Most stocks are owned by institutions and the majority of the trading volume on exchanges are from large institutional traders. Although large and mid-cap stocks have many individual investors, only a few possess millions of shares or hold a majority in a company. These institutions are often pension funds, commercial banks and investment funds. Institutional ownership means that these large institutions hold ownership stakes in a company.
Oftentimes, these institutional owners exert substantial influence on management. Individual minority investors also look to institutional owners and what they are doing, as institutional owners are often more knowledgeable about the companies they invest in. Therefore, these investors can exert substantial impact on the stock price.
The number of institutional investors in a particular company are neither a good nor bad sign. However, more institutional investors will offer more stability as diffused ownership minimizes the impact of one firm selling off their stocks.
Torc Oil & Gas Ltd (TOG-T)
A well-run oil producer that has a good management team. They are generating positive cash flows. They usually underpromise and over-deliver. The dividend is considered safe. Their yield is 6 per cent.
Cardinal Energy (CJ-T) vs Torc Oil & Gas (TOG-T). Very different companies. Cardinal is a medium gravity producer. They are 60% exposed. They are going to lower their debt. They can pay the 10% yield and that is sustainable. He would buy Cardinal Energy (CJ-T) vs Torc Oil & Gas (TOG-T).
Birchcliff Energy Ltd. (BIR-T)
A Canadian natural gas company. It has done well and is generating cash flow. The balance sheet is in good shape and they are paying off some debt. They also raised dividends last quarter.
BIR-T vs. CR-T. BIR-T has much larger production than CR-T. BIR-T is a large cap vs. CR-T being a small cap. He likes both companies and owns them. He does not have a preferred one.
Tourmaline Oil Corp (TOU-T)
A natural gas producer. The company is adding more liquids and are looking to have more cash flow. Signs point to a dividend raise or a stock buyback.
(A Top Pick Mar 08/18, Down 8%) One of the biggest gas producers in Canada. He is surprised it has been as stable as it has. It has done a good job with hedging and market diversification. Still a core holding.
Atlantic Power Corp. (ATP-T)
A power generation and distribution company. The company has assets in the U.S. and Canada. As consumers rely increasingly on electricity, the business has a good niche. A lowering of interest rates will help this company’s stock price rise.
Seasonality for utilities is just about to start in June. The bottom in February is really indicative of a lot of utility companies. Chart shows a nice nascent trend. If we get above $4, this will usher in a lot of new buyers. Thinks there is pretty good upside potential on this.
🛢 Basic Materials
Turquoise Hill Resources (TRQ-T)
A mineral exploration and development company. They have one of the best copper deposits in the world. RioTinto owns about 51 per cent of the company. This company is sensitive to copper prices.
Looking fairly attractive at this level. The discovery in Mongolia has the prospect of being one of the largest copper/gold mines globally. Brought in a partner, Rio Tinto (RIO-N), which took control of the partnership, which has de-risked the project for Ivanhoe. They are in the market with a rights offering in a $7 range,…
Morguard Corporation (MRC-T)
A well-run real estate company that holds a diverse portfolio of properties across North America. They buyback stocks with their free cash flow. There is not a lot of volume but is at a good price right now.
A real estate holding company. The value of the assets is well over $200 a share. But the stock is very illiquid. You can get in and get trapped, not being able to get out. He thinks they have a terrific portfolio of real estate. He likes it very much.
Bank of America (BAC-N)
They are well positioned to increase dividends or buy back stocks. It is quite cheap although it’s gone sideways for the last year. They are reducing cost and changing their capital ratios.
(A Top Pick Aug 30/18, Down 14%) US banking is very cheap, lots of capital. Can't compare them to European banks. Great story, buying probably at or below book value. Dividend of 2.1% and increasing. Buying back shares. Good chance to get in.
Wells Fargo (WFC-N)
It’s selling at a discount to other U.S. banks. They were hit with a sanction for front running customers and other corporate malfeasance. The Fed is now monitoring them so tread carefully.
(A Top Pick May 31/18, Down 12%) Exit level was $50.50. Needs to move above $48.20 before you buy. There are opportunities other than banks in the market right now.
Their software as a service with subscriptions is doing very well. The cloud department is growing. The margins are high and it is a more defensive name in the tech sector. They are turning the company into a utility in some sense.
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…
A company that will benefit from 5G. The software earnings are also doing well. There are some concerns over the trade war as their hardware might be subject to tariffs.
They’re in a mature market and the gross margins are not expanding. The stock showed some weakness with the new China tariffs.
(A Top Pick Apr 25/18, Up 16%) There's a new CEO. This old-tech stock has done very well. He's long recommended it.
A leader in the market and has more cash on the balance sheet than some countries. There are concerns over consumer privacy and slowing iPhone sales but the company is not going away.
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…
General Electric (GE-N)
The beleaguered company had its first quarter of beating expectations. The management is doing its best to survive but the company has been evolving so rapidly that it is hard to say how it will go. This has become more and more a speculative stock.
They've fallen on hard times due to mismanagement. They carry a lot of debt. So, if we enter a recession, GE will have a tough time paying that off.
Pfizer Inc (PFE-N)
The largest pharmaceutical company. It is holding and is more of a protective play. They have successfully acquired some companies and have promising drugs. There are only a few products coming off patents so it is a pretty safe pick.
Healthcare in general has outperformed in every bear market. A lot of it comes from large cap pharma companies. He prefers LLY-N. But there is no question that this one is interesting and has good management.
Comcast Corp (CMCSA-Q)
They have a U.S. market penetration of 45 per cent. They have low volatility and pays a good dividend. The largest broadcasting company and are somewhat protected from Netflix streaming as they provide the internet network to consumers.
(A Top Pick April 27/16. Up 24%.) This just did a 2 for 1 stock split last week, and continues to have huge market leadership. They continue to roll out the X1 Infinity Operating system. This has a pretty captive audience and a really good subscriber rate. It should be part of everybody’s portfolio. Still…
Coca-Cola Company (KO-N)
A defensive play. A consumer staple name that is diversifying away from their main product and getting more into sports drinks. They also recently purchased a coffee company with a lot of growth.
This has been diversifying into other beverages including water and new age beverages. Prefers PepsiCo (PEP-N) which can do foods with snack foods where their focus on growth is. In the short term, both are going to be a little weak. The consumer staples group has done well, but now people are looking to get…
A major telecommunications company in the U.S. They are selling off assets to pay off debt. A company in a tough environment that made big bets on acquisitions. Their dividend is high but the stock has been range bound.
Question on international telcos - he thinks that the international telcos are into the heavy dividend style investment. Vodafone is in Europe. The US is lower risk. Dividends are going to stable or up with this one and Verizon Communications (VZ-N) as well.
Verizon Communications (VZ-N)
A defensive play that will benefit from 5G. There are concerns about their debt and the sector is very competitive. They are moving up quarterly and pay a good dividend.
It is the high class telephone company in the US. He likes it. He owns T-N because of the higher dividend but it has higher risk. VZ-N is in a position to increase its dividend a little. 5G will involve a lot of expenditure on the part of the providers. Data prices will come down…