Opinions by Andy Nasr | StockChase
930
Andy Nasr

VP & Investment Strategist

ON STOCKCHASE SINCE Aug 2011

Sentry Investments

930
Andy Nasr

VP & Investment Strategist

ON STOCKCHASE SINCE Aug 2011

Sentry Investments


Opinions by Andy Nasr


Signal Opinion Expert Chart
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General Market Comment 

November 29, 2017

Economy. Things are good, and we should be grateful. However, it’s really important to be diversified. Usually when things are this good, they’re not this good for long. The best way to mitigate risk is by being diversified by asset class, geography, and making sure you own the right securities. That is probably going to be the key theme going into 2018 and beyond as we approach the end of the business cycle and start to see more credit build up, not just in the Canadian economy, but economies all over the world. Inflation interest rates are going remain anchored by several structural factors. First and foremost, there is a ton of debt floating around. When you have that much debt in the global economy, rates can only go up so much before it starts causing economic conditions to start deteriorating.

Economy. Things are good, and we should be grateful. However, it’s really important to be diversified. Usually when things are this good, they’re not this good for long. The best way to mitigate risk is by being diversified by asset class, geography, and making sure you own the right securities. That is probably going to be the key theme going into 2018 and beyond as we approach the end of the business cycle and start to see more credit build up, not just in the Canadian economy, but economies all over the world. Inflation interest rates are going remain anchored by several structural factors. First and foremost, there is a ton of debt floating around. When you have that much debt in the global economy, rates can only go up so much before it starts causing economic conditions to start deteriorating.

Unknown
Andy Nasr

VP & Investment Strategist, Sentry Investments...

PricePrice
$0.020
Owned Owned
_N/A

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BUY on WEAKNESS
Altagas Ltd(ALA-T) 

November 29, 2017

He would buy this when it is down. An energy infrastructure company, but doesn’t get credit that a lot of its operating profit is not particularly commodity sensitive. Has great renewable energy contracts, 20-25 years duration, indexed to inflation. On top of that, there is a US acquisition they will be completing next year, which reduces their commodity price exposure even further. Hopefully that causes the stock to get re-rated. Dividend yield of 7.6%.

oil/gas

He would buy this when it is down. An energy infrastructure company, but doesn’t get credit that a lot of its operating profit is not particularly commodity sensitive. Has great renewable energy contracts, 20-25 years duration, indexed to inflation. On top of that, there is a US acquisition they will be completing next year, which reduces their commodity price exposure even further. Hopefully that causes the stock to get re-rated. Dividend yield of 7.6%.

oil/gas
Andy Nasr

VP & Investment Strategist, Sentry Investments...

PricePrice
$29.030
Owned Owned
Yes

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PARTIAL SELL
Aecon Group Inc(ARE-T) 

November 29, 2017

A Chinese company is offering to acquire this at $20.37. There is still uncertainty. If you own, he would consider selling some of your holdings.

contractors

A Chinese company is offering to acquire this at $20.37. There is still uncertainty. If you own, he would consider selling some of your holdings.

contractors
Andy Nasr

VP & Investment Strategist, Sentry Investments...

PricePrice
$19.590
Owned Owned
Unknown

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HOLD
Bank of America(BAC-N) 

November 29, 2017

Prefers US banks over Canadian banks, as he expects there will be a little more loan growth, especially if you consider that US households have a lot less than Canadian households. This bank has had a fantastic run. It is amongst the large cap banks, so has the most exposure to rising US interest rates.

banks

Prefers US banks over Canadian banks, as he expects there will be a little more loan growth, especially if you consider that US households have a lot less than Canadian households. This bank has had a fantastic run. It is amongst the large cap banks, so has the most exposure to rising US interest rates.

banks
Andy Nasr

VP & Investment Strategist, Sentry Investments...

PricePrice
$28.280
Owned Owned
No

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BUY

Exceptionally well diversified. He likes management teams who have a history of allocating capital well, good returns on invested capital and a good track record. This company is really the personification of all of that.

insurance

Exceptionally well diversified. He likes management teams who have a history of allocating capital well, good returns on invested capital and a good track record. This company is really the personification of all of that.

insurance
Andy Nasr

VP & Investment Strategist, Sentry Investments...

