Shaw Communication (B)

They're now spending a lot to grow their wireless business and fighting off Telus. The telecoms are good investments now; they're defensive names.More people are at home using bandwidth, though gaining new phone users may be limited. You're paid a 5% dividend. You can but now. It's a duopoly out west, so little competition. He owns its peers instead.

A takeover coming? Managed well. He prefers Bell and Telus. Shaw is betting big on wireless. Telus and Shaw corner the western Canadian market, so it's not competitive. A safe business. COVID will impact wireless sales, though. There have been takeover rumours for a long time, so buy this for the wireless growth, instead. A very safe stock with a safe dividend. This hasn't moved much over time.

T-T, BCE-T, RCI.B-T, SJR.B-T. Telecom is the sector he is the most bullish on. It's his biggest position. It is the sector that is the most resilient. Online traffic has increased dramatically. T-T would not be the top of his telecom list. He would prefer SJR.B-T, BCE-T, and RCI.B-T because of their media businesses.

Shaw missed their last earnings due to increased competition in wireless (Shaw re-entered last year) with lower data packages. She owns few telcos, though they pay an attractive dividend. She prefers BCE who are national and pay a good, rising dividend.

Within the telcom group, he would prefer BCE. Shaw has been broadening their foot print trying to be more competitive. It is going through a transformation, so he would avoid this for now. Yield 4.4%

Worries about telcos--lots of talk in the election about high telco rates. Canadians still pay a lot. He's tiptoeing away from telcos which may have regulations and come off.

He prefers Rogers and BCE. Telus' valuation is very good and moves in line with its peers. All the cable/telcos are a stable business with reasonable growth. But Shaw trades at 17x earnings and 8x EBITDA, so he prefers the others.

In the wireless space it is very CAP-X heavy. With 5-G coming it is a very expensive proposition. He would be shy to own it right now. It has gone sideways for a couple of years.

He likes how the company has been expanding their wireless business. Their controlling interest in Corus Entertainment is creating major headwinds – who would look to buy it? In the long term, it will be a decent investment, but he sees better alternatives.

It brought Freedom Mobile (WIND). What they are doing with their mobile strategy is what the market needed. One day he sees RCI.B-T coming together with SJR.B-T and that would be synergetic.

Shaw will get a good chunk of this first 5 G spectrum. Chorus is up for sale. Shaw has a fair amount of debt and will benefit from the sale. Once spectrum has been allocated it will benefit Shaw and Rogers. There are certain parts of the country where each company does not have a foot print. It would be nice to see them come to an agreement. Shaw pays a 4% monthly yield. Last quarter it had pretty good subscriber growth.