Opinions by Andy Nasr | StockChase
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Andy Nasr

VP & Investment Strategist

ON STOCKCHASE SINCE Aug 2011

Sentry Investments


Opinions by Andy Nasr


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2017-10-19

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A Comment -- General Comments From an Expert 

Central Banks.They are forward-looking, so monetary policy to some extent is forward-looking, considering that a lot of Central Banks in the US have hiked rates 3 times since Trump won the presidency. In Canada, the Bank of Canada has hiked rates twice, so we are forward-looking, because inflation isn’t quite at the target a lot of these Central Banks are targeting, which is 2% or below. They think the slack is eventually going to get absorbed and eventually move back up to 2%. Having fixed income in a portfolio is important, because it will act as a ballast and give you an opportunity to redeploy capital when an opportunity presents itself. As long as we have decent credit growth and decent economic growth, it bodes well for owning equities, corporate profits and earnings.

Andy Nasr

VP & Investment Strategist, Sentry Investments

Price: $0.020
Owned: _N/A

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2017-10-19

COMMENT
A Comment -- General Comments From an Expert 

American Mortgage REITs?Typically very highly leveraged, which is one of the reasons he doesn’t own them. The perverse part about what is happening to rates is that the short end has gone up and the long end actually hasn’t. Where you want to start to get worried is when rates move up too quickly, which puts more of a dent in home ownership in the US.

Andy Nasr

VP & Investment Strategist, Sentry Investments

Price: $0.020
Owned: No

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2017-10-19

TOP PICK
Altagas Ltd (ALA-T)

This provides energy infrastructure. They own power generation assets. In the process of completing a US large acquisition, this is supposed to close in the 1st half of 2018. That really changes the dynamic of the business. To fund this acquisition, they have to sell some assets, which include some California power generation assets which they bought, which were underpinned by power purchase agreements, where the power price they are getting is about half of what the current merchant price is, so those have to get refinanced and re-contracted. Dividend yield of 7.4%. (Analysts’ price target is $33.)

oil/gas
Andy Nasr

VP & Investment Strategist, Sentry Investments

Price: $29.540
Owned: Yes

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2017-10-19

TOP PICK
Albemarle Corp (ALB-N)

The largest producer of lithium. When we talk about electrification, electric vehicles, more tablets, smart phones, etc. lithium batteries are going to be in relatively high demand. Demand growth is forecast to be 10% a year for the next decade, and that is even using some relatively conservative assumptions about electric vehicle penetration. Given that this is the largest producer and a very low-cost producer, they should be able to bank very significant cash flow over the course of the next 5-10 years, but governments can very significantly influence adoption. Dividend yield of 0.9%. (Analysts’ price target is $137.)

Mining
Andy Nasr

VP & Investment Strategist, Sentry Investments

Price: $139.490
Owned: Yes

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2017-10-19

COMMENT
Amazon.com (AMZN-Q)

Hold or Sell?If you are holding it, you are buying it. There is no question there is a tremendous amount of growth ahead. It’s very hard to justify valuation. While he has confidence that e-commerce penetration is going to increase very gradually from 9%-10% in the US, when you look at their valuation it is difficult to justify how much earnings are going to have to grow for the valuation to come down to a market multiple. Trades at about 110X next year’s earnings. If you take that market multiple and bring it down to a multiple of about 20, that implies earnings are going to have to grow at a compound annual growth rate of 48% over 10 years. Very few companies have been able to do that.

specialty stores
Andy Nasr

VP & Investment Strategist, Sentry Investments

Price: $986.610
Owned: No

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2017-10-19

PAST TOP PICK
Boardwalk REIT (BEI.UN-T)

(A Top Pick Sept 20/16. Down 15%.) Continues to like this because it is a relatively defensive asset class, lower income Housing. Western Canada has been particularly challenged given the downturn in energy. The market has been a little overreacting to the downturn. The benefit is that it has a relatively short lease term. Trades at a significant discount to NAV. Continue to Hold if you own. Dividend yield of 5.6%.

property mngmnt/investment
Andy Nasr

VP & Investment Strategist, Sentry Investments

Price: $40.150
Owned: Yes

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2017-10-19

COMMENT
Canadian Apartment Properties (CAR.UN-T)

Owns apartments in Canada, with significant exposure to Eastern Canada and a modest exposure to continental Europe. He owns this and continues to like it. It is very well-capitalized and well-run. Spent over $1 billion in investing in their own properties, enabling them to affect above guideline increases in Ontario. They will be able to benefit from the Ontario changes in rent regulations. 3.7% dividend yield.

investment companies/funds
Andy Nasr

VP & Investment Strategist, Sentry Investments

Price: $34.680
Owned: Yes

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2017-10-19

PAST TOP PICK
Cigna Corp. (CI-N)

(A Top Pick Sept 20/16. Up 43%.) He continues to like the US healthcare sector. In the US, if over 65 years of age, you spend 3X as much on healthcare as under the age of 65. This company doesn’t have much exposure to the Affordable Care Act and is well positioned to benefit from those trends.

