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Stock Opinions by John Wilson

N/A

Markets. A year from now we will not be looking at such low crude prices. It is a classic supply/demand imbalance and since we are not going into a global recession, it will come into balance. The lowering of interest rate has had a 3 standard deviation effect in how fast the currency has gone done. This could hold the bank of Canada back from cutting rates this week. No one wants their currency sliding this quickly.

Unknown
DON'T BUY

He would not buy it. The risk/reward profile is too high. They bet the farm on the ‘C’ series. They are trying to get very large orders from clients. The purchasers want to service them for a long time but it is questionable whether BBD.B-T will be around that long. It makes the prospect of getting more orders much, much more difficult. It is a coin toss.

transportation equip & components
DON'T BUY

It is always cheap. It has had a challenging growth outlook because of the lack of growth in the PC market. Storage is moving to solid state and away from their technology.

computer software / processing
BUY

It is in a category he would look in. Their output is in US$ and their costs are in CAD$. It has been out of favour for the last few years. He thinks the outlook for gold is better going forward than for the last 2 or 3 years. This is a well managed company with lots of funding in place.

precious metals
BUY

It went through a great deal of turmoil. It is a great run business and safe. You need to keep in mind food inflation. Most food comes in US dollars and the increased cost is passed on to consumers. This is one of the better names.

food stores
DON'T BUY

It is interesting. When oil first declined, the price moved up, thinking there was some temporary benefit. The price of AC-T has now come lower. It has to do with pricing and capacity. There is always a concern with airlines that they won’t manage the business well. The industry has benefited from consolidations. It is looking more interesting here, but he is waiting for it to make a base.

Transportation
DON'T BUY

An incredibly well run company that have done a terrific job over the last decade. A big part of their problem now is the oil sector and Shaw. Shaw will be quite aggressive against Telus (T-T). He thinks you can do better elsewhere, e.g. with Rogers (RCI.B-T).

telephone utilities
PAST TOP PICK

(Top Pick Nov 17’14, Down 7.69%) Credit card chips and payment chip inside the iPhone 6 and they make chips in your car. They announced an acquisition that closed last fall. Then the concerns of China came up. They have been dragged down by Apple concerns.

INDUSTRIAL PRODUCTS
PAST TOP PICK

(Top Pick Nov 17’14, Up 12.15%) They generate a lot of free cash flow. They have de-levered. They benefit from rates.

investment companies / funds
PAST TOP PICK

(Top Pick Nov 17’14, Up 30.44%) A long term holding for him. An incredibly well run business. Cash flow continues to rise. People are looking for what acquisition they do next. It offers good value, is at a discount to the group and he wants to still own the name.

consulting
BUY

Financial Recommendation. He likes Intercontinental Exchange. He has WCF-N. In Canada he prefers RY-T and owns it. You can do EFN-T, which has come off quite a bit. He thinks it can grow at a very high growth rate and it is not reflected in the stock price.

0
WATCH

A double from 2012. It came off about 20-25% recently. There is a concern on the asset side about investment of premiums and how much is invested in energy. The second biggest part of their growth was in Asia. Those are the headwinds. The stock eventually will price in the energy piece. He thinks this is starting to look a little more interesting.

insurance
BUY

He owns two of their subsidiaries because of a better growth profile. It is sitting at its highs. You are owning US$ assets. It has great global exposure. You will do well, but he prefers going down the chain for more pure plays.

management / diversified
DON'T BUY

He owned it earlier in the cycle. The concern is where you peak. At 18 million units in the US in a year is about as good as it is going to get. They announced a nice deal with BMW last week. It is more of an industry call. He thinks markets will struggle right now as we decide if we are going into global recession.

Automotive
WAIT

The rails have had a difficult last 12 months. There was a decline in shipments from the agricultural sector. Crude by rail is declining and the fracking sand shipments are declining also. Coal is a big component, too. Intermodal traffic is also weak. He thinks it is early to be in the rails.

Transportation
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