Bank of Montreal, Enghouse Systems and More at 52-week Highs and Lows (Jan 22-28) - Markets largely rebounded, shaking off the feat of the coronavirus affecting earnings. All sectors of the S...
Coronavirus Stock Market Scare: What Stocks to Buy? - In the last few days, North American indices shed gains as fears of the new disease, the coronavirus, reach...
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Stocks In The News
Daily Market Highlights
 | 29/Jan | Apple
earnings take some focus off virus concerns
| ||
 | 29/Jan | Boeing
swings to annual loss
| ||
 | 29/Jan | Canadian Pacific Rail
reports Q4 profit up
| ||
 | 29/Jan | Goldman Sachs
shares rise after bank gives higher targets
| ||
 | 29/Jan | Mastercard Inc.
beats profit estimates
|
Latest Stock Opinions and Top Picks from Market Call Guests
BONDS, REITS & DIVIDENDS (Large)
This has done so well as the majority are rental properties mostly in Toronto, where the market is so tight. They have been able to increase rents. The valuation is high now, trading at 28 times free cash flow. They also have exposure in the Netherlands. The asset class is so desirable right now. Maybe one day they will be bought out. The yield is not great here either. Yield 2.4%read more
Debt? The did a secondary issue, which was to go towards debt reduction. This has reduced debt to 55%. They focus on medical facilities and parking and it is very stable. They have expanded into Germany. The structure is clean and easy to understand. He does not own it at this valuation. He wants to see exposure limited to Canada so it is very easy to understand.read more
This was a REIT that had many different assets. It has been busy dispossessing multi-residential in the US. They have reduced debt. This has caused them to under-perform in the short term. He still struggles to understand their strategy. He does not buy into their global diversification strategy -- you need a theme. He wants to be able to pick an investment that follows the next upcoming trend. So he avoids it.read more
He had owned this back in 2018. Their largest exposure was in Europe and was backed by Brent oil prices. When differentials were negative in Canada they benefited. Energy in Canada is so cheap relative to European assets, so he thinks the opportunity lies back home in Alberta. So he does not own this. There is also a risk of the high dividend being cut. Yield 13%read more
Top Picks
A play on e-commerce. It is not cheap, but he likes that Amazon is a minority shareholder and they hold a contract with Canada Post offering same day delivery. They have hired more pilots, which hurt their financial position last year, but they are seeing revenues exploding now. Yield 0.81% (Analysts’ price target is $117.50)read more
Great management team in Alberta, who owns 25% of the shares. Their last earnings reported a 10% increase in profitability as they have reduced costs internally. The exposure in Calgary and Edmonton has stabilized. Their cost per door is almost half of its peer group. Yield 2.09% (Analysts’ price target is $52.10)read more
Markets largely rebounded, shaking off the feat of the coronavirus affecting earnings. All sectors of the S...
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GLOBAL
Brookfield is a good steward of capital. great stock. This holds long-life assets with big moats and demand lots of capital to build (thus hard to replicate). They grow their dividend. He's long owned this, happy to, but he ensures that infrastructure stocks he holds score high in ESG (sustainable stocks). BIP does.read more
A green energy stock? Money flows are attracted to sustainable stocks. Blackrock two weeks ago announced this. NEE is his top recommendation in this space; it's the purest play in wind and solar energy in the States, and boasts 8% growth. It's expensive now, however. NPI-T is his Canadian pick.read more
They got into trouble with a major US acquisition some years ago, but that was a buying opportunity to pick up their spin-out, Altagas Canada. Now, ALA is paying down debts by selling assets, so that checks off that box. They're a utility, mid-stream, a little of everything. That said, there are better opportunities elsewhere.read more
It has struggled as it competes more with Amazon, but what they do well is B2B (not B2C). Fedex is seeing a lot of change to build that infrastructure to fulfill B2C. If you are patient, there is enough asset quality in Fedex that they own around the world to make it worth holding. Be patient. Fedex will come around maybe in three years. Also own this with Cargojet or Amazon.read more
It's had a rough 18 months, but remains a quality company. Activists may be trying to break up this company. It's not his favourite stock. Earnings came out today and they announced re-structuring charges, and they are in the middle of litigation about a chemical leaching into water. Pass. If you already own it, you probably have a big capital gain, or you can switch to Honeywell.read more
In a few years, Netflix will be every viewer's base. On top of that, you may subscribe to Disney+ or HBO. The amount on streaming spend is $50-60. DIS has a great franchise of content (Disney, Star Wars, Pixar). He trimmed his holding when this rose last year. He really likes it. Buy on dips.read more
Top Picks
In the last few days, North American indices shed gains as fears of the new disease, the coronavirus, reach...
