This week’s new 52-week lows… (Dec 12-18)

Gas vs oil? As there is less oil production, associated natural gas production is falling. He owns BIR and was buying yesterday. AAV has performed well relative to other gas producers. He took profits on AAV recently and moved it into oil producers. BIR is trading at 2 times EV, but cuts its dividend by…

Debt concerns? BXE took bankruptcy protection when debt became too much. There is no equity value in it any longer. Companies that have debt that matures in 2020 or 2021 will have issues. He sees no issues with BIR or TVE on this topic. The new Federal relief program for large companies may be difficult…

It is a liquids rich player with very high liquids content. The problem is that the market cap is below the radar, and the debt is high. It was a $4 plus stock when we had decent gas prices. They are looking to bring their debt down. He thinks the company will survive. They've been…

HSE-T + CVE-T: Stay after the merger? He does not own either one. He understands the merger makes sense. There are a lot of cost savings that can be found. He prefers CNQ-T, PXT-T and one of his Top Picks today. He prefers these to HSE-T. If the sector bounces back you could get an…

(A Top Pick Oct 28/19, Up 3%) MTL.DB-T Convertible Bonds Maturing 2026, 5.75%. He sold them out of his equity portfolio but still owns them in his bond portfolio. He is very familiar with the company and they have a very consistent track record. There is an imbedded call option in the share that triggers…

Natural gas? The outlook for natural gas has improved as associated production has impacted by shut in oil production. He is not fond of PEY as they have covenant violations (that should be worked out). He has others he prefers.

Pengrowth (PGF-T) and Perpetual (PMT-T)? Had some challenges with their balance sheet over the last couple of years with the collapse in oil prices. This one would be a little riskier. If you really see a big jump in commodity prices, this probably has a lot more upside than Pengrowth (PGF-T).

Quebec is moving forward. They are having fabulous wells. They have higher net backs because of the lack of need for transportation. On a little bit of weakness the stock is one to keep an eye on.

There are better oil names. He bought and sold it recently and made some money. But it can't de-lever as quickly as its peers. Expect 5-6 years for them to pay off their debt. VET is not bad--you're leveraged to international prices, but other names will move higher, sooner and faster.

The company is very cheap in terms of price to book. Their book value was $4 at the end of June. However, they have a debt problem: $211 million of debt compared to an equity value of $369 million. He sees this as a takeover candidate especially now because he is seeing consolidation in the…

(A Top Pick Aug 13/18, Down 61%) They disenfranchised the Canadian shareholders. He sold out sooner before the de listing, so did not do as badly, nor did his subscribers. He disagrees with their move.

A mispriced stock. It is being held back from forced selling from Seven Gens holders due to a mandate. This used to be the tier one quality name in Canada that traded at a huge premium. It is trading at 3.2x cashflow. Sign of an inefficient market. 8 - 8.5% weight for him. Would expect…

Bought 9.9% of ATH at around $0.15 and now it is at $0.48. At $60 oil brings up their free cashflow by 10 times. You can generate $140M in free cashflow. Entered into deplorable hedging for the first half of this year. Need to give them a pass. Debt refinancing coming up is a huge…

The dividend stocks as a group has underperformed. There's nothing wrong with the fund. He would prefer technology stocks although they don't pay dividends.

Smaller Canadian energy stocks will benefit from gas demand when people travel in the summer. BIR is more focussed on natural gas, which will enjoy a rally following he Texas freeze recently. However, swings in energy prices in Canada will remain and making money will remain difficult. He prefers the safer CNQ, Suncor or Tourmaline.…

If oil stays up, Baytex can go with it. Their balance sheet is quite bloated compared to peers. They do not have production growth. The commodity side is growing cash flow but there are better plays.

He won't buy any service stocks today. It just isn't profitable; the market isn't rewarding drilling. Stop drilling and buy stocks, is his message to the oil industry. He'd rather buy Trican who are buying back stock.

Had a convertible note that was converted to stocks so bought it. 7% stake in the company. 2.3x cashflow at $60 oil. Trading at 34% free cashflow yield. Not the most exciting asset, but generates a lot of free cash. They could reinstate their dividend. (Analysts’ price target is $2.65)

They have cut back and preserved capital. They do not have a debt issue. They are a gas play. If gas prices stay strong, they should do well. She anticipates their 4th quarter production being lower. She is not buying it today, but the future looks good.

They did a flow through share. The company is involved in oil and Nat. gas. He has a $1.20 target on it. If they can generate more cash flow they can get the debt down. He likes it. He may add on weakness.

