Opinions by Lorne Steinberg | StockChase
602
Lorne Steinberg

President & Portfolio Manager

ON STOCKCHASE SINCE Jan 2011

Lorne Steinberg Wealth Management Inc
1000 de la Gauchetiere Street WestSuite 3310Montreal, QUH3B 4W5
T: 514-876-9888 F: 514-876-9994
http://www.steinbergwealth.com


Opinions by Lorne Steinberg


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2017-10-23

PAST TOP PICK
Aida Engineering (6118-JP)

(A Top Pick Nov 24/16. Up 38%.) An amazing Japanese value stock. They make the equipment for the manufacturing process. The Japanese market remains a depressed market. This is one of the best in the world in what they do. Trading at about 13X earnings, and with good earnings growth.

machinery
Lorne Steinberg

President & Portfolio Manager, Lorne Steinberg Wealth Management Inc

Price: $0.000
Owned: Yes

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2017-10-23

BUY
Nippon Antenna (6930-JP)

This is one of those crazy Japanese value stories, where the cash and Accounts Receivable are greater than the entire share price. They have no debt. (See Top Picks.)

Lorne Steinberg

President & Portfolio Manager, Lorne Steinberg Wealth Management Inc

Price: $0.000
Owned: Yes

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2017-10-23

TOP PICK
Kawasumi Laboratories (7703-TYO)

This is a Japanese golden opportunity. No debt and the share price is trading for less then the amount of cash in accounts receivable. It has been around for over 50 years. In the medical supply business and focused on disposable products. Constant turnover and increasing sales with an aging population globally. Extremely cheap. Dividend yield of 1.8%.

medical services
Lorne Steinberg

President & Portfolio Manager, Lorne Steinberg Wealth Management Inc

Price: $0.000
Owned: Yes

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2017-10-23

N/A
A Comment -- General Comments From an Expert 

Economy.Government, corporate, nonfinancial and consumer debt has been rising as a percentage of global GDP. Even after years of austerity programs, we are in a situation where the global debt level has been rising, and suddenly we are at an inflection point where interest rates are starting to pick up. This is going to have an impact globally. Bond yields are starting to rise around the world. Central Banks are not raising rates in Europe or Japan anytime soon, but we are starting to see a bit of an uptick in bond yields, which is going to impact over time on mortgage borrowers and government bond issuers. Everyone is going to be following the Fed and the Bank of Canada, and there is the usual lag, so he figures that in the next 24 months we are going to start seeing rates coming up in other parts of the world. In a rising rate environment, you want to avoid some of the overvalued sectors, specifically pipelines and utilities. Investors have been buying those and driving up valuations on companies that have minimal growth. They are buying them for the dividend yield. You want to be in really strong undervalued companies, and not just riding yesterday’s winners.

Lorne Steinberg

President & Portfolio Manager, Lorne Steinberg Wealth Management Inc

Price: $0.020
Owned: _N/A

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2017-10-23

N/A
A Comment -- General Comments From an Expert 

A high dividend paying stock? Buying the stock just because it pays a high dividend is not a good reason. In a rising rate environment, those dividends become less attractive. When you buy a stock, buy a company because you think the stock is undervalued. He likes the Cdn insurance companies because you are going to have a rising dividend over time. (See Top Picks.)

Lorne Steinberg

President & Portfolio Manager, Lorne Steinberg Wealth Management Inc

Price: $0.020
Owned: _N/A

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2017-10-23

N/A
A Comment -- General Comments From an Expert 

Buy US$ now or wait a month or 2?Has never met anyone in the investment business who has predicted correctly the direction of the Cdn$ versus the US$. If you have to buy US$, either buy it all now because the Cdn$ has rallied, or buy half a position, but don’t try to think you will be able to guess the direction. That always comes back to bite people.

Lorne Steinberg

President & Portfolio Manager, Lorne Steinberg Wealth Management Inc

Price: $0.020
Owned: _N/A

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2017-10-23

COMMENT
Alcoa (AA-N)

The only mining stock he owns, because aluminum is a growth metal. Because it is light, every new generation of cars and planes has more aluminum. Aluminum has been in a down cycle for a long time. Alcoa has split itself into 2 companies. For aluminum, the up cycle is now here. This is a cyclical stock, so when it starts going up even further and looks really, really cheap, it is probably time to start looking at selling it, because it is a pure aluminum play.

non-base metal mining
Lorne Steinberg

President & Portfolio Manager, Lorne Steinberg Wealth Management Inc

Price: $47.930
Owned: Yes

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2017-10-23

DON'T BUY
Air Canada (AC-T)

Has never owned an airline. This one is certainly in the sweet spot. They’ve come out with all kinds of ancillary airlines, with no unions. Everything is perfect for them with an improving economy. These are deeply cyclical companies. The time to buy this was when they were losing money and the stock was a lot lower. Now they look like a really good company, but in fact they are just a cyclical airline.

