Consumer stocks such as Canada Goose, and Saputo, as well as many industrial and financial companies are reporting their earnings this week. Notable among them is the Brookfield names, BPY.UN-T and BEP.UN-T.
Here are the companies with earning reports to watch.
Andrew Peller (ADW.A-T) Feb 04
(A Top Pick Nov 18/18, Down 8%) They made acquisitions and markets got ahead of themselves. Now things have settled down. It is a nice stable company and the dividends should increase over time. Stay with it.
Has had a huge run and is not sure he would be courageous enough to get onboard at this point. Management has done a remarkable job of building this. He would look for a little lower entry point.
He owned the stock at one point. It is a cash cow. It is mostly a marketing company. The question has always been if the parent will privatize the company. They pay a good dividend but there is very little growth. Hang on if you are in it for the long term.
He doesn’t know the seasonality on this, but the technicals show that it has been in an upward trend for quite a period of time. During the last little while, it has been in a trading range between around $19 and $22. It is not unusual for a lot of stocks in the consumer staples…
Pizza is a challenging space and BPF doesn't execute as well as, say, McDonald's. BPF's 3-year chart shows it's still in a downtrend. The current stock bounce is an opportunity to sell, not buy.
Run its course. Downgraded it. Got ahead of itself. Not a big fan of consumer retailers. Shy away and wait, or look at other sectors.
Saputo Inc. (SAP-T) Feb 07
Trades in a tight band of consolidation around $40. It's a defensive stock. Wait till summertime seasonality when it may do well. Wait till $42 before considering it; it could breakout above that level.
They bought Newfoundland Capital. It is a radio operator now. Debt is high but they keep increasing their dividend. People see them as background music in a retail environment. It is an okay stock and he would like it a lot better with a lot less debt.
Yellow Media Inc (Y-T) Feb 07
(A Top Pick May 29/18, Up 13%)Yellow Pages Convertible 8% 2022 Bond - Play on deleveraging. Their free cash flow is exploding. They accelerated paying debt in the past quarter cutting costs.
(A Top Pick Jul 27/17, Down 6%) Volatile. It's come down a lot, but there's a lot of upside ahead. Well-managed. They can make accretive acqusitions. Their problems integrating some businesses are behind them and they now have a strong runway ahead.
Finning Int (FTT-T) Feb 05
A contrarian pick. If there's a recovery in manufacturing, you buy industrials like this. It's growing earnings 14% annually in the next few years mostly from cost-cutting. Trades at 12x earnings. Pays a safe 3.2% dividend, and they will buyback stock. This will grow despite a weak macro, even better in a strong macro. (Analysts’…
Westjet Airlines (WJA-T) Feb 05
It’s under review by the government whether the takeover will take place. You’re dealing with regulatory uncertainty right now. If you bought it before the takeover, unless you’re in tune with what will happen, he wouldn’t own the stock any longer. The price is fair.
ATS Automation (ATA-T) Feb 06
(A Top Pick Feb 27/19, Down 6%) They're hurt by weakening European growth. He's not super-worried though, but has trimmed his position. He's bullish about the automation sector in general, so he's staying in ATS. Automation will be key in the future. Expect a few bumpy quarters.
(A Top Pick Jan 18/19, Up 31%) This plays offence and defence, and was well-priced at the time. Still growing AFFO at 15% compounded annually. Despite great growth, still reasonable at 15x price to AFFO. You can still own this.
Toromont Industries (TIH-T) Feb 06
A heavy equipment dealer. He is looking for a cyclical recovery next year. They are a distributor for Caterpillar and other heavy equipment. Really good operators. Yield 1.58% (Analysts’ price target is $69.50)
(A Top Pick Nov 28/18, Up 16%) Genworth and Westinghouse have been great investments for them. They're great capital allocators. Still likes it at current prices.
Heroux-Devtek Inc. (HRX-T) Feb 08
They execute brilliantly, integrating very well. They produce landing gear for airplanes. They finished absorbing a major acquisition of a Spanish company which got them into Airbus. They also work on the Boeing 777x. The capex and acquisition spend is now done, so they can pay down debt or buy more companies. HRX is one…
First Cobalt (FCC-X) Feb 04
Cobalt is attractive but this is not a cheap producer, because they're in Canada and not Russia or Congo.
Domtar Corp. (UFS-T) Feb 05
This has been quite erratic and trading in quite a wide range. He’s been seeing contraction in breadth in forest companies, so is a little cautious on this area. If he had to focus in one space, it would be on lumber which looks attractive. You can use a basket of them through the ETF…
Canfor Corp (CFP-T) Feb 06
Jim Pattison's bid to go private has ended. Buy on weakness; offers solid, long-term value. Pattison sees value. But be patient with this one. With the rejection, expect overreaction to the downside. Buy around $11-12.
Canfor Pulp Products (CFX-T) Feb 06
Seasonally, forest product stocks have a history of reaching a peak around the 3rd week in April. This year is no different. Probably an opportunity to take some money off table.
Nutrien Ltd. (NTR-T) Feb 06
It comes down to demand from China. The price does not reflect the story, which worries him. It's in a down channel. He needs to see 3-6 months of base-building to convince him to step in. The street is too optimistic about NTR.