Enterprise value is very cheap. But the issue is they have debt. They did an infrastructure deal to reduce that debt. A big part of that debt is a 2024 maturity at a low interest rate, so Crew will survive. Their liquids are in a condensate-rich area. The stock has been hammered because of high…

Just beat earnings and have increased production. Cheap valuation compared to peers. But it's getting more expensive heading into 2021. There's no growth here, but that goes with the entire oil patch. The real issue is will they survive. Their balance sheet is getting better, but still high for a blue-chip name. You'll be saved…

He stayed away because they went to the states to make acquisitions. He did not know why the Americans would not already take these assets. He stays away from it.

It has performed relatively well. One overhang is the uncertainty of the pipeline that moves oil from their key location in the Balkans. If the pipeline is cancelled, there is enough rail capacity to move barrels. It would impact their cashflow by $40M in incremental transportation cost. $2/barrel. They made an acquisition finally. 2.8x enterprise…

An oil and gas drilling company in North America. Oil and gas services companies have additional leverage on the oil markets which already have significant volatility. If we get into the positive sweet spot it can raise prices and make a lot of money, but we are not there yet. They have been through multiple…

NexGen vs. Fission He owns both Fission and NexGen. They're far from infrastructure in the Athabasca Basin and would be challenged if it wasn't for their deposits being large and of quality (and next to each other). They could get built as a pair. The Fission deposit is borderline-tier one deposit, whole Nexgen's is. The…

Safe dividend? It's safe. We'll see what mark on the dividend the new CEO will do. They just added acreage in the U.S. Valuation is 10x, a discount to Prairie Sky. Sees 40-50% upside based on $60 oil, however, he's looking for 100% upside after this harsh oil bear market. The yield will likely rise…

They have done some good acquisitions and they have heavy oil exposure, but the liquidity is just too slight.

A mico-cap that had some major issues. He would not look at this at all.

It rose 4x since the mid-March low. Production is and will shut down in Q2 and Q3, and won't return until Q4. They are seeking financial support from the EDC and BDC, which are not giving support to any Canadian oil companies. There needs to be more support though reports today say that the rules…

It is quite a small company. It is hugely volatile. There a lot of problems over the years with the pricing of data coming from India regarding a 10% stake in another company. They have too much debt. The price of the gas they sell has been negotiated. A tough name to predict.

(A Top Pick Oct 22/18, Down 88%) He sold at $3.22, taking a big loss. They have a lot of worries. They are looking to sell the company. They might just liquidate the company, but clean up could be very expensive. He does not like stock consolidations and used that as a trigger to get…

(A Top Pick Feb 12/20, Down 9%) He used to own 5% of the company and made a 40% profit in a few months--but he sold it way too early. Give this lesson, now he'd rather sit on oil names and ride it out, or else he'll miss the upside. Companies like this won't spend…

In tough shape. They made the wrong bet on natural gas. Sell it and buy elsewhere. But it will pay off over five years.

Has nat gas exposure--and he's bearish on all nat gas stocks. Market cap is way too low for investors to really care for in this sector.

70% fracking and then they have coil tubing. They are pretty cheap. They are doing reasonably well. It is really, really cheap. The two biggest shareholders are funds so liquidity is an issue Buy on weakness; he would have a target of $5.

Attractively valued, trading at around 12% free cashflow yield at $60 oil. Would go up to 17% at $70 oil. Big underperformance relative to CNQ. Good upside, even up to 50%. More than that at $70 oil. Sold to buy small cap oil companies. Preference for other names.

Doesn't see much upside here, though there will be pricing power finally for the pressure-pumpers now that foreign players have left Canada. He begs companies like this not to invest excess money to drill a lot, just keep drilling flat. And use excess cash to buy back shares. The space is less competitive than before.…

A huge laggard this year. It is trailing other names at 20-30%. They have not yet reinstated dividends. They should reinstate it early next year. At current levels, the stock trades at 14% free cashflow yield. At $50-$60 oil, it trades at 30%-60% free cashflow yield for dividends and buy-backs. (Analysts’ price target is $2.46)

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. The sector rally has paused though TOU is still up 39% this year. The stock remains attractive on most metrics and good growth is expected this year. Next year should see slower growth. Cash flow is good and dividend was raised a couple weeks ago. Unlock…

Liked their ability to buy back shares from free cash flow. But then management decided to chase growth, so he divested. Decent gas exposure. Its recovery is still too low to attract investor interest. Better names to own.

It's been stuck at these levels for a long time, but likes recent volumes. No problem buying this one.

Forestry space He owns no names. The stocks are okay but face trade disputes and an economic slowdown that will hit housing stocks. The stocks have been beaten up.

