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Rob McConnachie
Chief Investment Officer at Dixon Mitchell Investment Counsel
Member since: Apr '13 · 34 Opinions
Rating Card
Rating
Big Win
Win
Neutral
Loss
Big Loss
Stock Opinions by Rob McConnachie
N/A
Market. No one can predict the future but there are going to be lower returns in the future. Valuations are quite high and interest rates are low but that is because growth has been slow. He has over a 10% exposure to real estate, which is higher than the TSX. This has benefitted from low interest rates.
Unknown
N/A
Unknown
COMMENT
In light of potential trade wars, could this rail come down? Both of our rails are great moat businesses and incredibly well run. They are cyclical and are capital intensive businesses. If you look at the long term, their maintenance capital is higher than they book for depreciation, so their earnings quality is lower. Lower commodities would impact the bottom line. They are highly owned by US shareholders.
Transportation
BUY
Some of the outlook for the auto sector which is negative is reflected in their price. MG-T gives you a more diversified part of the car. LNR-T is mostly drive train components and these are still needed for electric cars. The parts don't change as much as more cosmetic parts so when you tool up for a part the investment lasts far longer.
HOLD
It is a very well run company. They run it like a private company. They are very focused on the return of incremental capital. They have never had dilution in share capital since the day they went public. They are not cheap but these companies usually are not. It is a little overvalued at present.
packaging / containers
HOLD
He owns quite a few of the Dream stocks. They have done well. US investors must be looking up here. The real estate market is really strong. Anytime he has sold a really good company on valuation he has regretted it.
property mngmnt / investment
BUY
It has a nice dividend but is nicely positioned so they have a lot of tie-ins without having to spend a lot of capital. It is a nice balance between income and growth.
pipelines
DON'T BUY
It is a commodity company. There is no scarcity in potash. Commodity companies don't control their own risk. He has less than 5% of his holdings in Commodities.
agriculture
N/A
Quantitative Stock Picking. You buy a company's future value of its cash flow stream and then discount it back for how much risk you are taking. Fixed income has very low risk. With equities it is hard to figure out how sustainable the cash flow is. Rail companies, for example, are easy to be sure of. Moats can be many, many things. They can be legislated, natural like the rails, or brands. It could be network economics such as with a credit card. This could manifest itself in high returns on capital.
Unknown
BUY ON WEAKNESS
It is a unique company. He expects their earnings to drop but they are counter cyclical because they harvest their inventory in parts of the cycle so their cash flow actually goes up quite high then. The dividend is quite safe. You have to look at cash flow over a 10 year period. Below $20 is probably not a bad entry point.
steel
COMMENT
It is a pretty solid company. They have risk from a fiscal policy which would be lower on PPL-T. You have fiscal risk on all the telecoms right now.
BUY
Great company and sustainable. It is a great long term hold.
food stores
BUY
It is a core holding. It is a very well run operation. They are smart at going into areas early. A great core holding for any investor.
management / diversified
STRONG BUY
It is a core holding. It is considered the safest utility. It is near the top of his list right now.
electrical utilities
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