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.
(Market Call Minute.) Great company with a good management team. Has a sustainable dividend, but the growth rate plus the dividend is too boring to attract the next incremental dollar.
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.
(A Top Pick December 18, 2017. Up 24%). This will be a significant beneficiary of LNG Canada for 2023, along with Painted Pony, Bonavista Energy and Tourmaline. He sees this rising to $9 in 12 months and $15 in the next 3 to 5 years. Production is 80% natural gas. They will raise their liquids…
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.
Need to be careful on the gas recovery. It is primarily a weather trade. If you are bullish on gas, this is a solid name.
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.
BAC vs. Citigroup if a recession happens He owns both, but he prefers Citigroup, because it has a lower valuation, trading below tangible book value and pays a higher dividend. Citi is viewed as an international bank, whereas BAC is viewed as American. The upside is better at Citi in the coming years.
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.
It is a big bank but has more regulatory issues than the others. He would not own any of the right now. See Utilities for yield. (Analysts’ price target is $62.00)
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.
China-US trade war is having an effect on entire tech sector. It's a bit more immune to it, but he wouldn't be stepping in front of this train. Perhaps a bit more defensive as a tech in terms of its scope.
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.
Inexpensive at 15x earnings, and pays a nice dividend. But Intel hasn't been at the forefront of handheld devices or servers in the cloud business; Intel hasn't transitioned strongly from the PC world. A well-run company though, but look elsewhere for faster growth.
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.
Apple vs. Amazon. Own both. Apple's a great, big, powerful company that will work out its problems. Both really well run, and moving into healthcare in a big way. Amazon has loads of runway, as does Apple. Buy a bigger chunk of Amazon, as it's performed better. Cloud computing and content business are going to…
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.
Destruction of capital. You don't want to be in a position where you're selling off your trophy assets. He wants to buy top-quality companies with great management, and that's not happening here. Buffet says "turnarounds seldom turn," so he tries to avoid these situations.
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.
Merck vs. Pfizer Two large pharma companies that are treading water. A lot of the drugs they develop are coming off patent. You must look at their pipelines, with Merck doing very well while Pfizer has some good franchises, like Lipitor. Merck likely has the better pipeline. Neither has enough revenue growth or cash flow…
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.
Valuation is a little stretched. There is a strong correlation between this and the US$. They generate a lot of sales outside the US, so when the dollar weakens, this does relatively well. They are trying to become less capital intensive, so are getting rid of some of their bottling operations. When they sell those…
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.
Looks a little bit like a value trap. A competitive business. Subscriber growth is flattening out. The company keeps on adding debt every year. There is not a lot of dividend coverage. Not a fan of the sector. (Analysts’ price target is $34.35)
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.
This is the right time for this. It is a defensive play. It is producing a good return for a telecom. It is undervalued.