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Stock Opinions by Norman Levine

COMMENT
Take a long-term view and don't get hung up on temporary bumps. It's hard to time the market, so avoid guessing tops and bottoms. Best to be fully invested at all times. He holds 4-8% cash in his cash, which as invested as he gets; this cash avoids selling something to buy something else. Over time, markets go up. Inflation is a bigger threat than central banks say. Costs are rising; there are shortages of materials and labour, and this won't end anytime soon. When the pandemic ends, demand will pick up and that in turn will feel inflation. By then, central banks will be behind the curve and inflation will get away from then. Financials, resource stocks and cyclicals will benefit from this scenario (see his top picks).
Unknown
BUY
Has owned this in the $60s, because he likes to buy cyclicals when they are out of favour. During the pandemic, the feeling was that people won't drive, but he thought that people would need cars to go to the store and won't ride the subway. He's always liked Magna. Near-term, the chip shortage is limiting production, so this will impact Magna, but it's a short-term problem and a buying opportunity.
Automotive
BUY

CN vs. CP It's surging today. Rails are good--they are the economy. CN is more of a commodity shipper and commodities are in demand. Both CN and CP will be hit by the weak grain harvest from lack of rain. He hopes CN wins the battle for KSU. (Didn't comment much on CP.) There is integration risk in buying KSU and they will need to borrow money to close the deal, but this is a short-term problem and it's worth building a network to Mexico.

Transportation
DON'T BUY

Fundamentals are strong, but not reflected in the stock price MFC chooses to invest most of its cash to growing its Asian business. He sold his holdings around the 2008 crash and bought SunLife instead, because they were too risky among the insurers, then MFC de-risked too much after the 2008-9 recession. If interest rates rise, he'd rather be in SunLife or Great-west Life. MFC volumes are high, because it is the biggest lifeco in Canada. He prefers SunLife.

insurance
BUY
A Danish drug company that makes insulin. He likes the pharma stocks, though have been underperforming. He owns many pharmas, but you can't own all of them.
biotechnology / pharmaceutical
DON'T BUY

He owned Power Financial for a long time, but not POW. All financials plunged in 2008, but POW has never really come back. However, recently, the stock is doing well after investing in tech including Wealthsimple (a smart investment). If you want to own Great-West Life, buy it directly and not trough POW.

mngmnt / diversified
DON'T BUY
It's gotten into the refining business in BC and bought many gas stations in Canada and the US. Their business depends on volumes of gas sold and convenience store sales. Refining margins have been poor but showing improvement. EVs are a worry; will PKI offer charging stations. For now, stay on the sidelines until refining margins improve and more people drive.
merchandising / lodging
DON'T BUY
He bought this in April 2020 as a reopening stock, but it didn't pan out. Volumes didn't pick up, not even drive-thrus, and revenues haven't risen much, though margins have. They also enjoy real estate gains. Still, it didn't bounce back as expected, and didn't gain market share.
food services
PAST TOP PICK
(A Top Pick Mar 12/20, Up 54%) It was yielding 7% at the time he bought and new projects would fuel growth. If nothing, he would earn 7%. He was early; the yield eventually hit 9%, but they will increase the dividend every year. He expects line 3 to be completed. They're the biggest pipeline company in North America. A great stock.
oil / gas pipelines
PAST TOP PICK
(A Top Pick Mar 12/20, Up 36%) A world-class vaccine-maker. He likes pharmas going forward. SNY is facing a patent cliff, but have bought and are developing new drugs to solve this. He's happy to own and buy this.
Pharma & Healthcare
PAST TOP PICK

(A Top Pick Mar 12/20, Up 62%) It's the ultimate value stock. They're big in financials, rails and cyclicals, but their biggest holding is Apple. An interesting mix of holdings here. This is a no-brainer. True, Buffet and Munger won't be there one day, but how much input do they have day-to-day? He's confident that BRK will carry on.

insurance
BUY

He likes the telcos and prefers BCE. Telcos pay big yields, are stable yields and enjoy an oligopoly in Canada. Shaw is selling to Rogers (pending approval). Quebecor wants spectrum outside Quebec. And all companies are investing heavily in 5G. Once this is complete, the telcos will be golden. He loves this space. Telus is good, but lacks the media assets of BCE, which is a disadvantage.

telephone utilities
BUY

Question about Telus He likes the telcos and prefers BCE. Telcos pay big yields, are stable yields and enjoy an oligopoly in Canada. Shaw is selling to Rogers (pending approval). Quebecor wants spectrum outside Quebec. And all companies are investing heavily in 5G. Once this is complete, the telcos will be golden. He loves this space. Telus is good, but lacks the media assets of BCE, which is a disadvantage.

telephone utilities
BUY
Cyclicals and resource stocks will continue to do well. Worries of China slowing triggered a sell-off but these stocks are coming back. RIO is global with assets in investor-friendly countries. He likes their asset mix. The dividend is safe, but beware of withholding taxes on this. He's still buying this.
other mines
BUY
A steelmaker, and steel prices are hot. There are supply issues with steel, so now is a golden time to own STLC. Steel stocks haven't corrected like mining stocks, so maybe a correction will come. These are trading stocks, not long-term holds.
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