Opinions by Greg Newman | StockChase
1083
Greg Newman

Director & Portfolio Manager

ON STOCKCHASE SINCE Sep 2011

Scotia Wealth Management

1083
Greg Newman

Director & Portfolio Manager

ON STOCKCHASE SINCE Sep 2011

Scotia Wealth Management


Opinions by Greg Newman


Signal Opinion Expert Chart
N/A
General Market Comment 

December 15, 2017

Market. He’s been very Long this market for a while, and for asset allocation model 70/30 to fixed income, he is right on the edge in terms of his swing for 90% equity. Stocks are expensive, but are not expensive relative to bonds, apartment buildings, a lot of different private equity alternatives. If you can find a stock with a 11 or 12 PE with a 4% dividend and visibility growing at 10% and EPS, there is still lots of opportunity. As a protection strategy, he is using the options market to squeeze out yield on both sides, using Calls or puts.

Market. He’s been very Long this market for a while, and for asset allocation model 70/30 to fixed income, he is right on the edge in terms of his swing for 90% equity. Stocks are expensive, but are not expensive relative to bonds, apartment buildings, a lot of different private equity alternatives. If you can find a stock with a 11 or 12 PE with a 4% dividend and visibility growing at 10% and EPS, there is still lots of opportunity. As a protection strategy, he is using the options market to squeeze out yield on both sides, using Calls or puts.

Unknown
Greg Newman

Director & Portfolio Manager, Scotia Wealth Manage...

PricePrice
$0.020
Owned Owned
_N/A

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N/A
General Market Comment 

December 15, 2017

Dividend paying stock to provide an income? He would start with one or 2 banks and 1 or 2 insurance companies. There are some really good industrials that still look good, such as a Magna (MG-T). A lot of people are looking for the high dividend paying stocks, that are good to be owning in this environment. He would suggest a Russell Metals (RUS-T) with about a 5% dividend, which is strengthening from metal prices.

Dividend paying stock to provide an income? He would start with one or 2 banks and 1 or 2 insurance companies. There are some really good industrials that still look good, such as a Magna (MG-T). A lot of people are looking for the high dividend paying stocks, that are good to be owning in this environment. He would suggest a Russell Metals (RUS-T) with about a 5% dividend, which is strengthening from metal prices.

Unknown
Greg Newman

Director & Portfolio Manager, Scotia Wealth Manage...

PricePrice
$0.020
Owned Owned
_N/A

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COMMENT
Apple(AAPL-Q) 

December 15, 2017

Trading at a very reasonable valuation. Tim Cook has been a great custodian for the business. They haven't really done anything super bold. They have so much cash, trading at a reasonable valuation. Tech land still has very reasonable multiples and this company is very reasonable within that. Thinks there is still more to go.

electrical/electronic

Trading at a very reasonable valuation. Tim Cook has been a great custodian for the business. They haven't really done anything super bold. They have so much cash, trading at a reasonable valuation. Tech land still has very reasonable multiples and this company is very reasonable within that. Thinks there is still more to go.

electrical/electronic
Greg Newman

Director & Portfolio Manager, Scotia Wealth Manage...

PricePrice
$173.970
Owned Owned
Yes

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COMMENT
Altagas Ltd(ALA-T) 

December 15, 2017

Doesn't cover this one actively. They did a deal in the US that looks accretive. He prefers Penbina (PPL-T) which has a much better growth rate and a clearer thesis. The payout ratio, it is something like 5% of free cash flow, and he thinks you are going to be fine in terms of the dividend.

oil/gas

Doesn't cover this one actively. They did a deal in the US that looks accretive. He prefers Penbina (PPL-T) which has a much better growth rate and a clearer thesis. The payout ratio, it is something like 5% of free cash flow, and he thinks you are going to be fine in terms of the dividend.

oil/gas
Greg Newman

Director & Portfolio Manager, Scotia Wealth Manage...

PricePrice
$29.040
Owned Owned
No

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COMMENT
Arc Resources Ltd(ARX-T) 

December 15, 2017

This has just fallen apart with ECO prices, with Henry hub falling. The markets have been so good that portfolio managers are just taking losers and dumping them as tax loss selling targets. Thinks there will be a pop between now and the 3rd week of January. The bad news is that the dividend has a 142% effective payout ratio, so it is not safe. The balance sheet is not ironclad.

oil/gas

This has just fallen apart with ECO prices, with Henry hub falling. The markets have been so good that portfolio managers are just taking losers and dumping them as tax loss selling targets. Thinks there will be a pop between now and the 3rd week of January. The bad news is that the dividend has a 142% effective payout ratio, so it is not safe. The balance sheet is not ironclad.

oil/gas
Greg Newman

Director & Portfolio Manager, Scotia Wealth Manage...

