Aurora Cannabis, Canopy and More Earnings this Week (Feb 11-15)

Canopy Growth (WEED-T) vs Aurora Cannabis (ACB-T). The battle of the titans. Both companies do good things. He favors Canopy as it has a lower risk diversified growth strategy in 12 different facilities. He also likes the deal with Constellation for further diversification. Aurora is expected to grow with the expansion of the new facility…

They just released earnings this week and they have been turning their business around -- increasing margins and growing organically. Management owns about 18% of the shares and it trades at 5 times earnings. He thinks it could trade at twice that level. They are involved in patient home monitoring. Yield 0% (Analysts’ price target…

Does rapid testing for clinical diagnostics. Has held in quite well. Going through an approval process and it looks like things will be okay. Leveraged earnings are pretty big. Likes the company but is not actively buying it.

This is another company in the cannabis space. This is not a cannabis producer, it is a company that adds value in that space. They are mapping cannabinoids, looking for different formulations to treat different diseases.It is highly speculative, but he thinks there is opportunity for this type of company. He likes the management. In…

For years NEPT was in partnerships where they were extracting Omega-3 oils from krill oil and selling that to consumers. Now they're taking that extraction technology and applying it to the cannabis oil market. He's in a wait-and-see spots. The fundamentals don't back the move up in the stock. He has a small short on…

He's avoided the weed space, because cannabis producers--being commodity producers--have very low profit margins. This is a gold rush now. Some companies will survive, but some won't. There are legalization challenges, especially about edibles. Canopy will survive, because Constellatioon Brands is its major backer, but doubts it can maintain its stock levels. Right now, cannabis…

He is a big fan of the real estate. Took a big position. It is a one client operation - Canadian Tire. Now they are looking at neighbouring properties with shops that are where they are because Canadian Tire is next door and people go there.

Making changes to be able to invest more in foreign stocks. Wait to see how they do.

Buying out of favour businesses that they feel have an intrinsic value. An interesting portfolio play that has broadened them beyond the original trucking business. Good management.

Owns a little. Canadian REITs have bounced off the bottom during the last couple of months, in part because of higher oil prices and higher commodity prices. That has benefited the entire sector. This operates in an area where rents are not regulated.

(A Top Pick Nov 7/13. Up 26.76%.) Have some great assets in the Edmonton/Calgary area. These are rental properties, so there is lots of room to increase rents as it is a high growth area of the country. It will continue to see good growth and good increase in rents.

He favours this REIT. Doesn’t think it is going to cause anyone to jump out of their coffin. You might be fairly bored with it, but it is safe. He immensely favours Morguard (MRC-T) itself.

Not a lot of detail regarding cannabis retail market yet. May be an opportunity for retail rentals and possibly good for them. Too early to say what impact this may have for Riocan.

He loves this one. The stock has really taken a hammering. It is a better company today, but is the same price as two years ago. When a really good company gets beaten up, it is a good time to add to the shares. There could be one or two more quarters of stress. Buy…

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The anchor tenants, in a large majority of their properties is Loblaws. Where he might be a little more hesitant in a real estate investment trust that has mall-based retailers, it is quite unlikely that grocery shopping will have the same problems. This would be one of the safer REITs. He is quite constructive on…

One of the world’s most important real estate vendors. You just have this amazing shaving of the stock that provides opportunity. They have diversified currencies across the world. Just completed an acquisition in the Netherlands. It is a new issue but well held.

Retail focused, but it owns a lot of Yorkville and assets in areas of high income. They came out with a perfect quarter, raised guidance, and the stock dropped 5%, so he was buying aggressively that day. This is a rare opportunity to buy a very high quality high end retail at a very reasonable…

He got concerned with the lawsuit, sold and bought SLF instead, but there's nothing wrong with MFC. He has shifted away from insurance to REITs, because the latter will benefit when interest rates are cut. You will do fine with MFC in the long term. Pay a 4.3% dividend, so you're paid to wait. This…

Excellent liquidity situation. Payout ratio is sustainable. Was a discount for management that was probably warranted but is now overdone. Have done very well over the last couple of years. Would like to buy it in the $8 range. 7.5% distribution is very safe.

