Stockchase Opinions

John Zechner Shaw Communication (B) SJR.B-T PAST TOP PICK Jul 08, 2021

(A Top Pick Sep 03/20, Up 52%) Likes telecom in general. He sold out into the Rogers bid. If the deal doesn't go through, downside might be 30% or more.

$35.725

Stock price when the opinion was issued

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SELL
Allan Tong’s Discover Picks Since March 15, Shaw has gained 5.1%, lagging Telus at 6.5% and BCE at 13%. (Rogers is -2.2%.) There's little catalyst to increase the share price, so the question becomes whether to hold on or sell now. The downturn this month may offer a buying opportunity, but we're talking a quick trade. Shaw's fate is now tied to the soap opera at Rogers and hurting shares. Further, there's a risk that Ottawa will not approve the merger, though the street is confident it will happen. If the deal collapses, SJR.B stocks could tank. Are you willing to take that risk, or will you be cautious and sell? Read The Battle for Rogers and 4 Other Telecom Stocks to Consider for our full analysis.
PAST TOP PICK
(A Top Pick Dec 29/20, Up 71%) He bought if for the fundamentals. He sold, and shifted the money into Rogers. He's not a risk taker.
DON'T BUY
Allan Tong’s Discover Picks Shaw doesn’t suffer the same corporate soap opera, but it’s still part of the drama because of this deal. I know, I know, I wrote about Shaw and Rogers recently, but things keep changing fast. If I want drama, I’ll watch The Squid Game or Maid on Netflix.
PAST TOP PICK
(A Top Pick Dec 29/20, Up 76%) Believed entire sector was cheap and Roger's purchase of business was a bonus. Good dividend yield and grow opportunities for the sector.
PAST TOP PICK
(A Top Pick Jan 06/21, Up 70%) The deal should go through. Stock is still at a healthy discount to the deal price, which would be a 10+% return in 3 months. He's holding, but not buying more.
PAST TOP PICK
(A Top Pick Apr 09/21, Up 19.74%) Bought it as merger arbitrage. He made his target profit of 24% and moved on.
COMMENT
No real clarity yet on the takeover. Frustrating. Rock solid. Free cashflow generator, solid dividend. Long term, it would be harder for them to carry on as a standalone company.
PAST TOP PICK
(A Top Pick Aug 26/21, Down 5%) Last year, he considered this safe with some upside, but that hasn't happened. The Rogers deal has gone slower than expected, but it should close. He sold half his position at $38.50 last March, at a $22 ACB. The deal should close at end-2023.
COMMENT
Rogers will probably win the court battle, though there will be concessions. You better like Rogers.
DON'T BUY

It comes down to the Rogers deal, which the street thinks will happen, but this is the fourth deadline extension. The deal has been priced into shares, so there isn't much upside. Better to buy Rogers or Telus than Shaw.