(A Top Pick Jan 27/20, Up 109%) He sold, albeit early. A commodity, so can be cyclical. Demand continues to be strong in NA, with tight market supply.

Has an old mine outside of Los Angeles that was run in the 1930s. Closed down during the Second World War and they are doing open pit mining in the area. Has some issues, but at these gold prices, it will probably start to work again. Under followed. Highly speculative.

The company has suspended its dividend. They operate diamond mines in South Africa. They are looking into underground, from open pit. The cost is more expensive than thought. The price of diamonds has been reduced, though retail prices won’t change.

Agnico-Eagle (AEM-T) came in a while ago and made a 9.9% stake in this company. The stock went up, but it really hasn’t done much since then. Then Barrick (ABX-T) came in and said they really liked the deposit and wanted to do a joint venture. This is a much better approach that is better…

Likes the managers, but concerned with the topography. A decent-sized gold project. A good speculation.

(Top Pick Mar 8/11, Down 65.85%)

He's owned this for two decades. ALS has been weak lately because a lot of its cash from royalties from coal mines. Alberta suspects coal gets backed out by natural gas, which means ALS's free cash flow from that gas will decline in the next five years. This stock is still very cheap based on…

Wallbridge Mining to buy Balmoral It depends on your timeframe--some will take the premium in Balmoral and grab the profit. He expects in two years that the deal will benefit shareholders with lower costs. The Abitibi is a great gold district. If he owned this, he'd hang onto it.

Owns it but is not buying this name. The valuations are great, and are cheap. You want to buy cyclicals when they are expensive, not when they are cheap. What happens when the commodity prices fall? It may be a supercycle. There are better companies out there, but you can probably accumulate in pullbacks.

This now has a project in Mongolia which has epithermal veins, which he loves. When you do find them and they carry great grades, it can grow really fast. This has a 50 g/meter width quite prominent with something like 16% which gets him excited. Still very early stage.

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. The sector and in particular the company has shown good momentum. Good cash flow off-sets their stretched balance sheet. Cheap on valuation. Unlock Premium - Try 5i Free

Should hold even though it has run up quite far. Lumber prices are astronomical, up 50% in the last quarter. Not a lot of factors that would stop or slow this. Home building is off the charts. New capacity is difficult due to covid. Will have excess cashflow. Not expensive at 4x enterprise value, 6x…

“Jumps and Steps” – quite common in junior companies. Each jump is a news item. As it gets closer to production, it will keep on doing this. Pullbacks are due to profit taking. Must stay above the $0.30 level, otherwise it may be bad news.

Getting to the right theme is the most important thing. Has a good basket of assets. Recently pulled back. It's a small cap, so you have to be careful. But it should continue to participate as long as base materials continue to improve.

This is on his watch list. He is not familiar with their fundamentals. Today's earnings release will help define their future.

Management turnover. Waiting to hear about future plans. Owns office, retail and industrial, so there's no obvious single plan. Risk/reward questionable.

Stockchase Research Editor: Michael O'Reilly BDT operates as a contractor in the Canadian construction market. As new vaccines roll out, we bet work on infrastructure projects will ramp up quickly in the new year. It pays a good dividend that is backed by a 71% payout ratio. We would buy this with a $6.50 stop-loss,…

The banks are all benefitting from market sensitive fees like investment banking and yield curve. They are trading at 10.3x 2022. A good risk-reward play. Balance sheet looks good. They will buy back their shares or increase their dividends in the coming months. (Analysts’ price target is $118.89)

They acquire a lot of businesses, especially in the U.S. investment advsiors, and are shifting from mutual funds to private investment advisory. This will be a powerful platform. The stock has been languishing below $20 for a long time, especially in 2020. When markets go down, asset managers go down more, and rise more than…

It broke a down trend. It has pretty weak upside. The recent level of highs has not been taken out. It is struggling.

GWO vs. MFC Likes Great West because of its strong yield of about 4.76%. CMF dividend is 4.63%. Both have performed well since March 2020. Quite similar. MFC provides more foreign exposure, especially Asia. Insurers are doing well now, and benefit from steepening yield curves.

It is a difficult stock to own in this environment. The pandemic has shut them. He believes the distribution has been suspended. They have impaired cash flow and higher level.

A Quebec based financial services, insurance, financial advice and brokerage. They have been caught up in the brought sell-off in financial stocks. Interest rates being low has hurt them. However, he sees interest rates rising as the economy improves. Top 3% on valuation, 8x PE, 4x cashflow and 1x book value. It is cheap with…

(A Top Pick Dec 04/19, Up 13%) He'd buy it again. Nice value stock. Nice yield. Trading at discount to book. Would benefit from rising interest rates, which he expects. Cheaper than all the banks.

