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.
Nicknames it Hit By A Car like its chart. HBC is all about its real estate holdings; that's the reason you own this. Doesn't know if the current rally signals a buy. Can't predict this chart. Even consider selling it.
(A Top Pick Nov 16/18, Up 4%) Not liquid, but has held during the recent turbulence. He'd buy it today.
(A Top Pick Nov 13/19, Up 4%) Essential service, pandemic-resistant business model. High ROE. Investments in Central America could do well over time. Continues to like the growth prospects.
(A Top Pick Jun 18/18, Up 1%) Still likes it. It's well-run. They're growing their brands and they have a big opportunity to get into cannabis beverages which will be legal in Canada in October 2019. BRB is well-positioned for this and this market could be very large.
He got stopped out of this. It's well-run, but the casinos are closed so there's no revenue coming in. GC carries a reasonable amount of debt. Also, casinos have high operating expenses, even during this lockdown. He wants to see stability in their debt, though. In recessions, gambling performs well, though.
(A Top Pick Aug 27/20, Down 12%)Stockchase Research Editor: Michael O'Reilly We are choosing to remain disciplined and stick to our stop-loss at $35 and look for better alternatives. Now that key technical support has been breached it could try to retest lows near $25.
PE is an independent oil and gas producer in the Permian. EPS is expected to grow by 56% in the coming year and it trades at 52% of book value. There are currently 21 buy ratings on the company. It latest earnings reported $0.03 EPS versus consensus of of ($0.14). Plus it pays a reasonable…
(A Top Pick Dec 19/19, Down 64%) It offers meaningful beta for increasing oil price. He thinks it will lag other names, especially since more and more investors favour MEG. He does not hold it.
Their balance sheet needs to be fixed, assets are scattered all over the world so operational focus is difficult. Their valuation is not compelling compared to other names. He has been a sell for years.
There were developments where activists are pressuring banks to no longer lend to energy companies. However, energy is one way for the country to get out of the debt problem and in his opinion this is even more reason to be bullish.
(A Top Pick Dec 19/19, Down 60%) It offers meaningful cashflow. They are treading water but have meaningful leverage to an increasing oil price. At $50, it will trade at 24% free cashflow yield, at $60. 60%. It could potentially amalgamate with other companies in the area.
It sells off whenever interest rates increase. It is attractive to own. A biden government should help with demand for Canadian oil.
Concerned about the dividend. In the midst of expansion. Need all the market goodwill they can get, so probably won't cut the dividend. Technically, back to good support. Nervously hang in there.
Monopoly in Saskatchewan. Disappointing performance. Yield is sustainable. Conservative investment that lets you sleep at night. Not much growth. Not interested until he sees change in strategy from management.
(A Top Pick Nov 20/18, Up 10%) The more activity, the better they do. In all the major asset classes. Volumes were down, but now you're seeing more of a pickup.
Remains a great alternative to low bond yields. Private equity and active management continue to be about 50% of the business, and that's where the growth is. Infrastructure and renewables have good steady eddy growth. Compelling on a PEG basis. Sees dividend growing at 10%. Yield is 1.27%. (Analysts’ price target is $56.55)
This is the backbone and infrastructure of E-commerce and logistics. All the big box warehouses near airports are fully leased and they need more of it especially in major hubs. There are 100 properties in the US. They have good institutional support. They trade 10% less than some of their Canadian peers but 30% cheaper…
The company hopes to increase the value by 10 fold in 20 years. On an annualized basis, it is a 12% return on investment. It is attainable for electronic payment companies. The industry only surpassed cash a couple years ago. Still a lot of growth. Currently trading at 39x earnings which is hefty.
A great company with good products and franchise. The valuation looks pricey at 30x earnings, with a 10% growth rate. Revenue growth looks less exciting when comparing to previous performance. In the future, he expects mid single-digit growth. There are other companies in the tech space that has better revenue growth and earnings.
Owns Microsoft and entered back in March. You are getting the cloud, entreprise and other businesses. Likes the diversification and growth expectation. You are paying a premium 31x earnings but revenue growth is low double digits which is very good. CRM, you pay higher multiples than Microsoft. Prefers MSFT.
🛢 Basic Materials
He has owned this for some time now. They are in cleaning, sanitizing and waste management. Bill Gates owns a big chunk of their shares. Yield 0.94% (Analysts’ price target is $187.86)
(A Top Pick Dec 11/19, Down 5%) You want to buy commodities when they're forgotten about. Retail was the reason for the miss. Some investors worry it's a structural issue, but he puts it down to Covid and weather. Still likes it, but sold half his position for other industrial plays. You get paid to…
The gold standard in the industry. They have the best products, sales force and are quick to adapt. They are very innovative. As surgeries start to pick up, their products will see more demand. They are expected to earn $10/share. They are trading at a cheap multiple to normalized earnings. (Analysts’ price target is $214.35)
He liked their Celgene acquisition last year (though the market didn't), because it diversified their exposure to other drugs which have exectued well. Their R&D and core business are doing well. The stock trades at only 8x earnings. There is a disconnect between company performance and the market. It's very cheap and they execute well.…
They own Brookfield Infrastructure. The infrastructure stock has better valuation than the renewable energy fund. Brookfield renewable also faces too much money going into the sector.
They made a big acquisition and ran into trouble, but that now behind them. They've endured Covid this, but there's little stock appreciation ahead. Hold this to collect the dividend.
Both telecom stocks in Canada and US have been stagnant to some extent. The runway for growth for wireless in Canada is very strong. It is more exposed to Shaw's move to wireless than BCE and Rogers. It is trading at 9x EBIDTA which is high, but the dividend is at 5% and the growth…
Juicy dividend, which grows steadily. Predictable business model. Today's results seem fine. Share price is overreacting. Some decline in monthly revenue. One to own for steady and growing income over time.