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Stock Opinions by James Hodgins

HOLD
They purchased the balance of their project from the government. It is trading very cheap. They do not have major issues with China. It will be highly sensitive to global iron ore prices. There have been shut downs in Colombia, which has benefited them. It would be a hold for him as iron ore prices might weaken going forward.
Mining
PAST TOP PICK
(A Top Pick May 15/18, Down 55%) It has suffered like all junior energy holdings. He exited as they want to have a better sense about the Canadian regulatory environment. They have kept their balance sheet strong.
oil / gas
PAST TOP PICK
(A Top Pick May 15/18, Down 73%) A miner and processor of phosphate -- a precursor to potash. They took over a bankrupt project in Brazil, which they liked from a speculative perspective. They have had technical difficulty with the project and it did not work. If you are patient, it should eventually pay off, but he exited it a while ago.
Other Agricultural Products
PAST TOP PICK
(A Top Pick May 15/18, Down 6%) A play on two emerging growth themes -- e-sports and betting. He is very bullish on e-sports for younger consumers all around the world.
Unknown
SHORT
He has not been following it recently. They were involved in 4G technology in the past. He actually has a small short position.
electrical / electronic
COMMENT
He has liked the project in South America, but it has had issues with geopolitical issues. It appears very cheap he think.
precious metals
DON'T BUY
Their build out was focused on the oil sands and that could hurt them. He thinks the dividend is safe, but does not see investors coming back to trade the stock at the multiples of the past.
oil pipelines
BUY

Dividend safe? The payout ratio is in the high 50% level -- it should be safe. They extended their agreement with Air Canada to 2035 and received capital for their leasing business. He likes the stock and thinks it trades undervalued and the dividend could increase. Their earnings are not as correlated to the economy as with Air Canada, so he has made this his largest equity position.

Transportation & Environmental Services
SHORT
He has a small short position on this one. It is expensive and the management compensation plan is too generous. With such low interest rates, why would anyone need to borrow from them?
Financial Services
TOP PICK
They make antennas and have great technology for the advancement of 5G -- affording an explosion in growth potential. The Waewai controversy is helping their business. Yield 0% (Analysts’ price target is $5.76)
0
TOP PICK
A silver mining company in Mexico. They have unbelievable yields on their mines. He is very bullish on silver prices going forward. A great take out prospect. Yield 0% (Analysts’ price target is $6.63)
precious metals
TOP PICK
A dissident shareholder has caused some weakness in price. It that trades near its cash and asset value -- great value for the quality of management. One of his largest equity holdings. Yield 0%. (Analysts’ price target is $9.41)
0
COMMENT
We're at the end of a credit cycle as in 2000 and 2007: people have borrowed too much, some sectors overheated then the market corrects. 17 countries have yield-curve inversions, so supply and demand for credit are peaking. Equity markets are at all-time highs, but that attracts only more bullishness. A key indicator is margin debt. In 2000 and 2007, there were all-time highs in margin debt. We saw a similar pattern in margin debt in the late-2018 sell-off. Also similar to 2007, the US housing market was falling apart in the summer and equity markets made all-time highs in October. He fears the eventual outcome will be quite nasty. There's excess money-printing by central banks globally. Central banks, though, are being a little pro-active this cycle by raising rates last year, which is good. He thinks central banks will stabilize any correction. By doing this, maybe we'll see a 30% correction instead of 50%+ during 2008. Still painful, but we saw a 20% move in the past 6 months.
Unknown
DON'T BUY
We had a short on it last fall. At the time, he thought the valuation was rich. They missed two straight quarters last year, but they are better shape now. He doesn't see much growth here in this sector. Also, there's lots of competition; they lost some bus contracts.
Automotive
WEAK BUY
They buy mom and pop funeral homes and rolling this up. This just made their biggest acquisition and did an equity raise. He likes this, but he's cautious of any acqusition story at the end of a cycle. This is decent long-term.
REAL ESTATE
Showing 61 to 75 of 1,126 entries