New Flyer Industries Inc. (NFI.TO)

They just got new contracts. Long term holding. A cash flow machine. They have modernized over the years. Decent yield. The tariff issue affects only 3 percent of the cost of manufacturing on their buses. The order backlog is very solid. Trading at 13-14 next year earnings. (Analysts’ price target is $65.57)

Gone sideways for past year. Great job growing their base, stock’s done incredibly well last few years. But if economy is slowing down, it’s not the part of the cycle where you’d want to buy.

The bus manufacturer just came out with earnings, which should add support at $47. He would expect to see a return to $60. Yield 3.0%. (Analysts’ price target is $65.75)

(A Top Pick May 03'17, Down 2%) It is off a couple of percent because their last quarter sales were off. They think it is a one off so he is looking for better results in August. They have done a great job of having a presence in the US.

Likes this, though he's sold a big chunk of his shares recently to take profits (his position was getting too large). Below $50 he'd look at this again. They're well-balanced between US and Canadian operations. Recent numbers look good
with growing orders, but it takes time between orders and delivery of buses--will those cities still close those deals.

Has been a huge winner in the last couple of years. It has become one of the only players through acquisitions. Some concerns over NAFTA is affecting the stock. They have the structure to adapt. It looks interesting now.

New Flyer has been caught up with some of the other reasonably-priced dividend-paying stocks that have been left behind as people chase growth stocks. This is a global phenomenon, and shows particularly in the US. This company scores in the top 20% on valuation and the top 20% on stability, has given a 22% return on equity and trades at 15x earnings. It offers a good yield (3%) and a low payout ratio. However, it did miss on earnings in the last quarter. They continue to have a backlog and so they have a growth profile ahead of them.

Unclear how tariffs will affect them. Significant production in US. Doing well, has a good backlog. From technical standpoint, not sure it’s reached bottom. Hits new lows frequently. Would like to see it build a bit of a base, and if it does, probably safe to step in. Well run, prospects are excellent. Cautious until trade war dust settles.

He did own it for some time and sold it because there is indication that demand is waning. There are indications that luxury motor coaches are peaking in that sector also.

(A Top Pick March 14/17 Up 15%). Better known as New Flyer, the bus manufacturer. He has recently pulled back, which started with average bus sales falling 11% in the first quarter. He thinks the stock was due for a correction and still is buying it.

He doesn't know how trade tariffs will effect NFI. They probably produce proportinately more in Canada, so they may pay tariffs. They had a modest miss in Q1, but they still have a 3-year backlog in production. This is an opportunity.
NFI will be fine. They have U.S. contracts converting into Canadian dollars. Not expensive now at 15x earnings.

YTD down 12%. High valuation, though run very well. If this is a major holding, then be ready to sell it when this moves up a bit. This won't perform like it has in the past three years.

The volume is good, but its trend is poor, not a good combination. It'll likely fall to the mid-40s, then see what to do.

The bus manufacturer better known as New Flyer. The ROE is in the high-teens, good, but not on his radar. He thinks the stock could continue to rise and he will continue to watch.

Great Canadian success story, with lots of US contracts. Some near-term NAFTA risk, significant tariffs would be a vulnerability on their Canadian manufacturing facilities. More fully valued now.