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Stock Opinions by Barry Schwartz

N/A
Market. The TSX has been hitting record highs over the summer. The delta variant is weighing on the markets. We don’t go from lock-down to re-opening and it is all over. Markets and earnings will tend to go higher. Inflation is now off the table and we are now on to the delta variant. Markets climb a wall of worries but every day will not be a day of roses. We do not know the full extent of the damage done by COVID. This is a 95% amazing economy and 5% bad. He does not think the economy is in trouble but it is not going to be a straight line.
Unknown
DON'T BUY

They cut the dividend recently and announced a material transaction where they spin off their streaming assets to pay down debt. Don't ever, ever buy a stock for its dividend. You need to focus on the debt and the future of the business. He is not keen on this company. The best way to own 5G is to own AAPL-Q.

Telecommunications
BUY on WEAKNESS
He has owned it for 8 or 9 years and always thought he was too late to buy it. It has done nothing in the last year or so. Recently it spiked as they announced ramping up the number of phones they can produce in China. Profit margins are obscene and they are gushing free cash and buying back stock. Continue to buy on pull backs.
electrical / electronic
HOLD

He never sold any of the spinoffs. They have all worked out tremendously. He can't own 12 brookfields, so will probably convert back to BAM.A-T as he always likes to stay with the parent. BAMR-T have the economies of scale to do well in this business.

insurance
HOLD
Big medical supplies. They also have some proprietary parts of the business. He sold it about a month ago to buy one of today's top picks. You won't do too badly owning this going forward.
Healthcare
BUY

Canadian Banks. What a difference a year makes. Terrific return so far on the backs with no loan losses so far. As interest rates started to go higher, everyone got excited but now that story is put to bed. Canadian banks could not raise dividends or buy back stock due to COVID. It will be interesting to see what regulators will do with them now. They will trade sideways for now. His favourites are TD-T, RY-T and NA-T. They are very well run banks. NA-T is his favourite of the three as it has the greatest total return.

Unknown
STRONG BUY
Stock price falling is a feature of investing. Don’t be concerned about today's sell off. Buy on pull backs. This has been a long standing holding for clients. It is one of the world's best businesses. He feels that they will be buying back a heck of a lot of stock going forward.
Business Services
PAST TOP PICK
(A Top Pick Jun 15/20, Up 21%) It was doing quite well and then pulled back after they announced delaying their 2022 targets for guidance by a year. The CEO retired and they hired a new one who has expertise in semiconductors and the market did not like that. You have to wait three years to get one of these cars. So it must be a pretty good business.
Automotive
PAST TOP PICK
(A Top Pick Jun 15/20, Up 23%) The market was at a low multiple back when he bought it. It was trading at a huge discount to the value of its apartments and that made no sense. It is now near an all time high. The hunt for quality assets is there. This is one of the greatest assets over the long term.
investment companies / funds
PAST TOP PICK
(A Top Pick Jun 15/20, Up 44%) He admired it for years but never bought it because it was too expensive. He bought it in the meat of the pandemic because it had done nothing and pulled back. It was at a reasonable price and has now done well. Same store sales continue to grow month after month. He would wait for a pull back before buying more.
department stores
STRONG BUY

He started buying late last year and he loves the business. It was spun off from Ebay and is now much bigger than Ebay. The business continues to fire on all cylinders. It is not as big in Canada as in the US. It competes with Square but trades at a much cheaper valuation. He really likes V-N but decided to by PYPL-Q instead. (Analysts’ price target is $322.00)

0
BUY
He has not taken any profits off the table. It is involved in every single area that is growing in terms of cloud computing, software, gaming and so on. You can't run your home, home office or business without it. They continue to make smart acquisitions. He continues to buy it for new clients.
computer software / processing
HOLD

Canadian telcos are conservative. This is more defensive than other stocks. They spent a lot of money to get growth. His clients own it. You can buy this with AAPL-Q to offset it.

telephone utilities
DON'T BUY
He would leave it alone. He avoids these engineering and construction businesses. He likes solid recurring revenue in a capital-light business. It is a difficult business to project going forward. New management has done a much better job and the stock was much undervalued as we came into 2021.
contractors
DON'T BUY
There has been tremendous growth in China. It has pulled back but for him it is too confusing and we do not have the ability to understand these businesses. He will leave it alone.
0
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