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Stock Opinions by Robert Lauzon

COMMENT
The US Fed hiking rates, the Russian war and China's Covid lockdown are weighing on markets. When markets gets jittery, the Fed lowers rates, but it can't do that now, while Russia and China we can't solve overnight. Markets are gradually pricing in negative earnings growth. Typically when the US 10-year yield touches 3%, the market trades at 15.5-16x. We're close to a bottom, one or two bad days away. Blue chip stocks (pay a dividend and shares grow) have corrected 10-15% while momentum stocks fell 60% and these may not have earnings in 2023. Put those aside and buy a quality name like a bank, pipeline or Visa. He's very close to deploying cash.
Unknown
DON'T BUY
He isn't sure how secure their government contracts are or their growth rates. It is a recent IPO so it has a short track record. Unstable. He prefers Microsoft, Adobe and Servicenow.
Technology
BUY
E-commerce drives these REITs. Two weeks ago when Amazon reported, these REITS fell 20%, because Amazon said they have built enough capacity. But e-commerce still has a big runway for growth, especially Canada. The space is consolidating now, like Prologis and Blackstone, and he expects more. Rental rates of these industrial spaces continues to rise and the spaces are full. He also likes Summit REIT (he owns), and Granite. Also likes Dream.
REAL ESTATE
BUY
He holds a renewable power portfolio. He started buying this after the Texas ice storms around $17. Likes it. It has the development pipeline he likes. A smaller-cap to the green super-majors in Europe. INE has pulled back. Is a dividend grower and their operations will expand in the future.
electrical utilities
PARTIAL BUY
You can pick away at the airlines, but there are cost pressures like labour and fuel. The demand for summer travel will offset that with consumer spending their excess cash on experiences. Buy a bit now then maybe add more in June or July.
Transportation
TOP PICK
Infrastructure spun out from Tourmaline, a favourite oil company. They also derive royalties from Tourmaline's lands. It's a hybrid royalty-infrastructure company which removes a lot of the risk of an energy company. It yields 4.5% and they raise it yearly. M&A are coming, says management, perhaps infrastructure or royalties assets. He expects 10% growth + the divvy. (Analysts’ price target is $28.86)
0
TOP PICK
Low risk. WN owns the Loblaw and Shoppers Drug Mart real estate and accounts for half their earnings. A dull and boring consumer staples business. Trades at a 12% discount to its holdings in Loblaw and Choice REIT. They just raised their dividend by 10% today, though it isn't huge. They just sold their baked-goods business and sit on $3.1 billion. The family will buy a lot more shares in coming years. A well-run company. He sees a 10% rise in the share price. (Analysts’ price target is $170.38)
food processing
TOP PICK
It has pulled back with Amazon and e-commerce cooling, but they ship 90% of packages that go overnight between Vancouver and Toronto. It's a play on the Canadian economy. They can't keep up with demand. A good entry point. Shares can double in 2-3 years if we don't see a recession. CJT is adding 4 more planes in coming years, so he likes the growth outlook. (Analysts’ price target is $236.08)
Transportation & Environmental Services
BUY
It's a favourite way to play renewables. They're based in Spain though do business in the US, UK and Brazil. A global player with a lot of development coming, but faces headwinds with weaker wind speeds over the last 18 months, plus supply chain issues have delayed the build-out of their offshore wind and solar operations. Last week's quarter was fine. The world needs more energy security and greener energy, which is a plus for them.
Utilities
BUY
The world's leader in offshore wind energy, once a coal company. A Danish company. Likes it and has been buying it for over three years. Shares have slumped recently like tech stocks, down 45-50% from its high, but the stock remains high quality. He would buy this long term, given carbon targets around the world and the transition to green power this decade. The headwind is supply chain issues. (They use natural gas to generate power in Denmark). A good entry point now.
Utilities
BUY
A great proxy for the stock market, managing assets like mutual funds and ETFs, and will move up and down with the stock market. Same goes with their earnings moving up and down. Now is a good time to enter asset managers, and Blackrock is among the largest. A great entry point now. Also likes Blackstone.
Financial Services
WATCH
He used to own it to get exposure to fuel cells, but the market doesn't like high-PE names like this now. Also, their joint venture in China is delayed by supply chains and Covid. It's a leader in fuel cells using great technology, though. A higher-risk name, but it's in his bullpen so he can decide when to buy it back.
misc industrial products
HOLD
They will be the leader in ride-sharing and are growing in food delivery. Management this week says it will focus on earnings and freezing hiring, which is what the market wants. Give it two quarters to see how they progress. They have the brand, but must digest higher labour and gas costs. He expects we're reaching peak inflation which will moderate in the second half of 2022.
Technology
PAST TOP PICK
(A Top Pick May 28/20, Up 38%) Still a great stock, but he sold it recently because of valuation and price appreciation. Staples are a strong performer this year, but PEP is trading at the high end of its range. Still likes it and will buy it when defensives falls out of favour.
food processing
PAST TOP PICK
(A Top Pick May 28/20, Up 45%) A defensive. Back then, they were working on the vaccine and luckily theirs was the most effective. He trimmed at $55, but still likes and holds it. The company has in the past struggled to build a pipeline of drugs. This morning they announced they will buy a company that treats migraines. They're spending $11 billion on their pipeline, which is promising. They earned $25 billion revenues in vaccines in 2021. Pays a great dividend. Remains a core holding.
biotechnology / pharmaceutical
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