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Stock Opinions by Paul Gardner, CFA

COMMENT
Markets on a sugar high? You could claim that almost every asset is in a bubble. The system is awash with cash. Economy needs a lot of momentum before the Fed and BoC start withdrawing liquidity. A 0% interest rate distorts asset prices and everything is going up aggressively.
Unknown
COMMENT
Any stable place in the market? He tends to be more value based and looks for a consistent dividend. The energy patch is hated, but it has a yield, and profits and free cashflow are fantastic. The sector is ripe for a re-rating. Manufacturing and production costs were cut, and they now have a good profit margin with the cost of oil.
Unknown
COMMENT
Bonds. Bond market is almost uninvestible, but you should allocate a portion of your portfolio to it. Focus on short corporate credit, under 3 years. No long credit securities. He also has a position in real return bonds. See his Top Picks today.
Unknown
SELL
US-domiciled REIT that trades in Canada, anchored by grocery stores. Defensive. Missed last quarter, but not a big deal. In the right spot. Small market cap, so a liquidity issue. Buys good assets. Cheap valuation. He sold when it moved up.
REAL ESTATE
BUY
What they lend to is incredibly stable. Good operators. Perfect vehicle for TFSAs or registered accounts. Trades slightly above NAV. Yield of about 7%.
Financial Services
SELL
It's all about timing in the cycle. He'd be a seller now, not a buyer. Housing is cooling in the US, and we'll probably see that in Canada. This will be hit. Good operator, expanding. Time to be more defensive.
REAL ESTATE
BUY

Incredibly cheap. Nat gas is pressured higher now. Inventories are at near lows. Best in show. TOU is too expensive, so ARX gets his vote.

oil / gas
WEAK BUY

Alberta power market fundamentals have improved and benefited CPX. Transitioning aggressively to sustainability. Wind at its back. Cashflow increasing. Valuation consistent with peers. Trying to be carbon-free by 2040. You can't own them all, so he owns AQN, EMA, and BEP.UN instead.

electrical utilities
SELL
Sell banks to capture capital gain? The bigger question is what is your view on the banking sector. You always have to own some of the banks, as they're such a large part of the economy and the index. You need to compare tailwinds and headwinds. Bank earnings were, for the most part, just phenomenal. Tailwinds include Liberals' proposed tax and low interest rates. Cooling in the housing market would affect income from mortgages. As a sector, he thinks they've gone a long way so he's not that excited about them. He'd be cautious on financials.
Unknown
WATCH
Industrial and multi-apartment REITs were beneficiaries of the pandemic. Good assets. Great demand. As it's already done so very well out of the pandemic, he's waiting. He's been shy to own the Dream stocks because he prefers when management is incentivized by profitability.
REAL ESTATE
PAST TOP PICK
(A Top Pick Apr 08/21, Up 4%) Protects you from inflation. Good for DIY investors, as the underlying bonds themselves are so illiquid. Great way to get into the bond market. Believes inflation is transitory, but not with high conviction, so he's happy to own this.
E.T.F.'s
PAST TOP PICK
(A Top Pick Apr 08/21, Up 3%) Best operator out there. Seem to be going quite well. Leasing at higher prices. Their space is designed for the small business owner. We're heading to a hybrid model of home/office work.
investment companies / funds
PAST TOP PICK
(A Top Pick Apr 08/21, Up 27%) A star performer over the last 6 months. Still room to go. Margins of Shopper's DM are compelling at close to 40%.
food stores
WEAK BUY

Cut dividend. Fort Hills has been delayed. Cut operational expenses. About 1B in free cashflow. Still trading cheap, at 4x cashflow. He owns CNQ in the space, for better risk/return. He'd be a buyer instead of a seller. Possibility of increased dividend to entice investors.

integrated oils
DON'T BUY

A premier bank. Biggest problem is heavily invested in Latin America and the Caribbean, which brings volatility. If this was a time to get aggressively with EMs, you'd lean toward BNS. As a proxy, he'd be more interested in RY and TD. The US is the highest growth economy right now.

banks
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