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

Extremely well managed. They are great allocators of capital. They are migrating the company out of printing and into packaging. They have to make some acquisitions. The multiples in packaging are expensive. It’s not clear whether they can grow it well. He suggests waiting until it’s clear how well they are doing with the packaging business before buying the stock.

One of the best-managed Canadian companies over 15-20 years. Have downsized well. They know their business, and doesn't see anything stopping them. The stock is close to a new high.

Given the value this is trading at, he doesn't view it as risky. You are not overpaying, and you are pricing in some of that transition risk which is there. It’s trading at around 9X PE with a yield of about 3.25%. A very good valuation and you are getting paid a healthy dividend. Historically, this has been a printing focused business, which is dying, but the company has done an exceptional job of transitioning to the food labelling and labelling as a whole. He is still buying for new clients.

They are the last printer standing. The industry has fallen on hard times. You don’t get as much paper in phone books, fliers and news papers any more. It is a no growth business. Yet this company has managed to persist as their competitors have gone away. It does not mean, however, that they have a great future going for them.

This looks good. The only thing that worries him is that the volume is a little slow. If there is some kind of earnings coming out or something not working out, it could take it down. There is very little volume and it is at all-time highs.

(A Top Pick Oct 20/17. Down 8%.) He still likes this. It’s in the printing business, printing flyers for different retailers. They also print the Globe and Mail and the Toronto Star. Investing in this thesis is called "last man standing". Everybody is gone and they have the lion's share of the market. They are also into online packaging. Currently the stock is at the bottom of an up channel, and the stock has been quite healthy. If the stock goes below $22, he will probably Sell.

The company is transforming itself from traditional printing like the Global and Mail, getting into socialized packaging. He thinks it is a decent strategy. The analyst community in the US does not know how to value this company. He would add on any pull back.

(A Top Pick March 8/17. Up 25%.) In the printing business, its “last man standing”. They have pretty good customers.

For income and growth? An odd one in the sense that it gives you paper, printing, advertising, flyers and everything else. They’ve done an excellent job at doing some dispositions, and acquiring digitally to diversify. Statistically cheap with a good dividend. It has now come to a level, unless they do something further on the acquisition side, where it is fairly fully valued. It would be a decent hold and relatively safe in a pullback, as it is not highly valued nor a big grower. He wouldn’t be wild about this.

He likes both the fundamental and technical aspects. Chart shows staircase like blocks, so the company is definitely doing well. This is in printing which seems like a bad space, but this is one that he calls “the last man standing”. It is trading at a big discount to the market. It does printing for the Globe and Mail, Toronto Star, San Francisco Chronicle, and flyers for Sobey’s, Metro, Shoppers Drug Mart, etc. Another interesting part is that about 15%, and growing, is their revenue which comes from packaging. Strong balance sheet and good management. Dividend yield of 3%. (Analysts’ price target is $26.75.)

He has never owned it but has followed it. They are transitioning out of a tough sector. They have done a great job in a tough space. The stock has performed tremendously well. It remains to be seen if they can become a force in packaging. He would certainly hold onto it if he owned it. He owns two others.

(Top Pick Aug 17/16, Up 39.14%) They are the leader and can manage costs even though print is dying. The weaker players are exiting. He sold too early. They are getting into packaging and are committed to growing their dividend as well as investing in the business. They dealt with the decline of their legacy business very well.

This checks all the boxes. It is cheap on a P/E, has a great yield, gets the Canadian tax credit on the yield, and have done a great job in transitioning from being a media company, to focusing on print and packaging. In the last few years, it has really focused on acquiring key acquisitions in printing and packaging. Dividend yield of 3.2%. (Analysts’ price target is $25.)

Looking back 9 years, this is at a high. Using earnings estimates, he has a model price of $42.67, a 65% upside. The stock usually comes back to $16.70 before it has another run.

(A Top Pick May 4/16. Up 35%.) Printing is a declining business, but this is the largest in Canada. They do outsourcing, flyers and some large newspapers. It reached his target, so he sold his holdings. He expects them to make more acquisitions in the packaging space. Dividend yield of 3.4%.