He thinks management has done a great job. Walmart represents about 22% of their revenues. They have a great new development just north of Toronto. Very good managers with a 6% yield. They have room to develop existing properties in areas where real estate values have increased.

(A Top Pick Dec 15/18, Down 5%) They are expanding insurance operations in Asia. They have excess capital of $2.3 billion. They could do an acquisition or buy back shares. Extremely well run so he continues to like it and hold it.

This has been performing super strong with the markets being on a roll. Thinks this continues to do fairly well. It ranks really well in his process both technically and fundamentally. If he didn’t own it, he would certainly look at it.

You can own any Brookfield stock and BAM is at the top. Smart managers. With this you're buying the international economy, not just Canada. But instead of buying BAM, look at its AGM notes to see what subsidiary they talk up the most--that's the one they feel is most undervalued. This year, it's BPY (Brookfield…

Financial investments can do well in a raising interest rate environment. He likes Pram Watsa. He would look closely at the valuation. He likes the theme.

An ETF that holds Indian companies. There are 2 ways to play India. You can buy an ETF or you can go in and buy a particular stock. You may be buying things that the index doesn’t show, but that this company has access to.

The company has been frustrating because it pays a good dividend but it has had a slow decline in stock price. Management at the right is similarly concerned about the stock price and is adjusting its portfolio--getting out of US retail and into US multifamily. In Canada it is a very high-quality commercial real estate…

(Market Call Minute) Fast growing. Business looks good. He is just starting to follow it.

The most expensive stock on the comp table, and so that is the issue. Analysts say it's fully priced, despite the great quarter. Hard to start pushing the multiple higher. She wouldn't buy it here, but she doesn't know if she'd be selling it either.

One of the old greats in the liquor world. They distill certain things and have marketing rights to others. They do things overseas. Pays special dividends in January.

Will be a takeover.

Holding in above major support level. Doesn't mind nibbling at it here. Testing a support level here. But we have a series of lower highs. If it could break the downtrend, he'd add more. It's cyclical, going sideways. Not too excited about this stock.

Convertible 8% 2022 Bonds - They always have owned the convertible not the equity. It is a restructuring story. They think it is better to be in the convertible because they have a good yield and it is ahead of the equity holder.

They have many more stores in the west, particularly Alberta, so they were hurt in the oil collapse. Same-store sales suffered. But they are on the mend now. They introduced healthy food a while ago, so that growth has now slowed down. They are opening stores in Ontario which will lead to some growth. They…

It had a very good run and had a bit of a dip here. The worst for Canada has been seen from an energy price perspective. The retail area is economically sensitive and hot hit.

This is one of the Canadian retailers that has done fairly well. Everybody is impacted by AMZN-Q but CTC-T less so. The difficulty is that that he does not see growth beyond 2-3%. He needs 10%. He would not say to sell it if you are into it.

Has always been skeptical about the D-Box technology. They have had some success in China of late, which is why he thinks the stock has popped.

A developer brand in organic food space. Recently broke into Loblaw’s (L-T) and some other food chains. An acquisition driven story. They have quite strong organic growth of 20%+ a year, but will continue to acquire brands, develop them, and expand them from within. It is everything from baby food to pet food to drinks.…

There are always big expectations for cash flow coming from grains, and then it never actually comes. It looks like they are on the up and up now, but be careful because they could have some earnings misses as well. He wouldn’t own this until they could show that they could generate cash flows and…

Lumber is something he doesn’t want to be playing in right now. He would prefer OSB through Norbord (OSB-T), which hasn’t really been impacted by Chinese dumping, and benefits from a low Cdn$.

Chart is showing a trend change. Yielding 11% so this makes him nervous.

He doesn’t know their financials. The company is trying to revive a historic mining area in Ontario. This type of work takes a lot of money and might require First Cobalt to issue more shares, driving down the price. Alternatively, they might take on a lot of debt, which carries its own problems. Cobalt is…

Has reduced his position but if he didn’t own he would be a Buyer. Trading at one of the cheapest valuations.

Nearly 4 Million oz in a deposit in Brazil. Continuity is very good in a cross a section, a long section and in depth. Going to be a nice deposit. A mid to major company should be buying it. Should be producing a bankable feasibility study in Q1 next year.

