BCE Inc. (BCE.TO)

(A Top Pick Feb 21/14. Up 22.27%.) Was a little surprised the way it ran up the way it did. The current price of around $55 is a good buying range. Likes the business they are in. They are very competitive.

(A Top Pick Jan 29/14. Up 6.8%.) 3.35% bond maturing June 18/19. The bonds are fairly liquid and good quality as well. Have a good following in the retail world.

Got very expensive and was downgraded. He would look for it to get closer to $50 before getting back in. Expects to get there in the next month or two.

Had seen this weakness coming a little, so he bought some more today. It could come back to around the $53 level, or just below the $52 level, which would probably get the buyers very interested. The whole telecom space has been a bit weak. He would like to not see it get below $50.

Management has done an excellent job turning this company around over the last 5-6 years. A giant in the industry. Very solid cash flows, but valuation has gotten up there. Just raised their dividend by 5%. Trades at EBITDA at about 8.5X, so the valuation is rich. In a world where you have very low interest rates and where a lot of investors want to get off resource stocks, they turn to a large Canadian liquid name; as a result this company has enjoyed a good ride. If you don’t own, buy it on a 10% pullback, but if you do own continue to Hold.

All the telecoms seem to be doing well. He is more favourable to Rogers (RCI.B-T) at this time, given the valuation relative to Telus (T-T) and BCE. You can’t go wrong with this company, but at this level he doesn’t see a tremendous amount of upside. They are doing the right things by taking excess cash and buying back stock and increasing the dividend.

(A Top Pick Jan 9/14. Up 36.49%.) Has added to his position and is still buying.

Telecoms in Canada have valuations that are between 6 and 8.5 times cash flow. This one is at the high end of this scale. This at the expensive end of the range. You should trim when you get to this point.

Management has executed phenomenally here. Their valuation is not as outrageous as some other areas like utilities and pipes. He does not see a lot of return left in it. You are better off with his Top Picks.

This has done extremely well. You are getting a great dividend at 4.2%, which is expected to grow probably by 5% a year. Valuations are somewhat stretched in the telco space in general. However, in Canada we are looking at yields that are falling in terms of government yields and interest rates, which only makes names like this much more attractive.

This is a non-resource/nonfinancial place for yield. It is quite expensive now. This is a 2%-3% earnings grower with a yield of about 5%. The safe yield is highly attractive, so he would think the stock is ahead of itself, and could see it flat a year from now. You are basically just holding this for the dividend.

Fantastic assets. Liked their acquisition of Bell Aliant. They have so much free cash flow. Will spend their next several quarters lowering the leverage of the balance sheet. Sold his holdings about 4 months ago, but still owns bonds. He likes the fibre play, which he feels is more dynamic than the cable. Have good media assets and good pipelines. He would have no problems owning this.

Reached another all-time high today. This is moving more towards content. Made the Astral Media acquisition which is a move towards mobile, and that will increase the wireless data. A defensive name for a potentially volatile market. Yield of 4.33%.

Inflation numbers out of the US is pretty much at an all-time low, and he doesn’t expect it to be rising with the economy softening. All of this translates into no rush for interest rates to go up, so you are now starting to see money go back into the telcos. Another factor that has been working in their favour is the risk of a foreign carrier coming in. Much less today than it was in the past. This company has done a great job at growing their percentage of revenue from the wireless side. In 2007 it was about 15%, whereas today it is closer to 40%. He likes to see this because the wireless space is quite profitable, especially with the increased sales in smart phones.

This is a company that has paid a nice dividend and done well for its investors for a long period of time. He would recommend being cautious at these levels. It has been a definite benefit to the sector rotation that has gone on in valuation. There isn’t a lot of news that is pushing it other than maybe some better synergies out of the Bell Aliant deal they did last summer. Be cautious and maybe take some profits to redeploy them elsewhere in the market.