Advertising

Rating Card

Unlock Expert's Rating and Top Picks Portfolio

Become a member Or, Sign In
Latest Top Picks

Stock Opinions by Colin Stewart

COMMENT
Markets in the summer. We'll see if sell in May and go away comes true this year. Optimistic on the economic outlook. Canada has lagged the broader reopening, but now starting to see things open up. Consumers have high savings rates and want to get out and spend money. Equity markets already have the good news built in. More of a stock-pickers market, not everything is going to work. More challenging to make money going forward. Investors will have to be more selective.
Unknown
COMMENT
Gambling mentality. Speculative activity is one of the risks to the outlook. Currently contained to areas such as SPACs, crypto and hot IPOs. Meme stocks such as AMC are concerning. These times of speculative activity usually don't end well and someone is left holding the bag. Investors need to be wary. Ask what's driving a stock, fundamentals or speculation?
Unknown
HOLD
High quality. Focused on defense. Nothing wrong with it. 11x enterprise value to EBITDA. Nice dividend of 2.6% or so. Large company, steady outlook. Not expecting huge growth, pretty modest over next couple of years. You can hold it for the yield.
Transportation
DON'T BUY
He's cautious on airline stocks. Misconception that if the stock is down a lot, it's undervalued, and there's a lot of catch-up. He's positive on the reopening. But the enterprise value of the business is back to pre-pandemic highs. Issued a lot of debt and equity, resulting in an expensive valuation. Look elsewhere, perhaps to aerospace.
Transportation
HOLD
Pretty steady, long-term position. Steady pipeline business, nice dividend. Revenues guaranteed by long-term contracts. Good dividend history. Uncertainty in the near term. Good one to hold long-term in a TFSA.
oil / gas pipelines
BUY
Recent acquisition will help them transform to a faster growth company with more customers, recurring revenue from SaaS, and US exposure. Likes management. Main reason share price has pulled back is the correction in growth stocks. Looks cheap here, and he's been adding at these levels.
Telecommunications
BUY
Likes it. Correction in last 4 months has hit the sector. Robust outlook for the next 5 years. Solid management team. Expects continued growth and perhaps increases in dividend. Adding at these prices makes sense.
electrical utilities
BUY
Higher risk, as it's based in Nicaragua. Outlook is positive. Discounted valuation compared to larger peers. Astute management. Over time, should grow and diversify geographically. Price pullback due to pullback in the renewable sector plus uncertainty in Nicaragua. Cheap, nice yield, could be a takeover candidate.
INDUSTRIAL PRODUCTS
PARTIAL SELL
High likelihood of the deal going through. If the deal doesn't go through, would have fairly significant downside. One strategy might be to sell a partial position, and put in another telco. Canadian telcos are steady businesses, modest growth, nice dividends.
Cable
WATCH
Fantastic service for consumers. Overall outlook is good. A reopening play. Caveat is that it's not making money. He's watching it, and once it's profitable, he'd consider investing.
Technology
PAST TOP PICK
(A Top Pick Mar 17/20, Down 17%) Really well run. Benefited from pandemic trends. Pulled back because of fears it can't replicate those results. Good long-term business, strong balance sheet, good management. Next leg up will probably be making an acquisition. Price is good value here.
investment companies / funds
PAST TOP PICK
(A Top Pick Mar 17/20, Down 6%) Plant-based area has earned a lot of attention. Unfairly penalized for the slower ramp up of meat alternatives. Trades at only 7x EBITDA, without the plant-based component. If the plant-based sector was spun out, share price would easily be over $40. Be patient, a ton of value, core business is strong.
food processing
PAST TOP PICK
(A Top Pick Mar 17/20, Up 0%) New CEO last year who's doing things to accelerate the business, which he sees as positive. SaaS for the education sector. Trying to grow organically and by acquisition. Low valuation. Optimistic over the next few years.
Business Services
WAIT
Well run. Benefited during the pandemic. Stepped up their online game. Online demand will continue. Tough comparisons to last year. May be better to wait and see how investors react over the next few quarters. Not huge downside, but more of a wait and see.
food stores
HOLD
Really likes the business. Land registry technology in Saskatchewan, a monopoly position. Provide services globally. Earnings and EBITDA have grown, so there's been multiple expansion. It's a comparably cheap stock, nice dividend, tons of free cash. Opportunities to make acquisitions. Long-term outlook is very good.
0
HOLD
Massive investment in Asia is one of the positives. Long-term opportunity is good. Interest rate sensitivity of the lifecos can have a magnified effect the stock price. As a long-term investor, don't worry about this.
insurance
COMMENT
US homebuilders. US homebuilders have done very well, with increased demand, housing starts and prices. Not clear how persistent the trend to move out of the cities will be. But overall, the trend to more single family homes will play well for them. If there were a pullback, he'd look at companies like TOL and LEN.
Unknown
DON'T BUY

BMO vs. RY He'd favour RY over BMO. BMO has a large franchise in the US midwest. RY is more active in the east and south. RY is better managed, and that's why it has a higher valuation. Won't go too far wrong owning RY. RY is well positioned with their US footprint, as well as being the largest and most dominant player in Canada.

