Daily Stock Opinions and Ratings

Opinions

Michael Simpson, CFATranscontinental Inc. (A)TCL.A.TOTOP PICKMay 04, 2016

You want to own the best and lowest cost producer, so when the Toronto Star wants to close their big huge facility in Vaughn, this company is going to do that business. They are also big into flyers. Although there is a lot of digital media, flyers are still used. As discount grocers are getting more traction, flyers are very important. Also, diversifying into packaging, which is smart, and is about 10% of their revenue. Trading at about 5X cash flow, with 1X debt to cash flow. Generates a lot of cash flow, which they give back to shareholders in the form of dividend increases and buying back shares. Dividend yield of 4.05%.

Michael Simpson, CFA

Owned

Unlock Rating

$18.21

Stock price when the opinion was issued

$4.97

As of Jun 09, 2026. Market Open.

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DON'T BUY

The dividend is 16%, which is a clue. The market fears the dividend will be cut. The chart has been hammered--something happened to it. Is a sharp decline in the chart. Avoid.

SELL

Printing is in decline. Trying to get into packaging. Stock's always been cheap, but it's not a growth market. Instead, look at DCM.

SELL

Not interested. Cheap for a reason. De-risked balance sheet, compelling dividend, seemingly low valuation. Not in fast-growing industries. Publishing's in secular decline. Packaging has had tepid growth.

SELL

It is in a downtrend with a series of lower highs and lower lows. It needs to stop this trend and move sideways. You should look at highs and lows on a weekly chart.

DON'T BUY

Longer-term downtrend, the opposite of what the market's a doing in a negative way. It's a big sign that something is not moving in the right direction. Be cautious.

SELL

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. We think TCL.A continues to have potential as it transitions its print business into digital media operations and through acquisitions. However, given the lack of growth we have seen over the years and the slow growth expected, we think there are other names today that can pay a similar yield, while showing better growth. This is in part due to the market sell-off, which has resulted in many quality names having higher dividend yields. We view the recent rally in TCL.A shares as an opportunity to sell and raise cash for future opportunities.

PAST TOP PICK

(A Top Pick Aug 11/21, Down 32%) This didn't work out. He sold it last November. Too early to return to this. Doesn't work in this macro economy.

SELL

On the surface, trades cheaply. Compelling dividend. Problem is sun-setting business in printing, and that cash cow is shrinking faster than growth of other divisions. Earnings peaked in 2018. Era of steady dividend grower is over. Dividend at risk if can't restore profitability. Value trap. Better places to invest.

SELL

When the facts change, you have to change your mind. He sold. A value, turnaround story. Pressure from commodity prices. Earnings recovery is not a 2022 story.

BUY

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. The most recent quarter was a disappointment but the business fundamentals are strong. Debt has been cut in half and cash flow is solid. Relatively cheap to organic growth and dividends. Decent income stock. Unlock Premium - Try 5i Free

DON'T BUY

He looked at this 18 months ago. Growth isn't good enough for him, though their results have improved. In this space, consider Richard Packaging, which he owns and offers high returns but is not know well.

BUY ON WEAKNESS

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. Valuation is attractive at these levels. It pays a high but safe dividend. Growth will be slow and steady with economic recovery. The current valuation should be supported. Good for stable dividends and potential upside. Unlock Premium - Try 5i Free

BUY

Packaging and legacy printing. Struggling with commodity price headwinds, mainly in resin. They do pass extra costs through to customers, but there's a lag. Right now underearning, but this should correct next year. Low valuation at 8x earnings, good entry point. Capably run, conservatively financed.

BUY

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. Their most recent quarter was a miss. The higher input cost has affected their costs. They should be able to increase prices to see growth. The price is cheap so expectations are not high. Unlock Premium - Try 5i Free

BUY ON WEAKNESS

Canada's largest printing and packaging operation. EPS was .51 cents. A bit of a disappointment. They benefitted from the emergency wage subsidy. Right now, they are facing difficult comparison to last year, especially with currency conversion with the Canadian dollar coming back to strength. Yields 4%. Has M&A optionality. Has re-rating potential as their packaging business grows. This pullback is a buying opportunity.

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Michael Simpson, CFATranscontinental Inc. (A)TCL.A.TOTOP PICKMay 04, 2016

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