PricePrice
$189.850
Owned Owned
Yes

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HOLD

He continues to like this. The demand/supply fundamentals are great. CHMC just released an apartment survey and their outlook for vacancies in major metropolitan city centres are absurdly low in Toronto, Montréal and Ottawa. This one tends to be focused in eastern Canada, and are definitely going to benefit from that low vacancy rate. Also, management spent a ton of money in the last 10 years reinvesting in their properties, allowing them to charge a little more for rent.

investment companies/funds

He continues to like this. The demand/supply fundamentals are great. CHMC just released an apartment survey and their outlook for vacancies in major metropolitan city centres are absurdly low in Toronto, Montréal and Ottawa. This one tends to be focused in eastern Canada, and are definitely going to benefit from that low vacancy rate. Also, management spent a ton of money in the last 10 years reinvesting in their properties, allowing them to charge a little more for rent.

investment companies/funds
Andy Nasr

VP & Investment Strategist, Sentry Investments...

PricePrice
$37.010
Owned Owned
Yes

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COMMENT
Canadian Natural Rsrcs(CNQ-T) 

November 29, 2017

His outlook for 2018 is that oil and gas prices are going to remain range bound. Would prefer energy infrastructure instead of this company. He wants exposure to companies that are going to benefit from pulling the stuff out of the ground. That includes transporting it, fractionation for gas, logistics. Companies underpinned by “fee for service” or “take or pay” contracts have a lot more visibility and a lot less commodity price exposure. This wouldn’t be his favourite.

oil/gas

His outlook for 2018 is that oil and gas prices are going to remain range bound. Would prefer energy infrastructure instead of this company. He wants exposure to companies that are going to benefit from pulling the stuff out of the ground. That includes transporting it, fractionation for gas, logistics. Companies underpinned by “fee for service” or “take or pay” contracts have a lot more visibility and a lot less commodity price exposure. This wouldn’t be his favourite.

oil/gas
Andy Nasr

VP & Investment Strategist, Sentry Investments...

PricePrice
$42.790
Owned Owned
Unknown

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TOP PICK
Cisco(CSCO-Q) 

November 29, 2017

This business is probably a lot simpler than people think. They sell equipment that allows people to connect to the Internet. This can include routers and switches, and for the longest time this was their bread-and-butter. All of a sudden, we had the advent of software defined networks. Software was decoupled from hardware. Cisco sold them together, so they encountered some margin pressures. Now they have transitioned where you are starting to see some positive organic growth, focused on security. Looking forward, the Internet of things is a whole bunch of different devices connected to the Internet. That’s a lot of data flowing across the networks, which should benefit companies like this. Trading at 12X earnings. Dividend yield of 3%. (Analysts’ price target is $39.)

electrical/electronic

This business is probably a lot simpler than people think. They sell equipment that allows people to connect to the Internet. This can include routers and switches, and for the longest time this was their bread-and-butter. All of a sudden, we had the advent of software defined networks. Software was decoupled from hardware. Cisco sold them together, so they encountered some margin pressures. Now they have transitioned where you are starting to see some positive organic growth, focused on security. Looking forward, the Internet of things is a whole bunch of different devices connected to the Internet. That’s a lot of data flowing across the networks, which should benefit companies like this. Trading at 12X earnings. Dividend yield of 3%. (Analysts’ price target is $39.)

electrical/electronic
Andy Nasr

VP & Investment Strategist, Sentry Investments...

PricePrice
$37.480
Owned Owned
Yes

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COMMENT

Not a big fan of retailers in general, and this isn’t a good entry point. A better choice would be CT Real Estate Investment Trust (CRT.UN-T), a nominal bond proxy, but you get a decent yield. Canadian Tire is their tenant.

specialty stores

Not a big fan of retailers in general, and this isn’t a good entry point. A better choice would be CT Real Estate Investment Trust (CRT.UN-T), a nominal bond proxy, but you get a decent yield. Canadian Tire is their tenant.

specialty stores
Andy Nasr

VP & Investment Strategist, Sentry Investments...

PricePrice
$162.910
Owned Owned
Unknown

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DON'T BUY
General Electric(GE-N) 

November 29, 2017

A little concerned about the progress management is going to be able to make as they prune the portfolio trying to right size it. After years of growing by acquisition, focusing on energy and relying on GE Financial, he worries at a stock trading at this price and supposed to generate $1 in earnings. They’ve cut the dividend. There’s a lot of work to be done. It looks like the end markets are struggling. It’s probably going to take several quarters before the turnaround starts to work out. You really want to see organic growth before you get excited. There are better risks/rewards in other industrials.

electrical/electronic

A little concerned about the progress management is going to be able to make as they prune the portfolio trying to right size it. After years of growing by acquisition, focusing on energy and relying on GE Financial, he worries at a stock trading at this price and supposed to generate $1 in earnings. They’ve cut the dividend. There’s a lot of work to be done. It looks like the end markets are struggling. It’s probably going to take several quarters before the turnaround starts to work out. You really want to see organic growth before you get excited. There are better risks/rewards in other industrials.

electrical/electronic
Andy Nasr

VP & Investment Strategist, Sentry Investments...

