This week there were 30 Top Picks in a wide range of industries: Consumer, Energy, Financials, Technology, Basic Materials, Healthcare, Industrials, Utilities and Telecommunications.
Here are this week’s Top Picks as selected by Elliott Fishman, Eric Nuttall, Colin Stewart, Josef Schachter, Mike S. Newton, Zachary Curry, Greg Newman, Michael Simpson, Paul Gardner C. and Robert Lauzon.
It's modestly undervalued now. Restructuring has borne some fruit, though the market hasn't responded to HBC in kind. Them getting out of luxury lines makes sense at this stage in the economy with limited discetionary spending. He prefers placing this in the retail, and not real estate, space. This is a consumer discretionary stock late…
This is a flyer. Stock is oversold. It was a darling, and then it got punished on bad earnings. Hopefully, next quarter will be better, and it will recover. Yield is 0%. (Analysts’ price target is $146.76)
A growth company, adding stores. They've built their brand and are well-managed. However, they had a few quarters where same-store sales disappointed, so the stock got hit. But there's still room for them to grow in Canada. A decent place to put your money if you're long-term and don't need a big dividend.
What normally happens with the smaller brewers is that they get taken out. He likes the company, but doesn’t follow it closely. A good story with good earnings growth.
Casinos are good businesses. They have had recent tailwinds, such as new contracts in Ontario. He thinks this is a good stock to own. It generates a lot of cash and probably has more upside. However, it is not cheap. He would hold onto anything he owned, but would not buy at this price.
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.
He tries to find companies that are good and getting better than the peer group. They’ll produce about 7000 barrels a day this year and 17,000 barrels a day next year and 25,000 barrels a day the year after that. Enormous growth. Uses technology in the Permian Basin to really grow their reserves and production.…
A Permian producer that has been doing a really good job of acquiring acreage, so they issued a ton of paper on to the market. They’ve grown 14% a quarter for the past couple of years. They now get to slow down on that and focus on delineating their acreage, and also going after some…
World oil demand is still growing, so he's not concerned about the future of oil. That said, he'd own the lower-cost oil companies. BTE is well-run, but at the whims of the oil price. If that price is flat in coming years, look at other oil companies.
(A Top Pick Apr 16/18, Down 15%) A strong cash-flow generator and he continues to recommend it for the international diversification and good yield of 8%. He thinks the payout ratio is still less than 90% and will be capable of continuing the dividend.
(A Top Pick Sep 21/18, Up 32%) This is a cash flow play. They have positive cash flow. They have strong management and is clearly oversold. They are profitable. He did not expect oil to drop to $59. It is more volatile than the index. It is a safe, risky play.
Obviously, it's a tough sector that's fallen at least 50%. CPG should be worth more than what it's trading at. CPG is starting to do a better job and no longer issuing shares. Rather, they're buying back shares. Until this sector takes off, CPG won't make a huge move either. He doesn't think the oil…
TRP-T vs. KEY-T. One of the most important data points is beta. He would choose TRP, because it's less correlated to the market. Has more protection on downside risk. Plus, it has higher overall performance. A couple of weeks ago, it was bottoming and relative strength was holding in really well. (Analysts’ price target is…
ENB has cleaned up its act, getting rid of some assets, cancelled their DRIP and their valuation is still compelling. Various things have lined up now to propel ENB forward. You can hold this for 25 years and do well. ENB is the best in this sector.
Basically land registries in Saskatchewan. Very good business and very stable so dividend should be sustainable. Saskatchewan is one of the more rapidly growing provinces. To him it may be fully valued but it is one of the Steady Eddie stocks that you could buy and just put away. This will not be a sexy…
The exchange space may face some headwinds from a regulatory perspective. They have enormous amounts of data which people pay for. There may be fewer terminals on desks today; however, when there is tenseness in the market, they make more money. He likes it.
What will happen to this in a recession? The Brookfield group are outstanding. In a recession, these guys won't do as well as they are in. That said, he doesn't see a recession coming. Low-risk, good operators. They haven't made a major mistake over the last few years. Savvy.
He really likes the industrial sector. All their properties are in the US and in secondary type of cities. most of their tenants are logistic firms. 99% occupancy. Well run company. P/FFO is 14x. Yield: 6.0% US exposure trading in the TSX. Cheap. (Analysts’ price target is $15.01)
Look back 25 years or more. It went from $150 to $120 approximately late last year. In '08 it went from $25 to $12 in the recession. He thinks it should be in most portfolios. They would go down as much as the broad markets but it will likely outperform in the long run.
Great products, but it'll be a giant in services. They remain an established brand. He wishes he'd bought it at $150, but it's back up to nearly $200. (Analysts’ price target is $194.50)
It hit $133, a key upside technical target. It needs to break through this recent high before he calls it a bull stock. Its fair market value is 35% below current levels. Nice company, but over valued.
🛢 Basic Materials
A leader in industrial cleaning products for hospitals, schools, hotels, restaurants, etc. Has had a steady record of recession resistant earnings growth. Strong balance sheet and good free cash flow generation. Currently trading close to its November lows, the lowest multiple in the last 10 years.
Missed earnings by a penny, revenue up 7.4% but missed by 20M. They have cash to make acquisitions, increased the dividend. Coming into a new season, so we'll have to see how the weather turns out. Has no problem with it at the $70 level. Will flatline for a bit, until commodity prices go higher…
They make bespoke equipment. This can never be Amazon’d because the representative from Stryker works so closely with the doctor when they implant a new device into a patient. They are well-run, their robotics are leading edge. He likes the sector and this individual company but he would manage the idiosyncratic risk in this space…
One of the few stocks that has actually traded up and down in some kind of range. Volumes have been pretty steady. We are a long way from the top, but the chart shows some kind of support level being built in the low $60s. This is a stock he would own. It looks good…
The market doesn’t like the uncertainty associated with this company, which includes a change of management (in progress) and delay of approval of their planned acquisition of another business in the USA. He thinks the stock is overpriced relative to expected earnings growth. It has negative free cash flow. Dividend coverage is good but with…
He likes is the telco in general in Canada. A year ago when interest rates were expected to go higher, they didn't look that attractive. He owns Rogers for some of their media assets. But still likes this one. Projecting a dividend increase.
It's more expensive than Rogers, but he prefers it. They have more wireline and more media. Well-managed. The 5% yield is very attractive. It won't rise much beyond $60. It's a safe place to park money and collect the yield. If it comes off, he'd add more, but not at current levels.