banks
BUY

RY vs. BMO He'd favour RY over BMO. BMO has a large franchise in the US midwest. RY is more active in the east and south. RY is better managed, and that's why it has a higher valuation. Won't go too far wrong owning it. Well positioned with their US footprint, as well as being the largest and most dominant player in Canada.

banks
TOP PICK
Canadian-based aerospace, in both defence and commercial. Commercial came under pandemic pressure, but defence performed well. Last year, it had close to record profitability and strong free cashflow, using it to reduce debt. Steady and quality business. A reopening play. Discounted valuation. Well managed, strong balance sheet, chance for acquisitions. No dividend. (Analysts’ price target is $21.92)
misc industrial products
TOP PICK
Distributes automotive parts and industrial paint. Suffered during pandemic. Will benefit from increased driving post-pandemic. New CEO is well respected, paid down debt. Cheap valuation. A good turnaround play. No dividend. (Analysts’ price target is $17.80)
wholesale distributors
TOP PICK
Global seller of farm equipment. Well run. Strong crop prices benefit them, as farmers have more money to replace farm equipment. Attractive valuation, positive demand outlook. Yield is 1.60%. (Analysts’ price target is $55.75)
machinery
COMMENT
Is there too much euphoria in the market right now? A mixed bag. Economic outlook very strong with people getting vaccines, economy reopening, pent-up consumer demand. Market's had a good run. Pockets (tech, in particular, and speculative areas) are showing some froth. Up to investors to pick the right securities in the right sectors. Value-based, cyclicals will benefit. Some the of high flyers from last year can take a step back.
Unknown
COMMENT
Which economically sensitive cyclicals look most promising? A wide range. Canadian commodity companies (copper mining, steel, agriculture). What's good for commodities is good for the Canadian equity market.
Unknown
COMMENT
Are rising bond yields spooking you at all? Something to be aware of and a little bit cautious. The most highly valued areas, such as tech, and speculative areas are most susceptible to the rising rates. Bond yields moving up sharply has made some of the high PE stocks quite vulnerable.
Unknown
SELL
Market's pleased with recent results, dividend increase, special dividend, 2021 guidance. Still good value. A valuable asset. Challenge is that coal is viewed negatively from an environmental perspective. So what's the long-term viability? Speculation if coal could be replaced by shipping other commodities. He sold.
INDUSTRIAL PRODUCTS
DON'T BUY
Canadian success story. Health technology play. A popular stock. Be cautious because of the valuation. Debatable if recent acquisition will be accretive. Trades at 35x forward EBITDA, so quite expensive.
Healthcare
HOLD
Very well run. Fundamentals in the P&C insurance industry are very positive. It's a "hard market", so they're enjoying significant price increases and more volume across different lines of business. Currently making a pretty significant acquisition.
insurance
PARTIAL SELL
Very well run. Outlook for renewable power is very strong over the next 5-10 years. NPI has opportunities to grow further. Stock's run up. Bond yields moving up tends to put pressure on utilities that have a strong dividend yield. If you've had a gain, consider taking money off the table and selling 1/3 of your position. It won't get back to last year's lows.
Utilities
COMMENT
CAD vs. USD CAD has strengthened recently. One of the better currencies globally in 2021 against a weaker USD. Could be related to energy prices picking up or that there's a cyclical trade underway, commodity prices improving, more US investors moving assets to the Canadian market. He worries a bit longer term. US is in better shape than Canada in terms of the consumer, economic reopening, GDP outlook, debt-to-GDP levels. Unlikely CAD goes back to par. If CAD goes up to 85-86 cents, he'd consider moving some assets back to USD.
Unknown
PARTIAL SELL
Very well managed. Stable, resilient, long-term business. Recently got into iLottery, a growth area. PBL has become a leader in that business, and that's part of the reason for its big run. He sold part of his position, based on valuation. Still likes it long-term. Excellent company.
INDUSTRIAL PRODUCTS
PAST TOP PICK
(A Top Pick Jan 27/20, Up 66%) Very high quality business, and it's been growing. Acquisition in 2020 was quite attractive. Earnings last night very strong, beating estimates. A lot of free cashflow. Despite the run, still cheap. Easily upside to $30-35 over time. Yield is about 3.5%.
0
PAST TOP PICK
(A Top Pick Jan 27/20, Up 16%) Tough couple of quarters during Covid. Strong management, cut costs. Last quarter, pretty strong EBITDA numbers. A consolidator, so might do future acquisitions.
0
PAST TOP PICK
(A Top Pick Jan 27/20, Up 109%) He sold, albeit early. A commodity, so can be cyclical. Demand continues to be strong in NA, with tight market supply.
west coast forestry
BUY
Unified communications industry. A nice move late last year. Recently announced a pretty large acquisition, which brings up percentage of recurring revenue. Will turn out to be a good acquisition. Good entry point here.
Telecommunications
BUY
Outlook is fantastic. Stock's done well. Very efficient manufacturing. Recent expansion. Has won contracts to produce and package for other companies, and there's room to grow. Well run, high insider ownership. Still good upside.
breweries / beverages
WATCH
Great company, has gained market share. Benefitted from Covid. Very strong same store sales for 2020. Probably not repeatable for 2021, so stock's pulled back. Not cheap. Watch and see how it performs as the economy opens. Consumer spending patterns might change.
