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.
He thinks they have a lot of valuable real estate and have attempted to monetize it, but even as they have done this, the stock has not made any headway. The negative secular trend in retail is just too tough. If they can't get the retail business going then investors may start to question if…
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 great stock. It struggled last year as the stock price fell, but has responded well thus far in 2019. Last quarter earnings were an improvement, but the multiples are now much more affordable. It is subject to opportunity if the economy slows down.
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.
They are growing into Ontario. Their recent earnings really caught on with an impressive number. It was not even a full quarter of results from the recent acquisition. They have 20 year contracts. 16 times earnings. (Analysts’ target: $51.80).
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…
It's very cheap and profitable. The balance sheet has gotten better. This should trade at $4, though he can't see it happening. The current price is a good entry, but the oil sector needs a catalyst (i.e. pipelines) for this--and other energy stocks--to really move.
Pays a near 15% dividend, which is getting dangerous. They carry $2 billion of debt, not horrible leverage, but still.... VET is in the wrong sector--oil is getting punished. There needs to be a China trade deal for oil to lift. Could be a couple of years before oil picks up. He owns only 4%…
85% light oil and 15% natural gas. It is a very low payout ratio. It is a monthly payout of more than 7%. It will be a fabulous rate of return. (Analysts’ price target is $2.15)
People consider it to be very cheap. You aren’t getting per share growth because debt pay down is their priority. You need a rally in the commodity price. They will muddle along with their peers.
(A Top Pick Jan 11/18, Down 0.1%) Increased dividend by 8 or 9%. Keystone is the wildcard, and explains why stock hasn't moved. Price will start to move if it gets approved. For utilities, it's all about rate-based growth and they can start to increase profitability. Yield is 5.2% with close to 10% increases.
Holds a rate-reset stock that's gone down. Sell now, wait for a rate rise or buy the common shares? It's double-whammy now, because rate-reset are going lower and you get less of a value with the spread. Every 5 years they reset to a spread above Canadian government bonds. Also, ENG is an oil stock…
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.
(A Top Pick Oct 09/18, Up 23%) They have billions in their asset management business which is generating management fees. Add their real estate assets and private equity. They've done a great job of building their business. Low volatility and they benefit from low interest rates. It's up 30% YTD and resilient during the current…
(A Top Pick May 10/17, Up 10%) He's still buying it. It's priced and pays its dividend in USD, so his return is actually higher. It has US assets. It's a little known stock. They partner with CPP and Alberta Investment Management, where they build facilities, mostly warehouses for traditional and online retail and manufacturing.…
He owns Mastercard instead. As the world grows, electronic transactions will continue to grow. His investment has more than doubled since 2018. He would hold your nose and buy either Visa or Mastercard. The fundamentals are great, but recognize it is quite expensive here. The key is to know when to sell and take profit.
It's really struggling for the next product. Just doesn't see sustainable growth without a new product to lift earnings. Apple Services is definitively going to be a good driver, but thinks there are other opportunities elsewhere. He has an Android phone, doesn't see why someone would pay $1,500 for a new iPhone and be locked…
Could it fail to meet earnings expectations? The software license for a new computer almost equals the cost for the hardware. The stock began to run when they introduced a dividend and then went higher as they moved into the cloud space. If you can buy it at a decent price, it would be a…
🛢 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.
He's shorting, because of its valuation. They have mid-range price momentum, and volatility is OK. But they trade at 22x earnings and missed a recent quarter. Weak valuation that needs to improve.
(A Top Pick August 21/17, Up 20%) Hips and knees. Robotic surgery and 3D printers. His fear is that Stryker will buy Globus, and the subsidiary will overtake the parent.
It is consolidating here. He suspects that the announcements from the trump Administration on American Patients First affected it. Pharmaceutical companies in general are being affected. Not looking too favorable on a technical basis.
This is what you do with the high Canadian Dollar. 6.3% yield. High yield income producing assets around the world.
Don't touch it with a ten foot pole. It is a mix of public and private ownership. There is a lot of debt. Revenue is controlled by the government. This one is too political for him to get into.
Though near its all-time high, you could still open a position today. Most recent quarter they reaffirmed dividend growth rate of 7-10% for next 3 years. Payout ratio is expected to go down. Free cash flow is expected to double over the next 3 years. The stock probably has some upside.
A bond proxy? A steady stock with a good dividend. The price war in wireless is canalizing some margins. He thinks the fundamentals of the company will likely deteriorate over the next couple of years. A 5.3% yield. He will continue to hold for now.