Opinions by Michael Simpson, CFA | StockChase
1046
Michael Simpson, CFA

Senior Vice-President

ON STOCKCHASE SINCE Oct 2005

Sentry Investments
The Exchange Tower130 King Street West, Suite 2850Toronto, ONM5X 1A4
T: 416-861-8729 F: 416-364-1197 info@sentryselect.com
http://www.sentryselect.com/


Opinions by Michael Simpson, CFA


Signal Opinion Expert Chart

2017-09-07

N/A
A Comment -- General Comments From an Expert 

Markets.  We are coming off two emergency cuts in interest rates.  The Canadian dollar keeps getting stronger and it acts as a headwind to the economy.  The CAD$ has appreciated about 11% from its lows.  There are oil companies selling out of the oil sands.  Some Canadian companies have the ability to grow their dividends, so not all dividend companies are created equal.  If you can grow higher than the rate of inflation then you have a good Dividend.  Canadian banks had a good run from their lows.  It may attract global investors.  Toronto and Vancouver housing markets are markets unto themselves.  No other country has ever engineered a soft landing.  Job creation is about small businesses.  Our unemployment rate is higher than the US. 

Michael Simpson, CFA

Senior Vice-President, Sentry Investments

Price: $0.020
Owned: _N/A

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2017-09-07

HOLD
Ag Growth International Inc (AFN-T)

Headquartered in Winnipeg.  They are into grain storage.  They are in the US, Ukraine and Canada.  It will continue to grow.  He would hold on to it.  They will continue to grow around the world.

machinery
Michael Simpson, CFA

Senior Vice-President, Sentry Investments

Price: $57.000
Owned: Unknown

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2017-09-07

BUY on WEAKNESS
Altagas Ltd (ALA-T)

They acquired Washington Gas and Electric.  The acquisition, when it closes in mid 2018, is weighing on the stock.  There are subscription receipts that are selling higher than the stock.  If it does not go through you get your money back.  You clip a dividend along the way.  There is a 20% chance the deal does not go through.  It is cheap compared to other companies.  He has been buying on dips.  There may be a concern that they have to raise more equity.  It is a well run company and have a history of bringing projects on time and under budget.

oil/gas
Michael Simpson, CFA

Senior Vice-President, Sentry Investments

Price: $27.650
Owned: Yes

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2017-09-07

DON'T BUY
Allied Properties REIT (AP.UN-T)

Industrial, office and retail.  They expanded into the US.  There was a little selloff with the raise in rates.  The rest of the rate increases are baked into the stock price.

investment companies/funds
Michael Simpson, CFA

Senior Vice-President, Sentry Investments

Price: $38.400
Owned: Yes

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2017-09-07

PAST TOP PICK
Brookfield Asset Management (A) (BAM.A-T)

(Top Pick Aug 17/16, Up 17.91%)  Very stable assets.  They have a good track record of raising cash to pay for acquisitions.  It is incredibly well managed.  They have a contrarian bent as they are going to places like Brazil where they can work it out and get better returns after fixing a high quality asset. 

management/diversified
Michael Simpson, CFA

Senior Vice-President, Sentry Investments

Price: $47.110
Owned: Yes

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2017-09-07

BUY
Cineplex Inc (CGX-T)

It has come down dramatically, as it is the worst in 20 years for a movie slate.  He bought aggressively.  They have a 72% market share in Canada and are diversifying.  Hollywood has to stop serving dog food and bring back caviar.  2018 should be a better year for movies.

other services
Michael Simpson, CFA

Senior Vice-President, Sentry Investments

Price: $38.030
Owned: Yes

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2017-09-07

PAST TOP PICK
Cigna Corp. (CI-N)

(Top Pick Aug 17/16, Up 39.68%)  A US based health insurance company.  The news was that last year Anthem had made an offer for them, but he thought the takeover would not go through.  There is a large break fee for the deal not going through.  He thinks going forward they will buy back stock, invest and raise their dividend.  It is another well run story.