He is not bull on the office space. They have been growing in sub-markets he is not keen on. 37% is in Atlantic Canada and he is not keen on their holdings.

(A Top Pick May 14/18, Down 21%) It had a tough go since he was on. He continues to believe it is one of the best plays to get exposure to bit coin. It is a well run company.

(A Top Pick Feb 24/16. Down 43.33%.) This was a big disappointment. They changed their focus on their business plan. He got stopped out. They were basically doing loans to doctors, but have now changed and is doing software service. The market didn’t like that.

Small and obscure and in commercial real estate that he doesn't like. This will suffer if there's a downturn. This is also small-cap; better to buy a larger-cap REIT.

Is there any growth in the investment business? AGF's balance sheet is too big for what they earn. Potential write-offs must happen to bring that down. Asset management businesses are being killed. $10.84 is his target price--lots of upside and they can cover their dividend.

He owns this one and likes the management team. There seems to be a consistent buyer of this stock. They have high margins. It is not cheap at these levels. There are not too many ways to play technology from a real estate perspective. They have a strong position on pricing data in the real…

It's a lot more competitively priced than Royal. It trades at 1.4x book and pays a safe dividend over 4.5%. He expects growth in the coming years. The banks have been unable to raise dividends, but that's likely to change if the recovery takes hold.

Blackstone took over Dream Global, and DRM got a large cheque out of it in their holdings and asset management contract. They've since done a large issuer bid that that the biggest shareholder, the CEO, tendered into below NAV. So, the NAV has grown. DRM will benefit from lower interest rates. (Analysts’ price target is…

Ultimately, when yields rise, income goes up. How much will yields go up? The global economy cannot handle higher interest rates. Insurance companies are doing better, but he does not expect it to last beyond the next 6 months.

IGM-T vs. MIC-T. He would prefer MIC-T. He likes the underlying fundamentals, but has always worried about a real estate downturn and how it would affect it. He prefers it to IGM-T where he does not see how the fee structure would be sustainable in the long run.

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. It is up 172% this year. The company is reaping the benefits of transaction volumes surging with bitcoin price. Moves with the bitcoin price. A little rich at around 10x sales. Unlock Premium - Try 5i Free

(A Top Pick Feb 16/16. Up 6.28%.) This has some creative stuff and he had been looking for bond portfolios that are actively managed and a little bit outside the normal ETF’s. He is still buying some of this.

You have credit risk for mortgages. Banks are well provisioned for credit losses, though these might be loosened shortly. The yield curve is steepening so in the short run, banks are more profitable. It's hard to say how much is priced in. Not early but if the yield curve remains steep, banks will do well…

HPB Energy Bull+ ETF. Immediate leverage to oil price moves. If you have a very good near-term bet that you want to make on oil this would be the way to go but if you are looking for an investment in the oil patch that has a long-term investment implications, then you should go to…

Cuts in dividends? This ETF covered writes about 33% of the portfolio. The higher volatility in energy adds well to value -- buffering about 10% of the total loss. The dividends could be cut entirely by the companies. The premiums would likely maintained.

HBP S&P 500 Bull (HSU-T) or BMO Equal Weight US Banks Hedged To CDN$ (ZUB-T)? These are 2 completely different things. A lot of people are negative on Bull+ and Bear+ ETFs but he thinks there is a place for these things but he doesn’t think it is here. Thinks it is going to be…

This is a call on oil. He is not going to want to buy a lot of oil. This is the 15 largest companies and they write covered calls. You will collect much higher premiums for the calls. But he would be cautious of this one.

The world is moving away from oil, but in the short term, there could be increased demand to supply. If oil is $60-$80, oil stocks are pretty cheap. Likes the sector to trade, but not for the long term. The biggest investors in green energy are these traditional energy companies.

Europe, Australia, and Far East so has been affected by Brexit. A good ETF but hasn't performed well. Could buy ZWE, which is more European based. Would like to see more U.S. exposure.

(A Top Pick August 8/17, Up 8%) This holds what’s left over from the XIU 60. Wanted to get into some smaller stuff to get better diversification, and focus on this rather than the broader-based indices.

It's the US small caps index. They do better in times of declining yields and higher growth. This is good if you want to hunker down and hedge the US dollar. Small caps are beat up, but he predicts a rotation in the coming year to favour small caps. XSU is decent, but he prefers…

He would recommend taking a tax loss on this and buying into his energy fund. His fund has fewer names and a larger average market cap. The ETF is passive -- he prefers active management.

