Portfolio Manager at Avenue Investment Management
Member since: Jun '03 · 1612 Opinions
A couple of years ago energy was the place you had to be, and stocks have been sliding since then. Tariffs are slowing things down and gumming up global supply chains. OPEC wants to increase production. With the oil price where it is, there isn't a lot of drilling going on.
There's too much oil right now going into the fall, but oil has a way of tightening itself up. If oil stays lower for longer, there's more drive to get that price higher later. This is the stock in Canada you want to own for sector exposure, sit and collect the dividend, and be there for when the oil price goes higher. Doesn't seem as though there's any catalyst for that to happen in the next 6 months. Yield is ~5%.
One of the fantastic Canadian compounders over time. But it will also go through periods where it can go sideways. High rate of return core business, and they're going to take FCF and possibly leverage and get even more of these businesses around the world. Seven & I deal would be great for synergies; if not, also great because they'd just buy their stock back.
Market doesn't know what to do because of all the uncertainty. Consolidating at a long-term moving average. Relatively inexpensive to historical levels. Waiting for the catalyst, but the catalyst isn't happening now. Mild consumer recession in US depending on income level, so its numbers are a bit weak right now. It'll get through this in 1-2 years, still one of his core Canadian holdings.
Over the long term, great Canadian business that's gotten really efficient about how they retail. Consumer recession might happen; not right now, but it is a concern. Incrementally, will be a better business over time. Tariffs will have an impact on some of its stuff, but which stuff and how much? If his team can't figure it out, they tend to just stay away.
Pool of money trading on the stock exchange, which they invest in short-term first and second mortgages. Can't specify a rate of return, but you get 100% of the income on those mortgages. The income you get is based on the interest rate.
The dip earlier this year on the chart was because of sentiment, as it's involved in the commercial and residential real estate market. So it traded at a big discount to NAV. Still underpriced for where it should be long term, capital gain if you're patient.
Both oil and oil in Canada are just drifting. No real catalyst imminent. Trying to restructure and clean things up, and they've been very transparent on that. Great company, high-quality business. Still great margins, throwing off lots of $$. Inexpensive; can't sit around and wait for a breakout, because when the moves come they're pretty dramatic.
He owns CNQ instead.
Harder and harder to start a new company, so consolidation makes sense. He owns CNQ, because if the market moves it'll move that name first. Anyone who wants to own WCP, owns it already. And there's no immediate catalyst to the industry. Be patient, collect the dividend, and know that it will be higher later.
Owns it just for the yield. As long as the stock doesn't go down, he doesn't expect that much from it. Should be able to clean up the business and the balance sheet, and that's happening. Seems that it can increase pricing on cell plans incrementally. Telco that's the most transparent on what's going on.