Financial Services
Michael Simpson, CFA

Senior Vice-President, Sentry Investments

Price: $184.980
Owned: Yes

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2017-09-07

DON'T BUY
Corus Entertainment (B) (CJR.B-T)

They bought assets from Shaw earlier this year.  Going forward cost synergies have been taken out, but he wonders where the growth will come from.  Last quarter was good, but they need to pay down debt.  The 8.2% yield could be questioned if revenue slowed down.  We need to see organic revenue growth.

entertainment services
Michael Simpson, CFA

Senior Vice-President, Sentry Investments

Price: $13.760
Owned: No

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2017-09-07

TOP PICK
Cinemark Holdings (CNK-N)

It could just as easily have been CGX-T.  CNK-N has assets in South America as well as the US.  It trades at a lower multiple than CGX-T.  We will get a better slate of movies for 2018.  They are going into the luxury theaters.  In Brazil you can raise your prices even when attendance is flat.  It has a 3.4% yield and he thinks that is decent.  They have the ability to grow and raise the dividend.  (Analysts’ target:  $44.00).

Consumer Products
Michael Simpson, CFA

Senior Vice-President, Sentry Investments

Price: $32.290
Owned: Yes

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2017-09-07

DON'T BUY
Canwel Building Materials Ltd. (CWX-T)

[Caller concerned about over 9.2% dividend]. They are a distributor of wood products in Vancouver.  They acquired a distributor in Hawaii.  The issue is with the debt levels and payout ratio.  There are onetime events like weather events in their favour.  But until the debt and payout ratio comes down he would not own it.

wholesale distributors
Michael Simpson, CFA

Senior Vice-President, Sentry Investments

Price: $6.090
Owned: Unknown

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2017-09-07

TOP PICK
Enbridge (ENB-T)

A 4.8% yield.  Some energy infrastructure companies are way out of favour.  They can grow their dividend 10-12% over the next 4 to 5 years.  82% payout and it is not being reflected in the market.  It is a dividend champion.  A stale, low volatile stock.  (Analysts’ target: $62.00).

oil/gas pipelines
Michael Simpson, CFA

Senior Vice-President, Sentry Investments

Price: $49.230
Owned: Yes

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2017-09-07

BUY
Evertz Technologies Ltd. (ET-T)

Hardware for the broadcasting industry.  A very good operation.  There is no debt and they have a history of paying special distributions as well as raising the dividend.  They have a yield of 3.5 to 4% and it is a very well managed company

electrical/electronic
Michael Simpson, CFA

Senior Vice-President, Sentry Investments

Price: $18.520
Owned: Yes

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2017-09-07

STRONG BUY
Fortis Inc. (FTS-T)

Rising interest rates traditionally have a negative impact on them, but they have the longest streak on the TSX of raising their dividend.  It negates some of the small rise in interest rates.  They have some non-regulated assets.  He likes it and it is a core holding for him.

electrical utilities
Michael Simpson, CFA

Senior Vice-President, Sentry Investments

Price: $45.490
Owned: Yes

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2017-09-07

DON'T BUY
Hardwoods Distribution (HWD-T)

It has a 1.5% yield.  They distribute the end products that go into boats, RVs and kitchen cabinets.  It is tied to the housing cycle and the demand for RVs and other luxury items.  He would be more comfortable with pure play lumber stocks. 

merchandising/lodging
Michael Simpson, CFA

Senior Vice-President, Sentry Investments

Price: $19.500
Owned: Unknown

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2017-09-07

WATCH
Inter Pipeline (IPL-T)

Lots of conventional as well as oil sands pipelines.  They may invest in a plant in the West and that might require some raising of capital.  Their part of the logistics chain is vital to move products to market.

oil pipelines
Michael Simpson, CFA

Senior Vice-President, Sentry Investments

Price: $22.870
Owned: Unknown

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