Interfor Corp (IFP-T) Feb 07
Forestry has been a declining business his entire career. They are very cyclical so you can make a lot of money on recovery. He thinks the US housing market is picking up and so there will be increased demand for lumber. (Analysts’ price target is $18.14)
Russel Metals (RUS-T) Feb 07
It has cut its dividend in previous cycles. They got hit in trade wars. The dividend is good and the cash flow is and good and he thinks it is a well managed company, but you have to commit to an expanding economy to own a lot.
Goldmoney Inc (XAU-T) Feb 04
He rarely talks about Gold. He thinks it is a strong sector bet. It is been out of favor for so long that mines have closed, productions have closed, mergers and acquisitions happened. Central Banks are now massive buyers of Gold. they want to get out of the US dollar. The Fed is not raising…
BSM Technologies (GPS-T) Feb 05
Uses their GPS system to figure out where trains are, and to more accurately schedule trains and service vehicles for people working on the rails. Reported on Aug 14 and earnings were down 10%. That was against a 32% increase in sales. In the coming quarter, earnings are expected to be down 75% year-over-year. Great…
Vecima Networks Inc. (VCM-T) Feb 07
It is a well run company. He got out of it. They paid out a lot of special dividends and the stock did well, but he got out because most of the catalysts are out of it.
They had a cyber theft – 9 Million out of there bank but insurance covered it. He likes it. It is speculative and is a roll up strategy.
SQI Diagnostics Inc. (SQD-X) Feb 04
They make life easier for large diagnostic test companies. It automates the testing process. They did a final financing. They've been working on this technology for 5 years.
United Corps. (UNC-T) Feb 04
He was a shareholder when they announced their dividend cut last year. They had a hiccup when they tried to re-purpose storage tanks. The dividend is more sustainable than it was before. With the transition underway they have converted a number of storage terminals. Their aviation services business is a much more stable business and…
Intact Financial (IFC-T) Feb 05
(A Top Pick Oct 26/18, Up 37%) It was defensive at the time. Markets were falling. Even at these levels, it's trading at 15x and growing at 15%. On a price to growth basis, still a good opportunity in a fragmented market.
Owned it a few years ago and cut his losses. Now, cut your losses. This business is struggling as an asset manager, specifically to retain and attract new clients. Also, their key managers, including the CEO, have been leaving. They won't generate much in performance fees, which has been an attraction for investors in the…
No question this is deep value. Their NAV is likely $27-28US (for the US BPY stock). But it'd been deep value for many years, and he doesn't see a catalyst to service that value. Some shareholders have lost patience. They're challenged because they own a lot of high-end malls. Some questioned them buying GGP Inc.…
Great West Lifeco (GWO-T) Feb 07
Likes it a lot and recommended it a few weeks ago as yields have been bottoming and flattening out. Yields will rise long-term, he predict, which will benefit lifecos like this. GWO broke its downtrend at end-2018, rose, hit a second bottom (a double-bottom) and is now accelerating higher.
CI Financial Corp (CIX-T) Feb 08
A big Canadian mutual fund company. A go-go stock for many years and a fast-grower, but is now under pressure like the sector. Still produces a lot of fresh cash flow. It's in trading range of $18-23. Pays a nice dividend.
IGM Financial Inc. (IGM-T) Feb 08
Suncor Energy Inc (SU-T) Feb 05
Oil is a difficult space, but SU is building a base around $40. Strategy: buy the strongest stock in a struggling sector, which is SU. SU has the balance sheet to pick up cheap assets.
Generally not a fan of the Chinese inter-listed companies. He has a Short position in this one. There are better places to be.
Mullen Group Ltd (MTL-T) Feb 06
Convertible bonds with a 5.75% coupon They own a great base of real estate. The debt issue is a small piece. The bond is well-covered. MTL.DV-T. You get a 6-year option on the stock within the bond, with a $14 convert price. If oil recovers, these bonds will convert into equity. Until then, collect then.…
A conglomerate and he isn’t a big fan of this model. A well-known catalyst investor has just purchased about 19%. May sell of some weaker units.
MEG Energy Corp (MEG-T) Feb 07
They are the number one target in Canada for M&A. There are a list of potential acquires where it makes a lot of sense. They have enormous tax pools. It is trading at a 29% free cash flow yield. They are over levered. He sees a 25% upside from here.
Arc Resources Ltd (ARX-T) Feb 08
A good entry now? The company likes the dividend model. The balance sheet is in good shape - $840 million debt vs $3.5 billion in equity. Production is 67% liquids. They expect production growth in Q4 2020. It is on his watch list. He thinks the dividend is secure. Yield 8.5%
Cameco Corporation (CCO-T) Feb 08
The only thing to look at is uranium prices. Until prices take off, stay on the sidelines. If prices take off, first go-to is the Uranium Participation Corp. Then come back to Cameco after that. Need a break above $6 before he'd be interested.
Just Energy Group (JE-T) Feb 06
They sell energy contracts. They have under gone several management changes over the years. He is not a great fan of this business model.
Valener Inc. (VNR-T) Feb 08
A lot of success is tied to Gaz Metro in Québec, but they also have some wind farms that have recently come online in the last year or 2, and giving good returns to the company. Recent earnings were solid and they raised the dividend by 3.7%, and plan to raise it 4% next year.…
BCE Inc. (BCE-T) Feb 07
vs. Verizon Verizon is a good US income stock. Own this in a non-registered account to avoid the tax hit. Better to own BCE, because it won't be taxed in a sheltered account.
Use this list wisely to identify buying opportunities.
Happy trading !!!