Transcontinental Inc. (A) (TCL.A.TO)

It's down about 35% over 52 weeks. They were in the print business and transitioned away from print. They divested and reinvested in assets to be more established in the packaging space. Previous acquisitions have worked well. You have to have patience with it. The dividend is safe for the time being. They took on a lot of debt when they made the acquisition. It's early and it will take time.

They've been beaten up after a big U.S. acquisition where they took over $1 billion in debt which the market did not like. TCL, though, has done successful acquisitions over the years. They were a printing business, but then sold those assets and smartly reinvested in labels. It takes time for the market to digest their large acqusition, but the U.S. business is similar to TCL's business here, so TCL knows that space well. He's confident it will work. Trading at 8x P/E.

(A Top Pick Aug 15/17, Down 5%) It has done really well for several years now, transitioning from the printing space to the packaging space. Most recently they missed on their numbers and it spooked the markets – be patent. It is still really cheap and the dividend is strong. This is a great entry point.

It is one he does not own. He has looked at it in detail. On a PE and multiple basis it trades cheap and always has done. Over the long term you will be able to see them pay a few extra pennies with dividend increases. The multiple looks attractive but don't catch the falling knife. Look for a recovery in targets.

This was historically a printing company that bought up other companies and cut costs by consolidating the business. That game is over now because the newspaper industry has shrunk. They then entered the packaging industries, which was exciting because this put a company with cost-cutting expertise into an industry that still has growth opportunities. They did well for a couple of quarters and then got hit with bad results that have shaken confidence. He thinks it is normal for a few tough quarters after a large acquisition. The price has dropped quite a bit, and it might be a buying opportunity, but he suggests waiting a bit longer to see how well the business is progressing. It would be better to pay another buck or two if the company is doing well than buying now and watching it drop $4 or $5 more if the transition is troubled. He thinks the company is well run and will eventually turn around and be a good investment, but the stock might have to drop farther before that happens. He is looking at this stock to enter, himself. He wants to buy it, but not yet.

Short term they announced some disappointing results. They have been trying to diversify and are getting into packaging. Their strategy makes sense over time. This should be temporary in nature and this is an opportunity to buy some here.

They were a paper packaging business that is dying. His hat is off to the team for transitioning it to packaging labels. They have slowly sold off assets from the paper business. He continues to like it although it is not as cheap as it was. It is still fairly cheap, however, at 11 times earnings. Take only a half position to take the rest on weakness. That is what he is doing.

A big turnaround story that continues to grow by acquisition. In a competitive space, but they're innovative and they create synergies from their purchases. They've gone from printing to packaging which will grow. (Analysts' price target: $31.94)

Over the last few years they have been picking away at small acquisitions. They were building an expertise in the industry. Then they made a large acquisition and vaulted themselves into the top ten in North America in their space. It is still being priced as a printing company. He does not think they are done with this transition and are not getting recognized by the market. (Analysts’ target: $30.88).

They have done a great job of transitioning away from paper into packaging, which has been insulated from a transition to a digital world. They made some good acquisitions. It is trading at 11 times only because it was cheaper a year ago.

He once owned it. Printing, a major segment of theirs, is in secular decline, but they've seen good growth in packaging after making an acquisition. Trades at a low multiple. It's a stock worth looking at. Could be value here.

He has a model price of $45.65 – 70% above current levels. This never trades where the fundamental value of the company is. It is near the upper range of historical value. He would look elsewhere.

It has become more topical recently. They are in commercial print and are a consolidator. They are good at generating cash flow from what has been a declining business. 8 times PE. They are using the cash flow wisely to acquire. About 48% of their business is packaging. Their equity issue was not completely sold, but has since it was issued. (Analysts’ target: $30.20).