Financial Services
Andy Nasr

VP & Investment Strategist, Sentry Investments

Price: $188.220
Owned: Yes

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2017-10-19

COMMENT
Chartwell Seniors Housing (CSH.UN-T)

Key factors you focus on when assessing this kind of company?He tries to look at management, assets, payout ratios and liabilities. When evaluating any REIT, the most important thing is going to be demand and supply. It really affects the ability of management teams to increase occupancy and increase rents. For this one, seniors housing is very operationally intensive, and they benefit from being one of the largest players in Canada. Having national presence gives them the opportunity to purchase things a little cheaper, manage properties more effectively and to increase occupancy in case of a decline. He likes this company. There are very favourable demographic tailwinds that will benefit them going forward.

property mngmnt/investment
Andy Nasr

VP & Investment Strategist, Sentry Investments

Price: $15.160
Owned: Yes

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2017-10-19

BUY
Enbridge (ENB-T)

Was considering this as a Top Pick for tonight’s program. It provides energy infrastructure and accounts for a significant portion of the oil prices between Canada and the US. They have a $25+ billion backlog that they should be able to execute. Doesn’t think there is risk to energy infrastructure companies.

oil/gas pipelines
Andy Nasr

VP & Investment Strategist, Sentry Investments

Price: $50.360
Owned: Yes

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2017-10-19

COMMENT
Facebook (FB-Q)

He likes this because it is involved in a couple of oligopolies, and in some cases duopolies. With all the accounts it has, there are increased users. What is most interesting is its dominance in online advertising. They are in a duopoly with Alphabet (GOOGL-Q), and control about 75% of online advertising. A really good business. If the valuation pulled back and got a little more compelling, he would consider adding to it.

Andy Nasr

VP & Investment Strategist, Sentry Investments

Price: $174.560
Owned: Yes

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2017-10-19

COMMENT
General Motors Corporation (GM-N)

Has had a great run. His concern with the US automotive sector is that you are going to approach peak sales. He worries that ultimately you are going to see a lot of transition with respect to the OEMs, especially if you consider that other markets like China and some in continental Europe are trying to phase out combustible engine vehicles. China wants to completely phase them out by 2025. Also, NAFTA renegotiations are not good for this company.

Automotive
Andy Nasr

VP & Investment Strategist, Sentry Investments

Price: $45.350
Owned: No

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2017-10-19

COMMENT
Granite REIT (GRT.UN-T)

There was a strategic review by management for potentially selling the company, but nothing came of that. There was some turnover with the CEO. The big issue is when it initially came to the market, it had very significant exposure to Magna (MG-T), which was their largest tenant. However, it had a pristine balance sheet. When you think of the Debt to Growth Book Value, it had approximately 25%, and the theory was that if they increased the leverage and took that Debt to Growth Book Value to 40%, they would have $1 billion to play with, diversify tenant exposure, make acquisitions. However they haven’t done any of that. That is unfortunate, because real estate prices have gone up significantly. It pays a decent dividend of 5%. His concern is that you really do need the leadership in there.

E.T.F.'s
Andy Nasr

VP & Investment Strategist, Sentry Investments

Price: $50.560
Owned: Unknown

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2017-10-19

COMMENT
Coca-Cola Company (KO-N)

He would love to buy this if it got a lot cheaper. Has a great franchise. The problem with most consumer staples companies is that they are relatively expensive. The recent run-up is largely a function of the decline we have seen in the US$ versus other currencies. The company is structuring challenged in that you are going to see low single digit volume growth. They have tried to refranchise a lot of their bottlers, and are going through some transitional issues. Too expensive and too low a growth.

food processing
Andy Nasr

VP & Investment Strategist, Sentry Investments

Price: $46.590
Owned: No

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2017-10-19

TOP PICK
Liberty Expedia Holdings (LEXEA-Q)

A $3 billion company that owns a significant stake in Expedia (EXPE-Q) and Bodybuilding.com. The vast majority of the NAV is its ownership stake in Expedia. Trades at about a 25%-30% discount to the value of its Expedia holdings. It owns some of the common stock and all of the B voting shares. They’ve given the B voting shares and proxies to Mr. Diller, chairman of Expedia. In the event Mr. Diller dies or leaves the company, they get the voting shares back, at which point that NAV could get crystallized with a very significant uplift. He really likes Expedia and Priceline, as only about 35% of bookings are still done online, so there is going to be a tremendous amount of growth. (Analysts’ price target is $59.82.)

Andy Nasr

VP & Investment Strategist, Sentry Investments

Price: $56.510
Owned: Yes

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