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Stock Opinions by Paul Gardner, CFA

COMMENT
Recession? Numbers are showing a significant slowdown as we're going into a tightening cycle. Higher chance of recession than not.
Unknown
COMMENT
How to be more defensive? At the beginning of the year, it was easy. You just went to the bond market for protection against a slowing economy and volatile equity markets. But that didn't happen. Both bond and equity markets went down together, by 5-10%. It's been 100 years since a bond market has acted in that way, and it has a lot to do with inflation. He's more confident that the bond market is settling down. Early days, but we're seeing the heights of inflation modelling, though he doesn't have a high conviction on this.
Unknown
COMMENT
Is there value anywhere? Sounds crazy, but energy and commodities still show significant value. The sectors were starved for capital, but the underlying product is up 4x. When oil is this high, the CAD should outperform, and it is outperforming all other currencies except for the USD. Oil sector has tremendous free cashflow. We're maybe 2/3 done in terms of share price appreciation, with another 1/3 still on the table. So you should still hold those types of assets. With everything else, it's hard. Growth has problems. At this point, some tech stocks are showing terrific value.
Unknown
WAIT
At this point, no, though they have good assets. Good at what they do. Valuation is high. The theme of owning rentals has fully matured. CAD strength is a headwind. Well run. Small cap, good job of growing.
REAL ESTATE
DON'T BUY
Cut dividend by 50%. In midst of restructuring. Just bought Cominar's portfolio. Execution risk is very high. Occupancy levels below 90%. Missed on analysts' estimates. Lots of retail. Stay away and see what happens.
property mngmnt / investment
BUY
Large capex spend this year will finally finish fibre to the home, a tremendous advantage over cable. Good job in wireless. Trading high. Likes long-term vision, assets, management. Defensive in this environment. Yield of 4.5-5% is going to increase.
telephone utilities
DON'T BUY
Sold because the apartment rental theme going into the pandemic had run its course. Higher utility costs, but lagging on increasing rents. Provincial rent control. Need large scale to counteract margin compression. Excellent managers. Valuation high.
property mngmnt / investment
COMMENT
REITs vs. Canadian banks Both benefit and get penalized from higher interest rates. Banks generally do better with higher interest rates because of higher net interest margin. Banks are in a good position. Problem is growth potential is being stymied because housing market will slow down. Canadian consumer is leveraged out, and banks will be dealing with defaults. For REITs, being punished by higher rates and valuations make them less attractive. Going forward, he'd rather buy REITs. Banks are vulnerable from a recession and a cooling housing sector. Banks really enjoy a steepened yield curve, but the curve is flat. Banks are down 2.5-5% YTD.
Unknown
PAST TOP PICK
(A Top Pick Apr 08/21, Up 68%) A pandemic stock. Spectacular numbers, strong underlying margins. A leader, despite upcoming cost pressures. Trades at a discount to MRU. Still likes it, but ran its course for him. Cost inflation helps them. Shoppers has done well.
food stores
PAST TOP PICK
(A Top Pick Apr 08/21, Down 7%) Underlying bonds are illiquid and tied to a high duration. Should do better this year, as long rates will stay stable or drop, but inflation will be sticky.
E.T.F.'s
PAST TOP PICK
(A Top Pick Apr 08/21, Down 4%) Very specific and good at what they do. Unique assets that tie in to smaller businesses like tech firms. Management's one of the best. "The Well" is leased up completely, and will add to earnings.
investment companies / funds
DON'T BUY
Likes the industrial REITs through and post-pandemic. Great assets. Problem is valuation, plus he's never like the external management contract. See his Top Picks.
REAL ESTATE
BUY on WEAKNESS
Great defensive company. Subscription-based services to legal, accounting, and tax. Even in a recession, those sectors need access to data to do their jobs. It's all about owning it at the right price. Strong numbers last quarter. Always trades expensively. Intellectual assets have high returns with low capex. Not a bad entry here around $125. Consistent EPS growth. He's looking at it.
publishing / printing
WAIT
He owns the bonds. Retail nature doesn't fit his criteria. One of the better retail assets out there, anchored by WMT, a very strong tenant. Adding condos, rentals, and developments. He's hesitant to get back into retail. Not a bad entry point.
investment companies / funds
DON'T BUY
High governance. Hurt by higher utility prices and its high valuation. Rent growth is growing, but this will take a while. Higher interest rates will take their toll. His proxy is KMP.UN, focused in Nova Scotia, with a growth profile of immigration coming into Halifax.
investment companies / funds
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