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.
He thinks there is an opportunity with this one as the light oil differentials will compress again soon. The company sells into the Cromer market, where differentials are much tighter. This translates to high-quality valuations at a good discount. He expects steady eddy growth.
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.
It is a natural gas producer. He likes the setup for Canadian gas stocks. He bought in the fall. We are starting to get a cold winter. It set a record in Toronto last night. KEL-T was highlighted to him this week as one that gets a pretty good price for its gas and he…
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.
Too big to be taken over, except by a major, and it's quite independent, so that's a very low chance. Pure gas play, well run, profitable, has growth. Chart is pretty good for an energy stock. But valuations are still extremely low. It's in upper 5% of names, but whole group is out of favour.…
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.
Recognizes this as the only, very large, new independent listed copper producer in the world for many years. Rio Tinto (RIO-N) now controls it totally and are the best people to do the block caving and the best people to be totally organized and to maintain a good relationship with the Mongolian government.
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.
One of his best holdings. This is an amazing company in real estate. A special blue-chip. It has a really good team working for it.
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.
We’ve seen cyclical areas of the market, like consumer and banks, really moved on that notion. If the Fed is able to engineer a steeper yield curve, this will help BAC. Thinks that you can hold this long, and he doesn’t think it will tank. (Analysts’ price target is $35.00)
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.
There are more issues with this one than the others. The Fed is now monitoring them and have them under restrictions. He sold within 10 days of the news items about the pervasiveness of the problems. There are other companies you can go to that don’t present the issues this one does.
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.
(A Top Pick Feb 13/19, Up 37%) He still likes it. Businesses will continue to move to the cloud which adds a lot of value to those companies.
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.
Long-term view They beat on their top and bottom line, but guidance was below the street's expectations. It trades at only 17x, which is not high enough for him. Fine to hold, but buy at a lower price. If China-US don't reach a deal, CSCO remains vulnerable.
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 Jun 26/18, Down 5%) Still loves this despite pressure on chips due to the China-US trade war. $83.07 is his model price, 77% higher than current prices. Intel isn't as cyclical as its peers. You may need to wait for the next cycle in semis though.
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.
He sold because much of revenue comes from iPhone. Risk management concern. Issues in China. Smartphone growth slowing. Not the Apple of 5 years ago. Has done well, pulled away from the rest of the FANGs.
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.
It should be doing very well. The downward trend to last November goes back quiet a way. There will be resistance just below $11. It may be time to move on. He would be trying to get out of this.
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.
It's a machine that makes acquisitions which generate revenues worldwide. However, they lack growth and a presence in oncology though they recenly made an aquisition that can help growth. Expect modest growth, but limited downside too if a clinical trial fails. Good dividend and balance sheet. Good to hol.
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 complicated company. It is family owned. He prefers Disney (DIS-N), because they don’t have ownership of cable TV stations. Feels Netflix is too much of a threat to TV stations. He likes part of this company, but doesn’t like the stock.
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.
Not a sector he favours at this time. However, this has been decent, relative to the other names in the space. Trading at about 23.5X Earnings with a 6%-7% growth rate, making it a bit expensive. It gives a 4X PEG ratio, which is the high end of its range. It’s forward PE of 23.5…
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.
He views this differently in the space, due to its high level of debt. They have made big bets on acquisitions. They have $170 billion in debt -- at some point this will bring risk. Its high dividend is also at risk to a future cut, he feels.
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.
Question in general on Telcos. How do they compare? Telcos do well in an environment that is a little murkier. He doesn't see that now. He prefers it to AT&T as they have a better performance. He likes BCE in Canada for the dividend and owns Rogers.