PricePrice
$18.480
Owned Owned
No

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PAST TOP PICK
Alphabet Inc. (A)(GOOGL-Q) 

November 29, 2017

(A Top Pick Nov 23/16. Up 33%.) Involved in a couple of oligopolies, online search, online video and ad spending, and has a ton of cash they can deploy into areas that are going to grow hand over fist in the next decade. It isn’t trading at all that much of a premium to the S&P 500 in the context of its growth rate.

Business Services

(A Top Pick Nov 23/16. Up 33%.) Involved in a couple of oligopolies, online search, online video and ad spending, and has a ton of cash they can deploy into areas that are going to grow hand over fist in the next decade. It isn’t trading at all that much of a premium to the S&P 500 in the context of its growth rate.

Business Services
Andy Nasr

VP & Investment Strategist, Sentry Investments...

PricePrice
$1037.380
Owned Owned
Yes

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COMMENT

He likes this company. Very well diversified with a very attractive dividend yield. In recent years they’ve increased their US exposure. It is so well diversified that you can bank on pretty moderate but stable cash flow and cash flow growth for the foreseeable future.

property mngmnt/investment

He likes this company. Very well diversified with a very attractive dividend yield. In recent years they’ve increased their US exposure. It is so well diversified that you can bank on pretty moderate but stable cash flow and cash flow growth for the foreseeable future.

property mngmnt/investment
Andy Nasr

VP & Investment Strategist, Sentry Investments...

PricePrice
$20.980
Owned Owned
Yes

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SELL
Husky Energy(HSE-T) 

November 29, 2017

Sell and buy Enbridge (ENB-T)? You are on the right track. He would get rid of this and buy Enbridge. With energy infrastructure, you are getting very predictable cash flows. It is tough not to like Enbridge considering that it accounts for about two thirds of the oil that crosses over the Canadian and US border. Also has a backlog of over $25 billion that they should be able to execute pretty seamlessly. That translates into mid-single digits/high single digits cash flow growth.

oil/gas

Sell and buy Enbridge (ENB-T)? You are on the right track. He would get rid of this and buy Enbridge. With energy infrastructure, you are getting very predictable cash flows. It is tough not to like Enbridge considering that it accounts for about two thirds of the oil that crosses over the Canadian and US border. Also has a backlog of over $25 billion that they should be able to execute pretty seamlessly. That translates into mid-single digits/high single digits cash flow growth.

oil/gas
Andy Nasr

VP & Investment Strategist, Sentry Investments...

PricePrice
$15.270
Owned Owned
Unknown

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COMMENT
Intertape Polymer Group(ITP-T) 

November 29, 2017

He really likes management. The dividend is safe. This business grows at about GDP. If they are able to create low cost capacity, they may be able to increase their market share slightly, but the free cash flow yield on this is relatively high. To him, the right price is below $20.

packaging/containers

He really likes management. The dividend is safe. This business grows at about GDP. If they are able to create low cost capacity, they may be able to increase their market share slightly, but the free cash flow yield on this is relatively high. To him, the right price is below $20.

packaging/containers
Andy Nasr

VP & Investment Strategist, Sentry Investments...

PricePrice
$21.570
Owned Owned
No

Must be logged in to use chart
SELL
Coca-Cola Company(KO-N) 

November 29, 2017

If he owned this, he would switch to Pepsi (PEP-N). There is more optionality with Pepsi. Coca-Cola has re-franchised their bottling agreements. The margins are relatively high. Pepsi is not as operationally efficient, which means that it is probably a better acquisition target.

food processing

If he owned this, he would switch to Pepsi (PEP-N). There is more optionality with Pepsi. Coca-Cola has re-franchised their bottling agreements. The margins are relatively high. Pepsi is not as operationally efficient, which means that it is probably a better acquisition target.

food processing
Andy Nasr

VP & Investment Strategist, Sentry Investments...

PricePrice
$45.500
Owned Owned
No

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