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CANADIAN LARGE
(A Top Pick Mar 06/19, Up 27%) Management is doing everything they should. They just bought assets in the massive California market as well as in the Caribbean. They leveraged some refining capacity to send fuel to some locations. They buy wholesale that they refine, then sell it at retail--that's the spread they make. Happy to hold this. It's a mini-Couche Tard (ATD'B), but PKI more nimble in making acquisitions and own a refinery.read more
(A Top Pick Mar 06/19, Up 37%) They go around the world making strategic infrastructure assets, currently targeting India like water treatment facilities. They go to countries that other countries can't, with their strategic relationships and can write a big cheque--they can finance big assets. They take debt to finance the asset and put the debt on the asset, a non-recourse, something he really likes, because if something were to happen at the asset level, the recourse from the bondholders is down to the asset and not back to the company. Strong managers.read more
(A Top Pick Mar 06/19, Up 9%) A US real estate play in fulfillment centres, but WPT hasn't been keeping up with the TSX or US REITs, but he's holding onto it. It's a USD issue, but they will have a Canadian listing with Canadian dividends and this might open it up to Canadian investors. Private equity is looking for big assets like this, so WPT could be a take-out target.read more
One of his largest holdings. They fly Air Canada's regional routes, a deal signed through 2035 and have ratified the pilot agreement. Pays a good 6% yield with a stable free cash flow. Also, they lease regional planes internationally, which adds to growth. They can grow, and they have capital behind the company. Really likes the story. If the coronavirus does pressure this stock, then buy the dip.read more
Top Picks
He just bought it. He likes the tech space. OTEX is the biggest generator in information management done through software. Info analysis is key for companies to compete globally. OTEX is also in the cloud and supply-chain logistics. All tailwinds. Trades at a low 15x earnings. (Analysts’ price target is $63.57)read more
The TSX closed closed its worst week last Friday due to concerns over the coronavirus impacting corporate e...
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Today's Market Outlook
Paul Gardner, CFA
Caronavirus concerns? Copper and energy have been impacted the most. SARs had a 6% death rate, while Corona has a 2% rate. The situation to know more is better than with SARs. This is a concern, but it probably just a blip. Markets are getting used to huge news events and quickly discounting them. The question is, does this virus have a long last impact on demand the market? We should be concerned about this, but it seems less dangerous than SARs. The market is already showing relief.
More market comments
Market Comments
Signal
Opinion
Expert
BUY WEAKNESS
BUY WEAKNESS
January 29, 2020
This has done so well as the majority are rental properties mostly in Toronto, where the market is so tight. They have been able to increase rents. The valuation is high now, trading at 28 times free cash flow. They also have exposure in the Netherlands. The asset class is so desirable right now. Maybe one day they will be bought out. The yield is not great here either. Yield 2.4%
Show full opinionHide full opinion
This has done so well as the majority are rental properties mostly in Toronto, where the market is so tight. They have been able to increase rents. The valuation is high now, trading at 28 times free cash flow. They also have exposure in the Netherlands. The asset class is so desirable right now. Maybe one day they will be bought out. The yield is not great here either. Yield 2.4%
HOLD
HOLD
January 29, 2020
Debt? The did a secondary issue, which was to go towards debt reduction. This has reduced debt to 55%. They focus on medical facilities and parking and it is very stable. They have expanded into Germany. The structure is clean and easy to understand. He does not own it at this valuation. He wants to see exposure limited to Canada so it is very easy to understand.
Show full opinionHide full opinionDebt? The did a secondary issue, which was to go towards debt reduction. This has reduced debt to 55%. They focus on medical facilities and parking and it is very stable. They have expanded into Germany. The structure is clean and easy to understand. He does not own it at this valuation. He wants to see exposure limited to Canada so it is very easy to understand.
DON'T BUY
DON'T BUY
January 29, 2020
As an Industrial property REIT, it is in a really good space. He tends to avoid companies with external management contracts. This may not make management be in alignment with shareholders -- "two for me; one for you". He has others he favours in the industrial space.