PricePrice
$13.880
Owned Owned
Unknown

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BUY
Bank of America(BAC-N) 

December 15, 2017

Still trading at close to tangible BV of around 1X. On a PE basis, it is a little more expensive than Toronto Dominion (TD-T), maybe around 14X versus 12X. With rising interest rates, a slightly better net interest margin, a rebounding America, and the corporate tax plan, this company really stands to benefit. This one is going higher.

banks

Still trading at close to tangible BV of around 1X. On a PE basis, it is a little more expensive than Toronto Dominion (TD-T), maybe around 14X versus 12X. With rising interest rates, a slightly better net interest margin, a rebounding America, and the corporate tax plan, this company really stands to benefit. This one is going higher.

banks
Greg Newman

Director & Portfolio Manager, Scotia Wealth Manage...

PricePrice
$29.040
Owned Owned
Yes

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COMMENT
Bombardier Inc (B)(BBD.B-T) 

December 15, 2017

Thinks this has finally turned the corner. It is definitely risky. New management continues to deliver on goals and milestones. He believes that the sum of the parts valuation is at $3.75 and that the C series is worth another $.72. He is modelling 30% EBITDA growth 2017-2020, and it is trading at a reasonable valuation of 9.2, versus its peers of 11.6. A good risk/reward story.

transportation equip & components

Thinks this has finally turned the corner. It is definitely risky. New management continues to deliver on goals and milestones. He believes that the sum of the parts valuation is at $3.75 and that the C series is worth another $.72. He is modelling 30% EBITDA growth 2017-2020, and it is trading at a reasonable valuation of 9.2, versus its peers of 11.6. A good risk/reward story.

transportation equip & components
Greg Newman

Director & Portfolio Manager, Scotia Wealth Manage...

PricePrice
$3.070
Owned Owned
Unknown

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HOLD

This stock never gets cheap. He expects them to grow their cash flow 6%-11% annually from contract inflation and margin expansion and development. They want to grow their dividend 5% annually. The only thing is, it is very expensive, trading at a 5.9% 2018 pre-cash yield.

Utilities

This stock never gets cheap. He expects them to grow their cash flow 6%-11% annually from contract inflation and margin expansion and development. They want to grow their dividend 5% annually. The only thing is, it is very expensive, trading at a 5.9% 2018 pre-cash yield.

Utilities
Greg Newman

Director & Portfolio Manager, Scotia Wealth Manage...

PricePrice
$44.240
Owned Owned
Unknown

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PAST TOP PICK
Bank of Nova Scotia(BNS-T) 

December 15, 2017

(A Top Pick Dec 9/16. Up 11%.) Had thought the banks were a good deal because of a rebound in the economy in front of us. Also felt that this had the best mix at the time. They’re also trading at an attractive valuation. All these things are still there. Still a buy.

banks

(A Top Pick Dec 9/16. Up 11%.) Had thought the banks were a good deal because of a rebound in the economy in front of us. Also felt that this had the best mix at the time. They’re also trading at an attractive valuation. All these things are still there. Still a buy.

banks
Greg Newman

Director & Portfolio Manager, Scotia Wealth Manage...

PricePrice
$82.160
Owned Owned
Yes

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PAST TOP PICK
Cara Operations Ltd.(CARA-T) 

December 15, 2017

(A Top Pick Dec 9/16. Up 3%.) This really hasn't come to fruition yet. He chose it for its discounted valuation. Trading at around 9X versus same restaurant peers that are trading around 15X that have growth. It has been impacted by minimum wage hikes. He is looking for 3% restaurant sales growth over 2018 from a rebound in Calgary and the strong Québec. A very good name to be owning.

food services

(A Top Pick Dec 9/16. Up 3%.) This really hasn't come to fruition yet. He chose it for its discounted valuation. Trading at around 9X versus same restaurant peers that are trading around 15X that have growth. It has been impacted by minimum wage hikes. He is looking for 3% restaurant sales growth over 2018 from a rebound in Calgary and the strong Québec. A very good name to be owning.

food services
Greg Newman

Director & Portfolio Manager, Scotia Wealth Manage...

PricePrice
$25.780
Owned Owned
Yes

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BUY
Canadian National R.R.(CNR-T) 

December 15, 2017

This probably has a better case for growth than Canadian Pacific (CP-T). Their 10% growth rate is pretty well in the bag with market share gain. They have slightly higher ORs than what the market expects, but that is probably in the stock. He likes this and it will probably go higher.

