24 Stock Top Picks and 3 ETF (Jan 11-17)

ETF for US exposure? Underperformed the last couple of years. Low volatility was all the rage when we had some corrections. We might have some more corrective action in US stocks, Warren Buffett has a massive cash hoard, Stanley Druckenmiller's calling for 0% growth in US stocks for 10 years. Volatility is tempered with ZLU…

He doesn't buy low-vols, because they drag on performance.

(A Top Pick Jul 21/23, Up 13%) Don't be too over-exposed to any one sector, though it's OK to tilt your portfolio toward a preference. The small-cap universe hasn't yet caught up to the large caps to the degree he expected. Could see a small boost later in the year. Worse places to be than…

It has come way down with the money laundering scandal. It decided what it will pay but the stock dropped again so it has been doubly punished. Now trading below 10X - the valuation and dividend are OK. Has a new CEO and will manage the U.S. situation OK so could be fine over time.…

Laggard compared to peers. Partial investment in KEY in the US, with market expectations that investment will be increased over time to expand footprint. Net interest income would actually increase with falling rates. Loves the valuation and shift in strategy. Yield is 5.6%. (Analysts’ price target is $70.73)

They turned around to regain investor confidence, but he's cautious buying it now. Is reasonably valued. Tricky. Pleased with it, but the company hasn't changed fundamentally.

Don't buy. Doesn't like insurance. 

Once owned this. But this will be stuck in a highly competitive space.

He has been investing in this for almost three years now. They received Health Canada approval for a new brain stimulation medical device last fall. They are awaiting FDA approval in the US. It magnifies the result of physio-therapy for the brain and the technology is safe. It is a billion dollar business if it…

With a market cap of over $60 billion it is the largest player in the medical disposables sector with 25% market share. Growth stalled for two years during COVID but is accelerating now. Its profits are solid so there is lots of room for acquisitions and a start to buying back shares. Trades at 17X…

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research DHR is expensive at 28x forward earnings and it has not been able to fully recover to its all-time highs in 2021 when it traded above $330. DHR has been trading quite choppily since. It is flat year-to-date but up 11% over the last year.…

They own a series of food distribution businesses. It appears they are not making any money from them. It appears to be a scale problem.

The US consumer remains a risk despite Target's strong performance today and their quarter. The lower-end consumer is challenged by inflation and are looking for discount sellers like TJX. Their margin guidance is 31%, which is phenomenal for retail. Target's number is encouraging though. He will look at them. TJX beat earnings and raised guidance.

Its Capex is exceeding its cash flow but there is no net debt and the dividend is secure. In general the cost of producing an ounce of gold is way up over the last 20 years. The strong U.S. dollar has put downward pressure on gold.

(A Top Pick Jan 24/23, Down 10%) Cyclical business that hasn't performed well.Seasonality affecting share price (May-October).Expecting better performance of shares.Sign that economy is soft.

Close to a bottom, but too early still before an upturn. Swing factor for earnings will be commodity price for potash, and he doesn't see this coming back to sustained supply/demand balance in the medium term. BHP's new production will add ~10% more supply, keeping prices under pressure.

To manage risk, he sets up his portfolios starting with the biggest, which is FNV. More diversified than OR. He also owns OSK proper.

Owns shares in company. Has done well the past year. Expecting further upside going forward. Dividend is expected sometime soon. Subcontracting business from Air Canada very good for reliable revenues. Price multiple not as high as it should be. 

(A Top Pick Jun 20/23, Down 12%) As a call centre it is an outsourcer of IT services. It has been coming back from October onwards. Regarding AI concerns it has the balance sheet and income to train machine algorithms.

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. The quarter was a big miss; EPS $1.21 down from $1.61 the prior year and estimates of $1.54. Revenue $189.8M was higher than the prior year $188.6M but missed estimates of $203.4M. For 2023, guidance was $5.28 to $5.64 per share (est $5.44), Revenue guidance $878M to…

They're in northeast BC where Tourmaline is consolidating land and assets, near LXE. So, LXE will become topical. LXE has reached an inflection point after acquiring a lot of land and pushed the Montney play to the northeast. Now, they need a lot of capital to move to full development. They're talking to potential buyers,…

Does not own shares - prefers Enbridge. However, company is overall a great business. Recent Southbow spin out has left company as a pure gas company. Very good assets - hard to replicate. 

Owns shares, and has suffered share price depreciation. Europe pricing very hard on business. Company is going to have to re-evaluate Europe assets. Better options in the energy sector for investors. 

Competitive industry; harder to grow revenue, especially when costs are escalating. He owns Telus.

Had owned this a long time. He still likes their assets, offshore in Europe and Taiwan, but the market dislikes the latter. Is an attractive take-out candidate. They can divest assets in Europe or Colombia. Bad managers before, but now good, but their assets matter more and they are good. Collect the over 5% dividend…

Likes it long term, but is enduring issues now. 

(A Top Pick Oct 06/23, Up 20%) Is tied to interest rates. Long rates have rebounded lately. A very well-managed company with 51 straight years of raising their dividend. It will remain a core position.