Stock Opinions by James Hodgins - Stockchase Experts
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James Hodgins @

On Stockchase since : Oct 2010

Chief Investment Officer

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Stock Opinions by James Hodgins - Stockchase Experts


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COMMENT
General Market Comment 

May 15, 2018

Overview. Interest rates are going up gradually in the States. He thinks low rates have supported the bull market in equities and he feels cautious in response to their rise. He expects two more rate hikes from the Fed this year. The Canadian 5-year rate has been dragged up by the US rate increases, and this leads to a strengthening of the dollar, which also has a tightening impact. It can take a year for the effect of an interest-rate rise to play out. For a Canadian family with a variable-rate mortgage, the increased interest rates will cost about $40 per week. Longer-term fixed rates will follow. This will have an effect on the rest of the economy. With so much consumer debt in the Canadian economy, the effect could be significant. He would avoid Canadian consumer stocks at this time.

Overview. Interest rates are going up gradually in the States. He thinks low rates have supported the bull market in equities and he feels cautious in response to their rise. He expects two more rate hikes from the Fed this year. The Canadian 5-year rate has been dragged up by the US rate increases, and this leads to a strengthening of the dollar, which also has a tightening impact. It can take a year for the effect of an interest-rate rise to play out. For a Canadian family with a variable-rate mortgage, the increased interest rates will cost about $40 per week. Longer-term fixed rates will follow. This will have an effect on the rest of the economy. With so much consumer debt in the Canadian economy, the effect could be significant. He would avoid Canadian consumer stocks at this time.

Unknown
James Hodgins

Chief Inve, Curvature Hedge Stra...

Price Price
$0.020
Owned Owned
_N/A

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COMMENT
General Market Comment 

May 15, 2018

Market-neutral investing. This involves paired trades: going long one stock that he believes will gain, while going short another that should be hurt by the same trends in the market. He believes that the market has entered a stagflationary trend rather than a disinflationary trend. This is not good for equities or for fixed income.

Market-neutral investing. This involves paired trades: going long one stock that he believes will gain, while going short another that should be hurt by the same trends in the market. He believes that the market has entered a stagflationary trend rather than a disinflationary trend. This is not good for equities or for fixed income.

Unknown
James Hodgins

Chief Inve, Curvature Hedge Stra...

Price Price
$0.020
Owned Owned
_N/A

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BUY on WEAKNESS

There’s only so many gas stations to buy. Over the past years, they have added tremendous value with prepared food in gas stations, and other services. At some point, there is a limit. The EV/EBIDTA ratio is now near the company’s 5-year low. However, the current weakness in Couche-Tard’s price might be transitory and he is interested in buying at this level. Gas retailers have a hard time when gas prices are rising quickly because it is hard to raise retail prices in line with wholesale. However, these companies make it up as prices go down, lowering rates less quickly than wholesale. He continues to be bullish on energy, which suggests further increases in gas prices and further pressure on Couche-Tard. He is looking for an entry point to buy the stock.

food stores

There’s only so many gas stations to buy. Over the past years, they have added tremendous value with prepared food in gas stations, and other services. At some point, there is a limit. The EV/EBIDTA ratio is now near the company’s 5-year low. However, the current weakness in Couche-Tard’s price might be transitory and he is interested in buying at this level. Gas retailers have a hard time when gas prices are rising quickly because it is hard to raise retail prices in line with wholesale. However, these companies make it up as prices go down, lowering rates less quickly than wholesale. He continues to be bullish on energy, which suggests further increases in gas prices and further pressure on Couche-Tard. He is looking for an entry point to buy the stock.

food stores
James Hodgins

Chief Inve, Curvature Hedge Stra...

Price Price
$53.850
Owned Owned
No

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DON'T BUY
Enbridge(ENB-T) 

May 15, 2018

In the U.S., changes in tax law for MLP’s hurt Enbridge’s ability to drop down assets into a more beneficial tax rate. In Canada, the problems of building new pipelines conflict with Enbridge’s planned future infrastructure projects. He is not worried about the dividend yield. The business would have to get a lot worse before it cuts the dividend. However, if the yield gets up to 7%, which will happen if the stock drops another 10%, he thinks the company will have to look at its yield.

oil/gas pipelines

In the U.S., changes in tax law for MLP’s hurt Enbridge’s ability to drop down assets into a more beneficial tax rate. In Canada, the problems of building new pipelines conflict with Enbridge’s planned future infrastructure projects. He is not worried about the dividend yield. The business would have to get a lot worse before it cuts the dividend. However, if the yield gets up to 7%, which will happen if the stock drops another 10%, he thinks the company will have to look at its yield.

oil/gas pipelines
James Hodgins

Chief Inve, Curvature Hedge Stra...

