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1550+ opinions with 4.81 rating (one of the best performing expert)


Stock Opinions by Christine Poole

COMMENT
Labour market -- US vs. Canada.

A January report noted that delinquencies had skyrocketed in Canada. Unemployment in Canada has been rising, just below 6% now. The rise is partly due to immigration flow. We do have job creation, but it's not keeping pace with population growth. Headwind for the job situation in Canada.

On the flip side, perhaps BOC will cut interest rates sooner than in the US. Might do this if they see economy in Canada weakening faster than in the US.

In US unemployment has been quite low, 3.9% at last reading, which is 25 consecutive months of sub-par 4% unemployment. Typically, when the economy starts to slow and a recession is perhaps coming, unemployment usually ticks up over 6%. Even the Fed yesterday when it released the dot plot, said it anticipates unemployment at just over 4%. So the Fed sees the US job market holding in relatively well.

Unknown
COMMENT
A Comment -- General Comments From an Expert
US consumer.

Americans have been drawing on savings. Rate of saving peaked during pandemic, and now drawing down to below 4%, around 3.8%. Pre-pandemic, the rate was over 5%, and the historical average is 6%. That tells you that the consumer continues to spend in the US, very important to the economy. So now the job market becomes even more important in terms of getting an income to keep spending patterns in place.

Unknown
WEAK BUY
Stantec Inc
STN vs. WSP

Likes the sector of engineering services, instead of construction. 77% of STN revenue comes from NA. She owns WSP. Nothing wrong with STN, though it's smaller. Since STN is smaller, it might be able to grow faster.

WSP revenue from NA is 50% or slightly below, so it's more global. Starting to see organic growth pick up from its bigger acquisitions in very attractive markets. Growth profile slightly better.

Both grow organically and through M&A.  Both have balance sheet support to do M&A.

consulting
BUY
WSP Global Inc.
WSP vs. STN

Likes the sector of engineering services, instead of construction. 77% of STN revenue comes from NA. She owns WSP. Nothing wrong with STN, though it's smaller. Since STN is smaller, it might be able to grow faster.

WSP revenue from NA is 50% or slightly below, so it's more global. Starting to see organic growth pick up from its bigger acquisitions in very attractive markets. Growth profile slightly better.

Both grow organically and through M&A.  Both have balance sheet support to do M&A.

INDUSTRIAL PRODUCTS
WEAK BUY
Cenovus Energy
Outlook for 6-12 months?

That's a pretty short timeframe, so where it goes could be largely determined by commodity price. Longer term, low-cost, long-life production base to draw on. In production growth phase, tailing off in 4 years. Reasonable choice.

oil / gas
COMMENT
Oil producers.

She's been out since oil peaked in 2016. Cyclical, difficult to forecast underlying commodities. Considers the producers as growth stocks, so you have to assess operations and margins on top of the commodity forecast. Makes analysis difficult.

Unknown
BUY
Aritzia Inc.

Growth stock. In-house production of its own designs. You can only buy its various brands in Aritzia stores. Very diverse audience. Huge unit growth potential in US. Boosted e-commerce during pandemic. A bet on management and continued execution on design. Historically has done well, has confidence in it going forward.

specialty stores
BUY

REIT sector has lagged with interest rates going up. Largest in Canada. Feels rental market will stay quite strong and robust. Good demand with immigration. Shortage of multi-family housing across Canada. 50% exposure in Ontario, which has rent control. Selling older properties, investing in newer and refurbishing. Yields only around 3%, but very safe, good potential for increases. Buys back stock instead of a high dividend.

Press report of offloading manufactured homes, accounts for only 5% of its business. If came through, capital would be deployed into capital recycling program to invest in more modern units.

investment companies / funds
HOLD
BCE Inc.

Income stock. Interest sensitive sector, which tends to carry a lot more debt. Paying out more than free cashflow, has been very transparent on this. Payout ratio should get below 100%, but not for a couple of years. Yield is 8.6%, doesn't think it will be cut, safe, investment-grade balance sheet.

Doesn't think company should increase dividend. Increased by 3% last quarter. She didn't think this was necessary, as yield is already pretty attractive.

Consensus is BOC will start to cut rates June 2024, and this will be good for telecom stocks in general including BCE, as cost of funding goes down. Discount rate on cashflow would also go down, so this would support valuations.

telephone utilities
DON'T BUY

Not sure all has been sorted out in the boardroom. Tends to be more levered than peers. Yield's not as high as BCE in terms of income.

Cable
BUY
Royal Bank
Favourite Canadian bank to add to a young investor's portfolio?

Always one of her top holdings. In general, Canadian banking sector is a sound, long-term investment. Diversified geographically and operationally. HSBC acquisition is very attractive, synergies, opens door to international expansion and cross-selling.

banks
COMMENT
A Comment -- General Comments From an Expert
Gold.

Just made an all-time high, took many years to surpass the prior one. Suffered in the past with thoughts that crypto was taking its place. Gold might be picking up because of deficits across the world. So hard to forecast the commodity, driven by sentiment.

Unknown
WEAK BUY
Franco-Nevada Corp.

If you want exposure to gold, one of the best investments to make in the sector. Takes royalties off the top, doesn't have to worry about operational costs of running a mine. Took a hit from Panama mine write-off.

precious metals
PAST TOP PICK
Chubb Limited
(A Top Pick Mar 21/23, Up 35%)

Very global, 40% of revenues outside NA. Very well run, very strong management. Good track record of pricing risk well, not paying more in claims than what's coming in the door in premiums. Investment income's gone up via 87% allocation to bonds.

insurance
PAST TOP PICK
Enbridge
(A Top Pick Mar 21/23, Up 3%)

Equity issue of over $4B to fund acquisitions will be dilutive until operations come online and start producing. Overhang on stock price. Rising interest rates hurt interest-sensitives' debt carrying costs, but less than 10% of debt is subject to floating rates. Trans Mountain perceived as an overhang, but delays have actually topped up ENB takeaway capacity.

oil / gas pipelines
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