Fiji is an interesting place. They have raised $85 Million last year when it was tough. If they get this thing going it will build up confidence. They are putting a relatively small scale gold mine into production while doing exploration. They should eventually get bought out.

Looking at this right now. An absolutely tremendous payout. He doesn’t know the company well enough to Buy into it, but he loves dividends. This company is giving money back all the time. 9% dividend yield.

Just announced a 70% increase in their mineral reserves. 7.7 million ounces of gold and 3.6 billion of copper. Extended the Prosperity mine life from 20 years to 33 years. It will be the largest gold/copper reserve project in Canada. Expect they will get a partner.

It peaked in early June and fell to $80, breaking a strong 19-month trend. The early-August low fell along with commodoties as a whole. It'll likely continue to fall.

Range-bound and had a nice run. Looks like it's falling back to $2.

It benefits from the increased housing starts. It is illiquid. 5% dividend.

Sentiment that the commodity has to turn around, it has been a very long negative period for the gold stocks. Gold stocks are not a great hedge to stock market correction or recession. The company is not profitable and are paying a dividend. They need higher prices for the dividend to survive. He believes they…

Industrials have been slammed and CHE just settled a lawsuit, so this will be punished until the final settlement. Balance sheet is merely okay. But this is cheap now. Safe, high dividend. They could sell assets to help their balance sheet. It's messy but you can buy it at these levels.

It has a distinct downward trend. Seasonally it goes up in February and again in July. Wait until it shows a base pattern before making a major commitment. Be patient. It is not there yet.

A smart group of guys. They are putting a fair bit of work into proving their concept is right. They seem to be backing up their thesis. It is looking like it is working so far.

Over the course of 2 years, this had a double bottom, which is a good sign. Chart shows a big rounding bottom, which signifies accumulation. The 1st place you would see resistance would be at around $2. There is a significant Moving Average at around $1.78. It may pause here to digest what has happened.…

There were a couple of subtle things went on with the trust conversion which discouraged a lot of investors. An illiquid stock. Most of their exposure is in B.C. and Alberta where housing is still very strong. Thinks we're at the peak of a cycle so don't have it as a long term hold.

Way too pricey for him. Now, you can buy only stocks that are way, way cheap, because the market has gone up so much.

He would call this a Hold given the activity in the Québec Labrador trough. Have 2 excellent properties with a billion punt potential of iron ore in that trough. The problem is there is an excess supply of iron ore in the market.

It has risen to the forefront to be a go to. They are global. Their primary exposure is to copper and is a leveraged way to play a recovery in copper. Keep in mind it is leveraged so it will go the other way just as far if copper drops.

The price of gold is in a bear market. It looks like it is bottoming out. Gold stocks have only gone down 7% while gold had gone down 20%. G-T has the opportunity for a turnaround. They own 10 years of growth prospects going into the next decade. They are a low cost producer. This…

The good news is that the materials space has been down a lot in the last 3 months. This company has been going sideways. He takes that as on-balance strength in the name. His model price is $8.87, a 21% increase. If we get everything going positively, big earnings and everybody back into the mining…

Technically this is in an upward trend, outperforming the Canadian market and very close to breaking out which would be a confirmation of an upward trend. Also, trading above its 20 day moving average. However, there is some resistance at around $8.30 which doesn’t create too much concern. Historically, the stock doesn’t do very well…

Great investment. 4.5% yield. Scratch lottery tickets globally. Management team owns 75% of stock. Record quarter last quarter, expects record year. Half decent yield. Somewhat illiquid because of management ownership. He wants to meet with management before buying because no analyst owns it.

Silver is riding coat tails of gold. Thinks of gold and silver in the same vain. In last year, silver moved more than gold. He is bullish on both metals. It is over bought, but every gold stock is.

(Market Call Minute.) He loves this. A great solid business that you could own for the next 20 years, but it won’t be around for that long.

Has a $5.50 target and has been watching it. He likes this--it has good upside, low cost production and reserves in the ground in good locations. He likes the CEO. Below $4 is a good entry point.

They now have over $1 billion in terms of the value of the gold on hand. You are buying physical gold that this company is storing for you. They are also growing globally. Thinks the growth rate is going to be quite fast. He is interested both in the stock and what they are doing.

Hardware/software for telecommunications industry. Has about $2.5 million in cash and generates cash on a quarterly basis. Expecting continued growth for them. Clean balance sheet.