Show full opinionHide full opinionAs an Industrial property REIT, it is in a really good space. He tends to avoid companies with external management contracts. This may not make management be in alignment with shareholders -- "two for me; one for you". He has others he favours in the industrial space.
DON'T BUY
DON'T BUY
January 29, 2020
This was a REIT that had many different assets. It has been busy dispossessing multi-residential in the US. They have reduced debt. This has caused them to under-perform in the short term. He still struggles to understand their strategy. He does not buy into their global diversification strategy -- you need a theme. He wants to be able to pick an investment that follows the next upcoming trend. So he avoids it.
Show full opinionHide full opinionThis was a REIT that had many different assets. It has been busy dispossessing multi-residential in the US. They have reduced debt. This has caused them to under-perform in the short term. He still struggles to understand their strategy. He does not buy into their global diversification strategy -- you need a theme. He wants to be able to pick an investment that follows the next upcoming trend. So he avoids it.
DON'T BUY
DON'T BUY
January 29, 2020
He had owned this back in 2018. Their largest exposure was in Europe and was backed by Brent oil prices. When differentials were negative in Canada they benefited. Energy in Canada is so cheap relative to European assets, so he thinks the opportunity lies back home in Alberta. So he does not own this. There is also a risk of the high dividend being cut. Yield 13%
Show full opinionHide full opinionHe had owned this back in 2018. Their largest exposure was in Europe and was backed by Brent oil prices. When differentials were negative in Canada they benefited. Energy in Canada is so cheap relative to European assets, so he thinks the opportunity lies back home in Alberta. So he does not own this. There is also a risk of the high dividend being cut. Yield 13%
COMMENT
COMMENT
January 29, 2020
Industrial REITs? He likes WPT Industrial REIT. In the US he likes Prologis, but the valuation is too high. Whereas WTP trades at a discount to NAV.
Show full opinionHide full opinionIndustrial REITs? He likes WPT Industrial REIT. In the US he likes Prologis, but the valuation is too high. Whereas WTP trades at a discount to NAV.
COMMENT
COMMENT
January 29, 2020
Industrial REITs? He likes WPT Industrial REIT. In the US he likes Prologis, but the valuation is too high. Whereas WTP trades at a discount to NAV.
Show full opinionHide full opinionIndustrial REITs? He likes WPT Industrial REIT. In the US he likes Prologis, but the valuation is too high. Whereas WTP trades at a discount to NAV.
PAST TOP PICK
PAST TOP PICK
January 29, 2020
(A Top Pick Mar 20/19, Up 12%) Now that Yellow Pages has reorganized and stabilized their business, there is very little debt. This convertible debt is almost risk-free now. Their business has not necessarily done great, it creates free cash flow (with a 32% margin) and pays an 8% yield. He expects the bonds to be called in the next year.
Show full opinionHide full opinion(A Top Pick Mar 20/19, Up 12%) Now that Yellow Pages has reorganized and stabilized their business, there is very little debt. This convertible debt is almost risk-free now. Their business has not necessarily done great, it creates free cash flow (with a 32% margin) and pays an 8% yield. He expects the bonds to be called in the next year.
PAST TOP PICK
PAST TOP PICK
January 29, 2020
(A Top Pick Mar 20/19, Up 8%) It trades at a discount to their peers -- it is cheap. They have realigned management, bringing it back internal, so it is again re-aligned with unit holders. They have a 99.5% occupancy rate in the Midwest and South -- all logistic centres -- and is very stable. There is way more value versus owning the US company equivalent -- trading 20% cheaper.
Show full opinionHide full opinion(A Top Pick Mar 20/19, Up 8%) It trades at a discount to their peers -- it is cheap. They have realigned management, bringing it back internal, so it is again re-aligned with unit holders. They have a 99.5% occupancy rate in the Midwest and South -- all logistic centres -- and is very stable. There is way more value versus owning the US company equivalent -- trading 20% cheaper.
PAST TOP PICK
PAST TOP PICK
January 29, 2020
(A Top Pick Mar 20/19, Up 19%) It trades at a huge 15% discount to NAV. They just bought WestJet. It should be trading at $100.
Show full opinionHide full opinion(A Top Pick Mar 20/19, Up 19%) It trades at a huge 15% discount to NAV. They just bought WestJet. It should be trading at $100.
