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Stock Opinions by Michael Decter

COMMENT
It's surprising how well markets have held up given all the uncertainty: who the Democratic nominee will be and the election's outcome, the Canadian minority government and several minority provincial ones, like BC. BC's premier is in the crosshairs, because the gasline project there is under fire. Then, there's the coronavirus and its worldwide impact. All these factors may tip us into slow growth or even recession. Recalling SARS, that lasted from November through May. Maybe that's the timeline for the coronavirus. Can we buy dips? Looking at Air Canada, the price hasn't dipped because capacity is high, given the Airbus 737 Max ban. He doesn't know how long the virus will last.
Unknown
BUY

He just bought a lot of this and likes tech, especially those that grow by acquiring like OTEX. It's been good at finding additional products to include in their packages. He likes this for the long-haul. Tech is a safe space in the coming 12-18 months. Canadian tech is cheaper than the U.S. FAANGs, though he owns Netflix and Disney.

computer software / processing
HOLD
He's long owned this. They run diagnostic imaging centres in the U.S. They charge half what hospitals do, which is attracting businesses. AKU has one big competitor in the U.S. that is twice the size of AKU. He believes the competitor will one day buy AKU. He'll wait 18 months for this take-out to happen.
medical services
DON'T BUY
Disappointing. If one chemical was working, another wouldn't. He got worn out by disappointment and sold. CHE is tied to the pulp and paper industry which has had a rough ride. Rail shutdowns won't help. Not sure if they can sustain their dividend. Pays a 14% dividend.
chemicals
PAST TOP PICK
(A Top Pick Oct 02/19, Up 32%) A Winnipeg success story in auto body shops. It branched out across Canada, then into the U.S., yet there's still room to grow.
other services
PAST TOP PICK

(A Top Pick Oct 02/19, Up 45%) There's room to own both this and Disney, which has worked out well for him. The quality of content on both streamers is phenomenal and they're global.

Unknown
PAST TOP PICK
(A Top Pick Oct 02/19, Up 7%) They reported today and miss expectations. It's a big global company. There's global demand for their medical devices; in Asia, for instance, there's rising heart disease. So, Medtronic can fulfill this demand.
biotechnology / pharmaceutical
PARTIAL BUY
They've re-focussed internationally beyond Canada, and they can expand existing pipelines, which are a little easier (getting permission) to build than brand-new ones. He's added to this recently. You can nibble into it now over, say, three weeks in three tranches.
oil / gas pipelines
BUY
He's long owned them. Their business of taking care of all the shipping paperwork (logistics) for a business is spot on. Their long-term return has been fantastic and they have a long way to go still. They benefit from the chaos in trading now (i.e. Trump's tariffs).
computer software / processing
BUY on WEAKNESS

Ranks after TD and Royal as a bank. They're in some emerging markets that make him cautious.

banks
DON'T BUY
The problem with this sector is divestment by pensions, for example, though Husky is in the top tier of companies.
oil / gas
DON'T BUY
They're definitely in China, but he doesn't know their exposure now. The really challenge is an aging population and a system that doesn't manage chronic diseases well. Be careful with Manulife, but also all insurers.
insurance
WATCH
Refunding of tariffs It's on his shortlist as he watches the forestry group. The tariffs refund are definitely good. He wants to see longer-term stability in housing starts first. Reason is that a lot of housing are steel and concrete condos, not wooden houses. The whole sector is under a cloud, though bottoming now. He'd watch this another quarter.
west coast forestry
COMMENT
He doesn't own much oil--too uncertainty. But royalty companies have some advantages and FRU is a good company. If you expect a rebound in energy stocks (he doubts it), FRU isn't a bad way to play. The dividend is relatively secure.
oil / gas
BUY on WEAKNESS
He has a positive outlook on this. He's had a great run on it. It may be toppy now, but he expects it to be higher this year, but could dip by then. Wait for a drop to get in.
computer software / processing
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