Opinions by Nick Majendie | StockChase
357
Nick Majendie

Director & Senior Portfolio Manager

ON STOCKCHASE SINCE Aug 2007

Scotia Wealth Management
Suite 1100, 650 West Georgia SVancouver, BCV6B 4N9
T: 604 661 1522 F: (604) 661-7494 nick_majendie@scotiamcleod.com
http://www.majendiewealth.com


Opinions by Nick Majendie


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2017-09-19

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A Comment -- General Comments From an Expert 

Market. Last year, Canada was the best performing of all the developed nations in terms of our equity market. This year it is very definitely the other way. The big question is, where do we go from here. He is optimistic on the Canadian market over the next 6-12 months, principally because he is convinced we will see an improvement in oil prices that will help the energy sector. If you adjust for the change in our currency, performance has been just about the same to a Cdn$ investor as the S&P, despite the TSX lagging the S&P 500. Thinks we will see definite signs of the oil market tightening in the 4th quarter, and can see it hitting $60 in the next 6 months. Some of the numbers in the US are understated, and are constantly being revised. A very critical point was yesterday when Brent demonstrated backwardation for the 1st time since 2014, which means hedge funds will begin to look at taking long positions if that continues. He likes Canadian bank stocks very much, and is overweight in them. Results have been very good year to date. They are cheap relative to US banks, and represents good value.

Nick Majendie

Director & Senior Portfolio Manager, Scotia Wealth Management

Price: $0.020
Owned: _N/A

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2017-09-19

HOLD
Agnico-Eagle Mines (AEM-T)

He really likes management. They’ve done an excellent job over the last number of years of increasing production per share and cash flow per share, largely from internal organic growth. Has a good growth profile over the next 5 years. His only problem is that valuation is relatively quite high at the moment, although it deserves it. (See Top Picks.)

precious metals
Nick Majendie

Director & Senior Portfolio Manager, Scotia Wealth Management

Price: $58.250
Owned: Unknown

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2017-09-19

BUY
Algonquin Power & Utilities Corp (AQN-T)

Canada has done an extremely good job of acquiring companies in the US in the utility sector. Something like 70% of this company’s earnings comes from the US. Management has done an excellent job. They have a target of increasing their dividend 10% per year over the next 5 years, and possibly longer. Dividend yield of 4.6%.

electrical utilities
Nick Majendie

Director & Senior Portfolio Manager, Scotia Wealth Management

Price: $12.960
Owned: Yes

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2017-09-19

PAST TOP PICK
Brookfield Infrastucture Partners (BIP.UN-T)

(A Top Pick Sept 21/16. Up 28%.) Just did an equity issue because of a huge backlog of projects, about $2.5 billion. If he had to pick one stock to own over the next number of years, it would be this. They increased their dividend over 10% for the last 8 years, and expects they will continue to do that. The #1 infrastructure stock globally. Dividend yield of 4.1%.

INDUSTRIAL PRODUCTS
Nick Majendie

Director & Senior Portfolio Manager, Scotia Wealth Management

Price: $53.850
Owned: Yes

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2017-09-19

BUY
Bonavista Energy Corp (BNP-T)

Management has done a very good job of concentrating assets in their 2 key areas. Had some nervousness over the balance sheet, but that is improving. He is a little more bullish on oil, than natural gas, but he would buy this today. (See Top Picks.)

oil/gas
Nick Majendie

Director & Senior Portfolio Manager, Scotia Wealth Management

Price: $2.920
Owned: No

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2017-09-19

BUY
Bank of Nova Scotia (BNS-T)

Hurricane impact? In the International segment, which represents just over 30% of their earnings, the Caribbean is actually quite small. The biggest exposure is Jamaica, which he doesn’t think was particularly hit. He wouldn’t be unduly concerned. He likes this bank very much at these levels.

banks
Nick Majendie

Director & Senior Portfolio Manager, Scotia Wealth Management

Price: $77.320
Owned: Unknown

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2017-09-19

BUY
Canadian Imperial Bank of Commerce (CM-T)

He would recommend this at these levels. The average multiple tends to be just short of 12X earnings for the banks. The acquisition in the US was a good move. Over time, it will make investors feel more comfortable that there is some diversification out of Canada. Feels there is some room for multiple expansion. Dividend yield of 4.9%.

