Hydro One (H.TO)

He does not look at the balance sheet. ETFs are 99% of what he does. There is not enough evidence in the chart to say where the floor might be. Around the issue price there should be some natural support ($20.50). He has been nibbling away at interest sensitives here. He is buying REITs.

Another one of the stocks that has been caught up in the interest rate trade. The biggest companies that are going to be tied to interest rates are utilities, telecommunications and real estate companies. On the positive side, banks and lifeco shares have really appreciated. This is the inverse trading that is happening as people try to position themselves for a world with Donald Trump as president. All the positioning is probably way premature, but that is what markets do.

(Market Call Minute.) He is very cautious on utilities. It is very crowded. People have been hiding in utilities, telcos and REITs to try and get a better dividend than what they are getting in bonds, but there just isn’t the dividend growth to support. You want to look for growthier names.

Probably a great widows and orphans stock. A great one to put in your RRSP and just sit on it. Pays a nice dividend and will probably go up over time. He views it as being a bit expensive right now. A very “steady Eddie” type of business. A good solid investment. The province of Ontario will probably put more stock into the market, and that would be the opportunity.

(Market Call Minute.) There is not enough disclosure for him to be comfortable with. Everybody should own it, if it had disclosure.

(Market Call Minute) Likes the utility sector, but he does not want to partner with the Ontario government which owns 40%.

Utilities will generally do well in the summer time. This is the right kind of stock to own. You have yourself a winner until the end of October.

One of the big beneficiaries along with a lot of other utilities in the low interest rate environment as people search for yield. Also, people feel it is very safe and stable. Still largely government owned. This is expensive.

(Market Call Minute.) Everybody likes utilities right now because they like the yields, which makes this attractive. He doesn’t like the situation with the labour in the company and the continual involvement by the Ontario government, which he doesn’t trust very much.

He doesn’t want to participate in the least efficient and most expensive hydro supplier in Canada. They have a lot of stranded assets. Solar power is going to increasingly become a major competitive threat. If you want to own this, wait until the province of Ontario sells more of it. The dividend is greater than what it should be. He would prefer Altagas (ALA-T) which yields about 6.5%.

Just sold his holdings recently to get his Top Pick. It is just Ontario for now. Was trading at a premium valuation, but without the growth prospects. (See Top Picks.)

(Market Call Minute) Wonderful for Canada to have a new blue chip. A good hold. More shares coming into the market for more liquidity.

The “go to” name in the space for what they do. The expectation is that it is going into the composite index, which will add another leg of buying, as indexers need to purchase it. They now have a platform for acquiring other power producers which he expects they will do. There is also a fair bit of internal cost cutting they can do. The only potential knock is that the government will continue to sell down their holdings over time. Each one of those times would probably be a buying opportunity.

A pretty defensive stock, almost a bond proxy. A very stable, regulated utility in Ontario. Growth that can be expected is much lower than what you can get typically, so you are looking at a GDP type rate base growth. They also have a strategy of acquiring smaller utilities across Ontario. He would buy this if you are looking for very, very low risk and volatility. Just clipping dividends with a little bit of growth over time. 3.5% dividend yield.

He has Emera and EMB-T instead. H-T is not for him. Part of the problem is that the government will be a constant seller of the stock. He would feel better if the government sold all of it.