In general, US financials have had trouble tracking the S&P. He's underweight financials. Net interest margins, loan losses, economic uncertainty. Had moved up, but now back down.

Over time it will come back. They have a strong position in liquor retailing and have moved into Cannabis. They are clearly going to be a survivor. They are going to be able to consolidate.

Allan Tong’s Discover Picks Dollarama sells cheap stuff and has enjoyed a near-monopoly on selling household goods during these lockdowns. No argument that DOL has done very well. It peaked December 9 at $54.58 November 1, just shy of its all-time high. DOL stock has since peeled back 10%. It continues to enjoy a strong…

It is the consumer spending money into the economy. This is a good stock to be in and even though they have a good backlog, you will find that investors will start to lose interest starting late April. Put a trailing stop on it later on in April.

The car parts suppliers trade at low PEs, but are vulnerable to the auto cycle. Good news is that car demand has picked up faster than expected. She owns none of these stocks, but Magna is best in this class, given its global platform and recent performance.

It is unbelievable where this stock is trading at. Acquisitions this year are worth less than half what they paid for them. It was trading at less than half what it was worth. They are trading below the amount of cash they have. It shocks him how far it continues to go down.

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. The company’s inventory is quite liquid and they are able to cover current long term debt. Debt levels also look manageable compared to cash flows. The total debt is around average although interest expenses are above average historically.. The current ratio is healthy at 4.3x…

(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.

It's a very difficult story. People will take time returning to the cinemas. Cineplex did a good job offering ancillary services. Also, film studios like Disney are rethinking how they will exhibit movies (i.e. streaming). Will the Marvel blockbusters return to big screens?

In general terms still on a downtrend. Bearish big picture. Could get back into the 20 dollars.

Pleasantly surprised with the business fundamentals. Aspects of their business are growing. Very undemanding valuation. Continue to hold. It's on his watch list.

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. Their Q3 report was very positive and beat estimates. The revenue forecast is 40% compared to last year. The EBITDA forecast is nearly 75% of 2019 levels. The stock should start being more noticed. Unlock Premium - Try 5i Free

Provides a service very similar to Alphabet (GOOGL-Q), which is provided for free. When your competitor is providing your services free, it is tough to be competitive.

A contract manufacturer for electronics, communications, and storage. The move to the cloud has benefited them. The stock has struggled for a while but it is too cheap to ignore right now. Top 10% on valuation. 0.6x book value, 4.3x enterprise to EBITA, and 4x cashflow. A cashflow machine with no concerns on the balance…

(A Top Pick Feb 20/20, Up 132%) He stuck with it and was rewarded. He still owns it although not as big a position as he once had.

Just announced a discovery in Columbia. Flow tested over 2000 barrels per day. This well could produce up to 5000 when brought into production. A very well distributed stock so it might not jump too fast. Company could get taken out.

At an inflection point. Technology, right clinics, and right billing cycle to drive free cashflow, which is the lifeblood to being a consolidation play. US institutions are interested in it. Demographics are in their favour, a massive tailwind. No dividend. (Analysts’ price target is $5.24)

(A Top Pick Dec 20/18, Down 40%) It had a good turn in January. Beaten down stocks can have a nice bounce in January.

There's always something that stops him from entering the seniors space in REITs: labour, regulator issues, though again demographics are a positive. That isn't a good enough, though. How will governments with huge debts supplement the entire seniors home space? However, EXE is cheap. This space is too volatile.

They hit a financing crisis and needed cash. So, they issued 20 billion share at 1.5 cents per share. A massive dilution that destroyed the shareholder base. Avoid.

A US company like EIF-T, and is it like Cargojet? No, not like Cargojet, and he can't compare EIF to an US company. But a Canadian comparable is Onex, a holding company that owns industrials and several small airlines that served remote regions (i.e. northern Quebec). All airlines are struggling now, but these remote areas…

(A Top Pick Jan 10/20, Up 12%) Trades at around 14x with 32% growth rate. Has done great cost-cutting measures and expects this to go higher with the recovery. It pays a nice dividend. You want to buy when there is fear like right now.

Likes it. A cyclical business. Commercial business has rationalized costs for base business and made some acquisitions. Good cashflow. There is a lack of growth but they are solving it with m&a. Valuation is cheap at 6x cashflow and enterprise value. Could be choppy around earnings releases. Overall trend is in a good direction. A…

It formed a nice base. It has a strong yield. It is coming out the last few days. We are getting close to a break out.

He bought it as a value play with sum of the parts worth more than it was trading at. They are trying to sell some of the parts. Thinks they will sell all the parts and distribute the cash. $4-$5 breakup value. It is taking longer than he thought to break it up.