Scotia Wealth Management
Latest Top Picks
Reminds him of MFC of a few years ago--can't get out of its own way. There's potash oversupply. Weak global demand. NTR missed Q3 and lowered guidance. Suffered their worst-ever weather in 2019. Then there's the trade war. The bull argument is that NTR hasn't been this cheap in a long time, trading at 15x 2020; its retail EBITDA were up sharply last quarter. He feels potash woes will pass soon and NTR's EPS will rise 36% this year. NTR is buying back their shares and boast a strong dividend. This is a contrarian call.
Reminds him of MFC of a few years ago--can't get out of its own way. There's potash oversupply. Weak global demand. NTR missed Q3 and lowered guidance. Suffered their worst-ever weather in 2019. Then there's the trade war. The bull argument is that NTR hasn't been this cheap in a long time, trading at 15x 2020; its retail EBITDA were up sharply last quarter. He feels potash woes will pass soon and NTR's EPS will rise 36% this year. NTR is buying back their shares and boast a strong dividend. This is a contrarian call.
Nasdaq outlook for 2020? The Nasdaq will rise this year, because the FANGs remain cheap. MSFT is a great company, but he doesn't like its current levels. He models 10% growth rate for it. But at 25x earnings, MSFT is too pricey. Buy FB or Alibaba instead; they have lower PEs.
Kinder Morgan sold 5% of PPL shares, then the stock went up--so that overhang is now gone. Also, PPL just released details of their new petrochemical project, which helps de-risk PPL. That's why this stock jumped $2. Dividend is growing by 6%. He expects 8% free cash flow per share growth. PPL is a good, growing name with new projects. The whole sector is expensive though. A fine name overall at the current price.
Kinder Morgan sold 5% of PPL shares, then the stock went up--so that overhang is now gone. Also, PPL just released details of their new petrochemical project, which helps de-risk PPL. That's why this stock jumped $2. Dividend is growing by 6%. He expects 8% free cash flow per share growth. PPL is a good, growing name with new projects. The whole sector is expensive though. A fine name overall at the current price.
VET says its capex and dividend are fully funded down to $55 WTI. VET is cheap, and the balance sheet is okay. Pay ratio is around 101%. Problem is there will be -4% negative cash flow per share growth. The only hope is that oil prices will least stabilize or rise--and he doesn't know. VET is not bad, otherwise look at WCP or Peyto as a dividend oil stock.
VET says its capex and dividend are fully funded down to $55 WTI. VET is cheap, and the balance sheet is okay. Pay ratio is around 101%. Problem is there will be -4% negative cash flow per share growth. The only hope is that oil prices will least stabilize or rise--and he doesn't know. VET is not bad, otherwise look at WCP or Peyto as a dividend oil stock.
(A Top Pick Jan 18/19, Up 30%) Bought it when the market was too cautious. So many reasons to like this: ongoing revenues from Google search; value creation with Maps and Waymo; ad growth; free cash flow is returning. He see 70% EPS growth at 22x PE. This is better than even MSFT.
Gold picks? He predicted gold would breakout and it has. Gold is way above its 20-day moving average. Interest rates are low, and there are many geopolitical problems, both of which are tailwinds. Gold is your friend. Agnico-Eagle and Newmont are the best picks, and he is adding on weakness. Gold is the place to be now, in a bull market.
Gold picks? He predicted gold would breakout and it has. Gold is way above its 20-day moving average. Interest rates are low, and there are many geopolitical problems, both of which are tailwinds. Gold is your friend. Agnico-Eagle and Newmont are the best picks, and he is adding on weakness. Gold is the place to be now, in a bull market.
Oil Oil is tricky. It's a broken market that may or may not be coming back. Some have returned to gold too early. Over the decades, oil has risen and fallen largely due to spin (i.e. Peak Oil). He picks up a little oil when the stocks get cheap. Oil is a messy space. Of the juniors, WCP is his favourite. SU-T is the senior one he likes. But he really likes Advantage (but they deal in natural gas, not oil).
Oil Oil is tricky. It's a broken market that may or may not be coming back. Some have returned to gold too early. Over the decades, oil has risen and fallen largely due to spin (i.e. Peak Oil). He picks up a little oil when the stocks get cheap. Oil is a messy space. Of the juniors, WCP is his favourite. SU-T is the senior one he likes. But he really likes Advantage (but they deal in natural gas, not oil).
CP vs. CN Own both, but he prefers the cheaper CP. Same growth rate; he sees 10% EPS growth. Crude by rail will extend to 10 years and not stop soon. CP's balance sheet is weaker, though. CN trades at 18x PE, CP and 15.6x.