department stores
HOLD
Recent pullback just part of the general tech pullback. Not as cheap as it once was, but relative to some of its peers, it's reasonably valued. Dominant franchise. Phenomenal long-term company. If you've had significant profits, you may want to take some off the table, but a great long-term hold.
computer software / processing
WATCH
Mixed track record with production challenges, debt. Recently there's been optimism around EVs, and NFI is one of the larger companies to participate in the trend. Electrification is a small portion of their business, and there are some growth opportunities. Dividend is probably sustainable. He'd want to see more consistent performance before buying.
Automotive
BUY
Positive, long-term dynamics. IVF is becoming more accepted and more subsidized. Outlook is very positive. Still likes it at these prices. As a small cap, can be volatile. Might make some acquisitions to further consolidate supply, which would be a positive catalyst for the share price.
0
TOP PICK
Huge range of products. Great long-term track record of making acquisitions, healthy balance sheet. Poised to grow, especially with healthcare as a growth area. Significant insider ownership. Yield is 1.87%. (Analysts’ price target is $86.00)
investment companies / funds
TOP PICK
Meat segment has been doing well. Plant segment is a new and emerging area, and is #2 in NA. Trades at a significant discount to peers. Could easily be worth more than $40 a share. Yield is 2.62%. (Analysts’ price target is $35.19)
food processing
TOP PICK
Provides enterprise resource planning, mainly to governments and not for profits. New CEO's mandate is to focus on growth. Very high margin structure. Generates a lot of free cash. Trades at only 12x EBITDA, almost a value play tech company. Yield is 4%. (Analysts’ price target is $15.38)
Business Services
N/A
Market. 2021 will differ from 2020 because 2020 had an unprecedented volatility in the markets. We will see a re-opening of the economy as we get a large portion of the population vaccinated. We will see a re-allocation of spending away from the stay-at-home paradigm. He believes a large portion of the workforce will be back in the office by the end of 2021. He is not touching cruising and airline companies. These will be the last to recover. Restaurants and hotels will really benefit in 2021 as the economy re-opens.
Unknown
DON'T BUY
It is a really well run company. It is a dominant player in the toy industry. The business is very lumpy month to month, year to year. Kids are sending more time on-line and not playing with toys.
0
PARTIAL BUY
He thinks it is an opportunity and he just bought a position. It is down significantly from mid-last year. It was beat up for what he thinks are temporary reasons. He thinks this will pass but there could be some downside in the near term.
0
BUY
He quite likes the business. People have caught on to this company more recently. It is a unique play.
INDUSTRIAL PRODUCTS
BUY
The renewable space has been very hot. Over time there will be a lot more demand for renewable energy and this company will benefit.
electrical utilities
HOLD
He is pleased to see it is up today. There is a lot of concern around office real estate and the long term outlook. He thinks it is best to own the parent company.
REAL ESTATE
DON'T BUY
The dividend is probably safe. The Canadian and US banks are so cheap and out of favour that there is a lot of value to be had, but the discount on this one is not that substantial.
banks
HOLD
It is a great company and is very expensive. It is worth while holding on to it, but he has cut back on the amount as the stock has gone up.
electrical / electronic
BUY on WEAKNESS
It is a well run business and they will benefit from the growing use of data and the 5G trend. It is not overly cheap. Now might not be a bad time to look at it, though.
Telecommunications
PAST TOP PICK
(A Top Pick Dec 26/20, Up 11%) He would buy it again. As things have re-opened, the demand has come back.
0
PAST TOP PICK
(A Top Pick Dec 26/20, Up 81%) He sold mid-last year, too soon. Housing proved to be very strong. He would buy it again if lumber prices pulled back again.
west coast forestry
PAST TOP PICK
(A Top Pick Dec 26/20, Up 41%) They have a few different businesses including the land registry business in Saskatchewan. It is a very well run company. It is a top pick today. It is one of his largest positions.
0
DON'T BUY

He has a small position. It is similar to AAPL-Q. They are dominant in many of the areas in which they operate. It is not a cheap stock. But he would not bet against them.

specialty stores
BUY
It is perhaps not as exciting as some of the fast growing technology players out there. It is a very well run, steady business. It has a dominant oligopoly type of position. It pays a nice dividend.
telephone utilities
BUY on WEAKNESS
He has owned in the past and then sold it too early last year. There is a lot of good news priced into the stock but you would not want to bet against it. It would be a good opportunity to add if it pulled back for some reason.
Transportation & Environmental Services
HOLD
Over time it will come back. They have a strong position in liquor retailing and have moved into Cannabis. They are clearly going to be a survivor. They are going to be able to consolidate.
merchandising / lodging
DON'T BUY
He is cautious on the space. It will take time to figure out the long term impacts of the pandemic. It is going to take time to get back to where it once was. The question is whether business travel will ever get back to where it once was.
Transportation
Showing 1 to 60 of 1,336 entries