Great Canadian company. It has always looked way to expensive trading over 200 times earnings. He can't justify the valuations.

Solid stock with a good dividend? He likes Computer Modeling Group (CMG-T) which does modeling for oil/gas exploration. Ways about 3% dividend but also has some growth.

At 23 times earnings, it is still good value. There is really no great competitor. They have a mountain of cash and management is well invested. They do great acquisitions, are cost conscious, and he has great confidence in their strategy. Yield 0.45% (Analysts’ price target is $1163.67)

No debt. Growing.

It has had trouble holding onto gains of late last year. He has a small short on this one. Valuation is not great. It is quite a volatile stock.

Just IPO'd a couple of months ago. Analysts have not yet put out reports. An interesting business model and feels they are going to be able to Blog the latest portion of their business but so far hasn't gotten traction.

Hanfeng Evergreen (HF-T), Hanwei Energy (HE-T) and Migao (MGO-T) are interesting plays into China. Have been crushed but give direct exposure to what he expects will be the strongest currency over the next 25 years. You are buying them with multiples of earnings (not cash flows) that are unbelievably low. Wants to look at these…

(A Top Pick Jan 20/15. Down 12.92%.) Down because of energy prices, but also companies are drilling less on their lands. Also, did a large asset swap with Canadian Natural Resources (CNQ-T) in exchange for shares, and because of financial concerns of CNQ, they may want to be selling some of those shares. The Short…

Seeing strong improvement now. Since 2017, it's been in a strong downtrend, but has recently improved. He likes it. Been a good rally in the past month, and he sees further upside for this stock and natural gas in general.

(A Top Pick October 3/17 Up 1%) He did sell this back in late-May when it became apparent a refinery shutdown was going to cause differentials to blow out in the fall. Still a good company, but having cut the dividend to less than 2%, there are better options now.

Just did a $65 million financing and the core NAV is about $1-$1.50, so there is a huge amount of froth built on oil shale potential they are promoting. A lot of downside risk and a low probability of success.

The oil side of ECA-T? The oil price has been creeping up, but oil stocks haven't been rising with it. The reason is that a fear of recession and a drop in oil demand. Now, oil is seasonal and has enjoyed a huge bounce since the start of 2019. Again, oil stocks haven't rallied along…

He would be looking to add it for a long term hold. They will be building out a lot of their assets, so the cash flow will be taxed for the next couple of years. They will not likely increase the dividend during this time. Compared to its peers, it is cheap.

The company has recently gained traction as demand for their Tier I rigs has increased. He is challenged to see how utilization rates can go much higher. He would prefer to own Trican (TCW-T) instead at this point.

Has a propane division as well as heating oil in the US, as well as some chemicals. Sold their US construction distribution business, and the balance sheet is better because of that. With a colder weather in Western Canada, he expects them to have good results. Also, expects them to raise their dividend over time.…

One of largest pipeline companies in North America. Both US and Canadian assets. Even without Keystone, it will do well, and the dividend should go up. Good place to be in a tumultuous market. Yield is 5.1%. (Analysts’ price target is $62.93)

(Market Call Minute.) Had an issue with the management contract that has now been resolved. Feels there is a lot of upside for them. Shipping oil now.

This is a funny one. The book value is $4.80. They started a few more projects in China. It is not for him, but he can see why somebody would like it.

Owned it for a long time and it's done very well for him. People are still producing a lot of waste despite recycling. WCN is run well. Buy the dip. It's at 41x earnings, pricey. Hold or take some profits.

He is looking at it. It has been on his watch list for quite a while. They made the same mistake as before when they ran up debt. They are selling off things that will hurt them. They don't seem to care that much about Canada now. Governments may be less likely to feed them…

Finning (FTT-T) or Toromont (TIH-T) for long-term growth and dividends? This area is a little tough right now. Industrial equipment has been pretty beaten up in the last few weeks. He would prefer Finning, which has the oil Sands in Alberta as well as South America where they have a ton of mining. Toromont more…

TELUS vs. ROGERS All Canadian telcos and utilities are overpriced as investors expect a recession later this year of mid-2020. $39.52 is his target price for Telus; $61.22 for Rogers. Investors are attacted by the yields.