Price Price
$42.520
Owned Owned
No

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COMMENT
General Market Comment 

May 15, 2018

Comment on Cannabis. Cultivators are overvalued, but he sees potential in additional products and services that support the production or sale of cannabis. His is long Hydropothecary Corp. (THCX-V), which makes a spray delivery system. He is interested in the idea of companies that test cannabis products on their way to the market. He is also interested in the U.S. cannabis market because President Trump only recently came out in favour of medical marijuana and of leaving recreational use up to the states. He thinks institutional money in the US will now start to finance cannabis growers. He is long iAnthus Capital Holdings (IAN-CD) and in others just going public.

Comment on Cannabis. Cultivators are overvalued, but he sees potential in additional products and services that support the production or sale of cannabis. His is long Hydropothecary Corp. (THCX-V), which makes a spray delivery system. He is interested in the idea of companies that test cannabis products on their way to the market. He is also interested in the U.S. cannabis market because President Trump only recently came out in favour of medical marijuana and of leaving recreational use up to the states. He thinks institutional money in the US will now start to finance cannabis growers. He is long iAnthus Capital Holdings (IAN-CD) and in others just going public.

Unknown
James Hodgins

Chief Inve, Curvature Hedge Stra...

Price Price
$0.020
Owned Owned
_N/A

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COMMENT
General Market Comment 

May 15, 2018

People are looking to Shell to spearhead liquid natural gas sales from Canada. However, there are structural problems with pricing of natural gas due to the lack of infrastructure (such as pipelines). He expects Canadian natural gas to continue to be very difficult. The differential between the Alberta price (AECO) and the global price continues to increase, which will make LNG more and more attractive because it can be shipped globally. He think it is too late to short natural gas stocks. He is now looking to go long, but he things that those trades will be on the new generation of companies that rise next year.

People are looking to Shell to spearhead liquid natural gas sales from Canada. However, there are structural problems with pricing of natural gas due to the lack of infrastructure (such as pipelines). He expects Canadian natural gas to continue to be very difficult. The differential between the Alberta price (AECO) and the global price continues to increase, which will make LNG more and more attractive because it can be shipped globally. He think it is too late to short natural gas stocks. He is now looking to go long, but he things that those trades will be on the new generation of companies that rise next year.

Unknown
James Hodgins

Chief Inve, Curvature Hedge Stra...

Price Price
$0.020
Owned Owned
_N/A

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DON'T BUY

Natural gas in Turkey. He likes the management team. They went elephant hunting and they bagged the big one. He has owned this stock before, but he is concerned about the geopolitical risk, which has been playing out recently in mining stocks in Turkey.

oil/gas

Natural gas in Turkey. He likes the management team. They went elephant hunting and they bagged the big one. He has owned this stock before, but he is concerned about the geopolitical risk, which has been playing out recently in mining stocks in Turkey.

oil/gas
James Hodgins

Chief Inve, Curvature Hedge Stra...

Price Price
$5.400
Owned Owned
No

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BUY

He has a small long position in it. They had problems with an investment they made a few years ago, but it has turned around, so there is some momentum to the earnings. (Analysts’ price target is 4$)

other services

He has a small long position in it. They had problems with an investment they made a few years ago, but it has turned around, so there is some momentum to the earnings. (Analysts’ price target is 4$)

other services
James Hodgins

Chief Inve, Curvature Hedge Stra...

Price Price
$3.320
Owned Owned
Yes

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COMMENT

He owns a small speculative position. Aurora has taken a 17% position. They have an interesting cannabis oil extraction technology that uses microwaves instead of solvent. This is potentially cleaner, yielding purer oil.

He owns a small speculative position. Aurora has taken a 17% position. They have an interesting cannabis oil extraction technology that uses microwaves instead of solvent. This is potentially cleaner, yielding purer oil.

0
James Hodgins

Chief Inve, Curvature Hedge Stra...

Price Price
$1.130
Owned Owned
Yes

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PAST TOP PICK

(A Top Pick March 26, 2018. Down 16%). This initially popped higher but they preannounced a poor quarter because the market had been stuffed by a promotion. This quarter will be a little weak for the same reason but after that, it will do better. Cipher historically focused on dermatology. With their purchase of Cardiome Pharma Corp’s Canadian assets, they will now also be focused on arrhythmia and other cardiovascular conditions addressed by Cordiome’s drugs. He loves Cipher here. He thinks it is trading at half what specialty pharma companies, like Knight, sell for. He sees this as a good takeover target for Knight and sees it as a potential double.