Transportation

This probably has a better case for growth than Canadian Pacific (CP-T). Their 10% growth rate is pretty well in the bag with market share gain. They have slightly higher ORs than what the market expects, but that is probably in the stock. He likes this and it will probably go higher.

Transportation
Greg Newman

Director & Portfolio Manager, Scotia Wealth Manage...

PricePrice
$103.350
Owned Owned
Unknown

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BUY
Canadian Pacific Rail(CP-T) 

December 15, 2017

He is modelling 12% EPS growth and is trading at a not a bad multiple compared to the group. He likes this and it will probably go higher. In a pinch, he thinks this is a better value than Canadian National (CNR-T) and it would be one he would be buying.

Transportation

He is modelling 12% EPS growth and is trading at a not a bad multiple compared to the group. He likes this and it will probably go higher. In a pinch, he thinks this is a better value than Canadian National (CNR-T) and it would be one he would be buying.

Transportation
Greg Newman

Director & Portfolio Manager, Scotia Wealth Manage...

PricePrice
$230.050
Owned Owned
Unknown

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COMMENT
Dream Office REIT(D.UN-T) 

December 15, 2017

On Q3, they substantially completed most of their asset sales for $1.6 billion. The balance sheet is in much better shape. Has material exposure to the Toronto market which is very hot. Payout ratio is fine on 2018, but will be better in 2019. Through the asset sales their funds from operations dropped 8% 2017-2019. It’s a much better quality name now than it was. Really pricey trading at about 20X. This is one he would be selling Calls on.

property mngmnt/investment

On Q3, they substantially completed most of their asset sales for $1.6 billion. The balance sheet is in much better shape. Has material exposure to the Toronto market which is very hot. Payout ratio is fine on 2018, but will be better in 2019. Through the asset sales their funds from operations dropped 8% 2017-2019. It’s a much better quality name now than it was. Really pricey trading at about 20X. This is one he would be selling Calls on.

property mngmnt/investment
Greg Newman

Director & Portfolio Manager, Scotia Wealth Manage...

PricePrice
$22.640
Owned Owned
Unknown

Must be logged in to use chart
COMMENT
Encana Corp(ECA-T) 

December 15, 2017

The balance sheet has gotten a lot better, but still not ironclad. Trading at 2.2X Debt to Cash Flow for 2018. If oil/gas gets really challenged, that could be a problem. It’s still not cheap on a 2018 multiple, but they have really nice production growth. Thinks they are going to do 17% over his forecast, which leads to Cash Flow per share of about 35%. Balance sheets are going to look a lot better in 2019 and their valuations are going to start to look better at that time. They had a bad debt situation a couple of years ago, but have had a Herculean turnaround. He probably would not want to be in the energy sector at these levels.

oil/gas

The balance sheet has gotten a lot better, but still not ironclad. Trading at 2.2X Debt to Cash Flow for 2018. If oil/gas gets really challenged, that could be a problem. It’s still not cheap on a 2018 multiple, but they have really nice production growth. Thinks they are going to do 17% over his forecast, which leads to Cash Flow per share of about 35%. Balance sheets are going to look a lot better in 2019 and their valuations are going to start to look better at that time. They had a bad debt situation a couple of years ago, but have had a Herculean turnaround. He probably would not want to be in the energy sector at these levels.

oil/gas
Greg Newman

Director & Portfolio Manager, Scotia Wealth Manage...

PricePrice
$14.270
Owned Owned
Unknown

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TOP PICK
Enbridge(ENB-T) 

December 15, 2017

This has been a tax loss selling target. There has been concern over their debt, funding of their dividend growth, whether they would be able to continue to grow at 10%, line 3 regulatory approvals, funding for their projects. Thinks it has gotten oversold and is a bit of a coiled spring. 2018 Line 3 should hit a lot of regulatory milestones. The main line volume outlook should probably clear, and he models a decent growth rate over the next couple of years. Trades at a 9.2% 2019 free cash yield, which is cheap for this. Dividend yield of 5.4%. (Analysts’ Price Target is $60.)

oil/gas pipelines

This has been a tax loss selling target. There has been concern over their debt, funding of their dividend growth, whether they would be able to continue to grow at 10%, line 3 regulatory approvals, funding for their projects. Thinks it has gotten oversold and is a bit of a coiled spring. 2018 Line 3 should hit a lot of regulatory milestones. The main line volume outlook should probably clear, and he models a decent growth rate over the next couple of years. Trades at a 9.2% 2019 free cash yield, which is cheap for this. Dividend yield of 5.4%. (Analysts’ Price Target is $60.)

oil/gas pipelines
Greg Newman

Director & Portfolio Manager, Scotia Wealth Manage...

PricePrice
$49.890
Owned Owned
Yes

Must be logged in to use chart
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