4%-5% a year, and adding that to your yield, it is a very nice long term rate of return. A good, solid stock to hold in a portfolio.</p> Fri, 29 Apr 2016 00:00:00 -0400 Twitter, Inc <p>A very embattled company. Has dropped substantially from where it was valued when it first came public. This is starting to get a little interesting, perhaps as a speculative Buy. Trading at an all-time low. They also have $3 in cash on the balance sheet. Not going out of business anytime soon.</p> Fri, 29 Apr 2016 00:00:00 -0400 Berkshire Hathaway Inc. (B) <p>This has done very well, not so much recently with its market investments, but it&rsquo;s private investments. He worries because of Mr. Buffett&rsquo;s age, and wouldn&rsquo;t put too much money into it.</p> Fri, 29 Apr 2016 00:00:00 -0400 Stantec Inc <p>Great company. Recently made an acquisition of a company out of Colorado. Expects this will increase their non-Canadian revenues up to 20% of their business. Trading at a reasonable multiple. Thinks this will benefit immensely from the new infrastructure program that the government wants to roll out over the next few years. A good area to be in.</p> Fri, 29 Apr 2016 00:00:00 -0400 Bank of Nova Scotia <p>Longer-term valuations are still pretty solid for all of the Canadian banks. Trading at about 11X earnings with a yield of 4%+. A good addition to your portfolio.</p> Fri, 29 Apr 2016 00:00:00 -0400 IGM Financial Inc. <p>Money has been coming out of equity mutual funds. Ironically this one has been doing very well relative to the industry over the last year. A tough business and could become even tougher on July 1 when CMR2 comes out, the new mandate of the OSC, where fees are going to be disclosed. Valuation is cheap, but there are too many headwinds. He would prefer Fiera Capital Corp (FSZ-T) which focuses on the institutional and US markets.</p> Fri, 29 Apr 2016 00:00:00 -0400 Canadian Pacific Rail <p>This got a little rich when they were transporting tons and tons of coal and oil. Shipments of coal have come back down dramatically, but the valuation has also come down. Earnings continue to stay flat and pick up a little. We are now back to about 15X next year&rsquo;s earnings, which is pretty reasonable for this rail.</p> Fri, 29 Apr 2016 00:00:00 -0400 Valeant Pharmaceuticals <p>Just too many moving parts here. They filed their annual report today, just in time for the deadline to avoid default. This is a company under bombardment on too many fronts.</p> Fri, 29 Apr 2016 00:00:00 -0400 Rogers Communcations (B) <p>Has slipped back off its highs a little. Thinks they got adverse press about the NHL hockey contract, with no Canadian teams in the playoffs. They have done a great job on the customer complaint side. It is a fight for every customer, but they seem to be winning their share these days. Reasonable valuation and has a good yield.</p> Fri, 29 Apr 2016 00:00:00 -0400 Performance Sports Group <p>This just took a major haircut. Has never seen a stock fall so precipitously in one day, and yet still not be concerned about bankruptcy. Had announced the currency exchange was going to hurt them in the quarter, but that has gotten better. Also, announced they were going to take a write off on a receivable to Sports Authority which had declared Chapter 11. They are far from any breach of their debt covenants, and are still generating a ton of cash. A very well-managed company.</p> Fri, 29 Apr 2016 00:00:00 -0400 Walgreen Boots Alliance <p>This has been as high as $97 last summer when the market peaked, and is now down around $80. Good financial operators and have made several very strategic acquisitions. Trading at around 15-16 times earnings. Lower than the market multiple, yet better growth potential. Well positioned to continue benefiting from the aging population&rsquo;s healthcare needs. Dividend yield of 1.83%.</p> Fri, 29 Apr 2016 00:00:00 -0400