Healthcare

(A Top Pick March 26, 2018. Down 16%). This initially popped higher but they preannounced a poor quarter because the market had been stuffed by a promotion. This quarter will be a little weak for the same reason but after that, it will do better. Cipher historically focused on dermatology. With their purchase of Cardiome Pharma Corp’s Canadian assets, they will now also be focused on arrhythmia and other cardiovascular conditions addressed by Cordiome’s drugs. He loves Cipher here. He thinks it is trading at half what specialty pharma companies, like Knight, sell for. He sees this as a good takeover target for Knight and sees it as a potential double.

Healthcare
James Hodgins

Chief Inve, Curvature Hedge Stra...

Price Price
$3.550
Owned Owned
Yes

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PAST TOP PICK
TeraGo Inc.(TGO-T) 

May 15, 2018

(A Top Pick March 26, 2018. Down 3%). This is a play on peoples’ smartphone addictions. Their main current business is a data center that provides cloud services. They also hold a number of licenses of spectrum that will be useful for the 5G expansion. Using the valuation, for its spectrum, that Comcast recently paid for spectrum, this asset brings $10 per share to the value of Terago. He still likes Terago quite a bit at this price. However, the price is based on a catalyst and it is yet to be seen how that will shake out.

Telecommunications

(A Top Pick March 26, 2018. Down 3%). This is a play on peoples’ smartphone addictions. Their main current business is a data center that provides cloud services. They also hold a number of licenses of spectrum that will be useful for the 5G expansion. Using the valuation, for its spectrum, that Comcast recently paid for spectrum, this asset brings $10 per share to the value of Terago. He still likes Terago quite a bit at this price. However, the price is based on a catalyst and it is yet to be seen how that will shake out.

Telecommunications
James Hodgins

Chief Inve, Curvature Hedge Stra...

Price Price
$5.750
Owned Owned
Yes

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PAST TOP PICK

(A Top Pick March 26, 2018. Up 18%). This is one of his biggest holdings. He thinks it is the number one takeover candidate in Western Canada.

oil/gas

(A Top Pick March 26, 2018. Up 18%). This is one of his biggest holdings. He thinks it is the number one takeover candidate in Western Canada.

oil/gas
James Hodgins

Chief Inve, Curvature Hedge Stra...

Price Price
$1.920
Owned Owned
Yes

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BUY

This is a zinc miner. His forecasts for zinc are quite bullish.  It is small, with only two operating assets, one high quality and the other less. It trades at 0.7 or 0.8 times NAV and on that basis it is getting to look quite cheap. He is looking to buy more to add to his small current position.

Mining

This is a zinc miner. His forecasts for zinc are quite bullish.  It is small, with only two operating assets, one high quality and the other less. It trades at 0.7 or 0.8 times NAV and on that basis it is getting to look quite cheap. He is looking to buy more to add to his small current position.

Mining
James Hodgins

Chief Inve, Curvature Hedge Stra...

Price Price
$1.130
Owned Owned
Yes

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DON'T BUY
Chesswood Group(CHW-T) 

May 15, 2018

They are involved in small equipment leasing, which historically has correlated with auto leasing. He is negative on the prospects for auto leasing and is concerned about the prospects for Chesswood’s funding sources. The dividend is high but the payout ratio is around 50% so he thinks the dividend is reasonably safe. However, this could come under pressure in the future.

merchandising/lodging

They are involved in small equipment leasing, which historically has correlated with auto leasing. He is negative on the prospects for auto leasing and is concerned about the prospects for Chesswood’s funding sources. The dividend is high but the payout ratio is around 50% so he thinks the dividend is reasonably safe. However, this could come under pressure in the future.

merchandising/lodging
James Hodgins

Chief Inve, Curvature Hedge Stra...

Price Price
$10.710
Owned Owned
No

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COMMENT

This is a relatively small cannabis player but the trailing EBITDA is minimal and the forecasted earnings are speculative. He bought the IPO at $2 and sold it at $4. It’s one of the higher quality companies in the space, with interesting value add ideas. They even have a patent for infused cannabis in Keurig cups.

This is a relatively small cannabis player but the trailing EBITDA is minimal and the forecasted earnings are speculative. He bought the IPO at $2 and sold it at $4. It’s one of the higher quality companies in the space, with interesting value add ideas. They even have a patent for infused cannabis in Keurig cups.

0
James Hodgins

Chief Inve, Curvature Hedge Stra...

Price Price
$9.660
Owned Owned
No

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