Transportation
Lorne Steinberg

President & Portfolio Manager, Lorne Steinberg Wealth Management Inc

Price: $26.340
Owned: No

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2017-10-23

COMMENT
Bank of America (BAC-N)

He likes the large US investment banks. Prefers Goldman Sachs (GS-N) and Morgan Stanley (MS-N). However, the whole sector is going to be a beneficiary of rising interest rates, a beneficiary of ongoing recovery around the world, including Europe. These are all very well capitalized, and this one is going to have an earning’s bump this year.

banks
Lorne Steinberg

President & Portfolio Manager, Lorne Steinberg Wealth Management Inc

Price: $27.160
Owned: No

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2017-10-23

DON'T BUY
Barclays Bank PLC (BCS-N)

Prefers Deutsche Bank (DB-N) because it is so much cheaper. Barclays has a whole bunch of other issues on its own. It has had some management issues over the years. Thinks you are best looking elsewhere.

banks
Lorne Steinberg

President & Portfolio Manager, Lorne Steinberg Wealth Management Inc

Price: $10.270
Owned: No

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2017-10-23

COMMENT
BP PLC (BP-N)

Compared with other integrateds?A company that makes money at $50 oil. Part of their business benefits from oil prices, petrochemicals and refining. They are earning their hefty 6% level dividend with their own free cash flow. These large integrateds are going to underperform if oil does really, really well. They are using their free cash flow to make intelligent acquisitions. Rising dividends are in the cards even if oil stays at $50.

integrated oils
Lorne Steinberg

President & Portfolio Manager, Lorne Steinberg Wealth Management Inc

Price: $38.790
Owned: Yes

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2017-10-23

PAST TOP PICK
Cisco (CSCO-Q)

(A Top Pick Nov 24/16. Up 19%.) He still loves this. One of the cheapest stocks in his portfolio. If you X out net cash, it is selling at 13X earnings with a 3%+ dividend. Dividend growth will continue at over 10% a year. #1 in the world in their 4 major businesses.

electrical/electronic
Lorne Steinberg

President & Portfolio Manager, Lorne Steinberg Wealth Management Inc

Price: $34.350
Owned: Yes

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2017-10-23

COMMENT
Deutsche Bank AG (DB-N)

This bank is now properly capitalized. They’ve been through the worst and are selling at about a 50% discount to tangible BV. They are not the best in the business, but they do deserve to sell for a much higher price than what they are trading at. Earnings have stabilized and they are earning money. One of the cheapest stocks he owns.

banks
Lorne Steinberg

President & Portfolio Manager, Lorne Steinberg Wealth Management Inc

Price: $16.630
Owned: Yes

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2017-10-23

BUY on WEAKNESS
Dollarama Inc. (DOL-T)

An amazing Canadian success stories where many people didn’t realize that people from every income strata would be running into their stores. Not a cheap stock and he wouldn’t buy it here. Revenue growth has slowed, and there is a limit to how many Dollarama’s you can keep on opening. The company is using its free cash to buy back shares.

Consumer Products
Lorne Steinberg

President & Portfolio Manager, Lorne Steinberg Wealth Management Inc

Price: $142.050
Owned: Unknown

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2017-10-23

TOP PICK
DowDuPont Inc. (DWDP-N)

The merger between Dow and DuPont offers real cost synergies. Eventually this will be broken up into 3 companies, a specialty and agricultural company’s couples company and a materials company. When we get our breakup value of the stock and take out the cost synergies, he gets a valuation that the stock should be double where it is in the next 5 years. A very, very undervalued company. They are #1 in most of their major businesses. Plenty of free cash flow and lots of room for dividend increases in all 3 of the businesses. (Analysts’ price target is $79.)

chemicals
Lorne Steinberg

President & Portfolio Manager, Lorne Steinberg Wealth Management Inc

Price: $71.550
Owned: Yes

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1 Comment

izzyKap

April 25th 2014 at 8:25am

I viewed Lorne for the first time on BNN April 2014. My impression is that he is a thoughtful incisive professional with impressive brain power! I intend to keep track of his recommendations.


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