banks
Nick Majendie

Director & Senior Portfolio Manager, Scotia Wealth Management

Price: $107.680
Owned: Unknown

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2017-09-19

HOLD
Canadian Natural Rsrcs (CNQ-T)

Suncor (SU-T) or Canadian Natural Resources (CNQ-T)? Both companies, relative to the other stocks in the energy index, have performed pretty well. From this point on, he likes both, and is hard-pressed to tell you which one he would choose. Both have very good growth profiles. This one has made acquisitions recently. They are both very good on M&A on an opportunistic basis. Their balance sheets have been improving steadily. Because they have both held their ground so well, there are better opportunities in some of the intermediate space, in terms of capital gains.

oil/gas
Nick Majendie

Director & Senior Portfolio Manager, Scotia Wealth Management

Price: $40.490
Owned: Yes

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2017-09-19

COMMENT
Canadian National R.R. (CNR-T)

His preferred choice in rails, and his biggest investment in that sector. They have a tendency to outperform their guidance, and thinks they will do it again this year. Very strong cash flow growth. Good operating ratio performance. Because of the free cash flow growth, the dividend keeps constantly being increased.

Transportation
Nick Majendie

Director & Senior Portfolio Manager, Scotia Wealth Management

Price: $100.740
Owned: Yes

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2017-09-19

HOLD
Crescent Point Energy Corp (CPG-T)

Had owned this, but sold it at around $17 earlier this year. He was concerned about oil prices. Investors are really being careful about having good balance sheet companies. If you have some optimism on oil prices as he does, he would probably hold onto this. It has been a little unpopular with institutional investors because of all their acquisitions. There are better stocks around if you want to buy one. Dividend yield of about 4%.

oil/gas
Nick Majendie

Director & Senior Portfolio Manager, Scotia Wealth Management

Price: $9.090
Owned: No

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2017-09-19

PAST TOP PICK
Enbridge (ENB-T)

(A Top Pick Sept 21/16. Down 9%.) Out of favour and is not quite sure why. During this time, they did the Spectra merger. Looking at all the major energy companies globally, including infrastructure, this is now the 8th largest. It is the largest energy infrastructure in the US. Now is a very good time to be picking it up. Dividend yield of 5%, and they have a growth target of 10%-12% a year for the next 8 years. The bulk of their cash flow is covered by long-term contracts.

oil/gas pipelines
Nick Majendie

Director & Senior Portfolio Manager, Scotia Wealth Management

Price: $50.610
Owned: Yes

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2017-09-19

COMMENT
Fortis Inc. (FTS-T)

He likes this very much. They’ve done a great job in making acquisitions in the US. This is one of the dividend aristocrats of Canada. Thinks they’ve increased dividends 42 years in a row. It is not all that expensive, and is a great, long term investment.

electrical utilities
Nick Majendie

Director & Senior Portfolio Manager, Scotia Wealth Management

Price: $44.530
Owned: Yes

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2017-09-19

DON'T BUY
Goldcorp Inc (G-T)

This has been suffering. Selling at its relative valuation, a discount. A bit of a “show me” stock at the moment. Thinks management has a very good long-term plan, but investors are kind of sceptical in the short term. There are better purchases right now. (See Top Picks.)

precious metals
Nick Majendie

Director & Senior Portfolio Manager, Scotia Wealth Management

Price: $15.760
Owned: Unknown

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2017-09-19

COMMENT
Inter Pipeline (IPL-T)

Has been out of favour and is the one pipeline he doesn’t own. In the short term, it has limited growth prospects which will impact the dividend growth potential. On a 1-year basis, it doesn’t look particularly attractive relative to a Pembina Pipeline (PPL-T), an Enbridge (ENB-T) and a Trans Canada (TRP-T).

oil pipelines
Nick Majendie

Director & Senior Portfolio Manager, Scotia Wealth Management

Price: $23.810
Owned: No

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2017-09-19

COMMENT
Manulife Financial (MFC-T)

Stay with Manulife (MFC-T) or go with Toronto Dominion (TD-T)? Currently prefers banks to the lifecos. Of the 2 major Canadian lifecos, he prefers Sun Life (SLF-T), which has more consistent earnings growth ahead of them. Manulife has just changed CEOs, and thinks the street will wait to look at the execution and changes in strategy in the next while.

insurance
Nick Majendie

Director & Senior Portfolio Manager, Scotia Wealth Management

Price: $24.280
Owned: Unknown

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