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Stock Opinions by Mohsin Bashir

N/A

Market. There is no way to value these things from a fundamental stand point. Their applications can be pharma, wellness or applications in beverages. There is a significant amount of speculative interest in investment. The flavor is 'cannabis'. A year from now the ETF could grind higher if there are more participants coming to the table. We are in the late stages of the business cycle. We should see strength in industrials but that has not been taking place yet. There are trade wars, for example. There is a very narrow band of what is driving markets. The 9% of S&P increases have been explained by healthcare and techs. Japan is attracting a lot of investor inflows.

Unknown
BUY

It is a favourite of his. He owns it personally but not institutionally. There is very little dispersion around the line on the chart. It is effectively an opportunity to get private equity expertise in a public equity wrapper. 80% of their cash flows come from fees.

management / diversified
COMMENT

If you are looking at them at this point in the cycle it can be painful. The fixed income proxies and bond proxies are selling off. If you look at the multiple you will find it is still pretty reasonable. This is different from a newspaper. This is an absolute necessity.

telephone utilities
HOLD

It was a great growth stock for a long time. The drivers have fizzled. Overall management are excellent in terms of being able to drive value for the investors. You should hang on to it over the long term or see his top picks today.

packaging / containers
HOLD

It operates in the aerospace and manufacturing segments. It is dominant in rural parts of Canada. They make commercial and industrial tanks and pressure washing system. They were the target of short selling a while ago so the company bought back shares and increased the dividend. They have dealt with the issue quite well. The dividend is still a high payout ratio, however. Hang on to this one.

Transportation & Environmental Services
BUY

This is a very much loved Canadian Tech stock. This is a rarity. The reason this has been so successful is that they have proven they are excellent in allowing companies to optimize. They have grown their revenues 70% year over year. The question is if the recent rebound is sustainable. They have to surpass analysts expectations. That community is looking for top line growth. This company has always tracked a 4-6% surprise above expected revenues.

0
BUY

He owns it in personal accounts. It has struggled to prove to the investor community that it is intact. There was a negative secular trend recently. They still generate great revenues and profitability because of the increasing purchase when people go to their theaters. Their digital signage business is 10-15% of their revenues, coming from quick serve restaurant menus and other businesses that use their screens for advertizing or menus. The dividend is safe and attractive.

other services
DON'T BUY

This company has been through some tough times that will probably persist in terms in differentials in oil pricing. They are a bargain basement valuation, although he would not step into this sector. A lot of good things have to happen in order to realize their analysts' target price. They are more diversified; but there is still a lot of leverage. Cash flows from Eagleford are from Aurora. The valuation is still very levered to the price of oil and their ability to execute in the Duvernay. Try going for lower risk names,

oil / gas
PAST TOP PICK

(A Top Pick July 20/17, Up 52%) They have one of the most significant payment networks in the world. More and more people are moving to financial platforms. 60% of revenues come from personal expenditures. There is still a lot of runway.

other services
PAST TOP PICK

(A Top Pick July 20/17, Up 56%) He looks for companies that dominate their market. This is the number one consumer healthcare brand. More than the next 5 largest competitors combined. It was a show-me story at the time. It needs to penetrate other geographical markets like China for continued growth. It is fairly valued at this price.

0
PAST TOP PICK

(A Top Pick July 20/17, Down 25%) It is a global communications and surveillance business. He has a target of $80 and it was time to go at that point. It is now headquartered in the US. They drew the attention of short sellers: Allegations of accounting irregularities; management resigned days before an investor day. You need to make sure the short interest is gone before investing.

computer software / processing
DON'T BUY

[Can the stock be saved?] The issue was that the investor base was not convinced with the acquisition decision. They tried to expand with a suitable accretive acquisition but they struggled with financing it. They are doing an unorthodox method to raise capital for an acquisition announced ages ago. The dividend is probably not sustainable. He believes they will probably get this right, however.

oil / gas
WATCH

It is one he does not own. He has looked at it in detail. On a PE and multiple basis it trades cheap and always has done. Over the long term you will be able to see them pay a few extra pennies with dividend increases. The multiple looks attractive but don't catch the falling knife. Look for a recovery in targets.

publishing / printing
BUY on WEAKNESS

He sees it getting higher. It is going to be the next graduate to the $1 trillion dollar club. They have leading market share and global market share. They are very healthy. They have platforms like YouTube and Android that transcend generations. The world is enamored with capturing and analyzing all the data. Pick it up when it gets down to the 200 day moving average.

Business Services
BUY

All of the insurers are trading of forward PE is 8-9 times. This is the favoured one of the group because of the Asian exposure. The problem has been the US business. Any of the variable annuity businesses are challenged. He believes in their ability to continue to deliver.

insurance
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