CAE Inc (CAE.TO)

It has always been a little too highly priced for his blood, but is a technological leader. They are taking on training programs for various airlines. There is an estimated 60,000 shortfall for pilots in the world that need to be trained. If it pulled back he would take a serious look at it.

He has not bought it because it is pretty much takeover proof. They have been riding the wave of the new generations of airlines. That cycle is going to come to an end at some point. He does not feel it is a great investment.

(Market Call Minute.) A simulation company and we are seeing improvements in defence spending and commercial aerospace.

They provide modelling simulation and training services for both civil and defence aviation. The military side, which has been quiet for some time, just recently seems to have increased a little. Have just gone through a period where they invested a lot of money in pilot training facilities. As a result he expects CapX is going to be quite a bit lower going forward, which will make utilization rates look a lot better, particularly since there will be a lot of pilots retiring over the next couple of years. Yield of 1.87%.

He likes it and thinks it is a good buy here. It has done okay. He bought it in the fall and was patient. They are a Canadian manufacturer that has leadership in their space and benefit from the rising US dollar. You should see 8 to 10% earnings growth over the next 3 to 5 years.

(A Top Pick Nov 11/14. Up 6.47%.) The stock is fighting to get above its old highs. If it can clear $15.50-$15.70, we have blue sky and it is on its way. This is aerospace, so you key off Honeywell (HON-N) which made a 52 week high last week.

A global leader in flight simulation training, both in civil aviation and defence. Also, branching out into security and healthcare. Reporting on May 26 and expecting $0.24. Has a 15.3% forecasted ROE. Large debt of $1.2 billion, but the servicing of it appears pretty good. Also, has $250 million in cash. Earnings are forecasted to grow 14% this year and 16% next. This gives a PE to growth of .96.

(A Top Pick Feb 27/15. Down 2.41%.) A leading player in the simulation space. With the number of active fleets growing, we need more pilots and they need to be certified, along with the existing pilots that need to be re-certified. Diversified with 60% in civil, 20% in defence and 10% in health care.

(Top Pick Mar 18/14, Up 0.89%) One of these times he will be right. The long term breakout is Feb/15 and some day it will break out for good. It repaired a lot of the underperformance so he is positive on the stock.

Aerospace sector looks attractive. It has room to grow. The driver is Asian airlines. He lightened up on it because it seems to be in a flattish portion of its growth curve. It is attractive overall but it is just a hold right now.

A fantastic company, but not such a great stock. Never seem to quite make the numbers. Technology is great and their products are great. Demand for pilot training is increasing, especially in emerging markets.

A leader in the simulation, training product space. Their business is 60% civil, 30% defence with 10% in health care. With the growth in the number of active new fleets, he is seeing new pilots required along with new pilot certification, not to mention re-occurring pilot certification. Right now there are about 28 commercial plane assemblies per week, and for every one of those planes, you need 10 to 12 pilots. There is a lot of growth in the space which is translating into contracts. Dividend yield of 1.86%.

(A Top Pick Jan 6/15. Up 2.85%.) Any respectable company involved with aerospace has been working higher over the past several years. This includes defence contractors. He would stick with this is he thinks it is going to go higher.

The military train their people in simulators more and more. They have an excellent portfolio of civil and defense.

(A Top Pick Sept 16/14. Up 12.47%.) This late in the cycle, he is a believer in sticking with a dominant theme, which in this case is healthcare and aerospace. Feels that aerospace is a long-term theme. Chart shows multiyear highs, so if it breaks above $15.50 in volume, then it is blue sky.