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Stock Opinions by Jason Mann

COMMENT
US releasing oil from SPR today. Government policy has made a bit of a mess of this energy cycle. On one hand, pushing a green energy approach. But in the short term, we just don't have the supply to let us do that. Structural deficit in energy production is causing high prices. Releasing oil from the SPR is a drop in the bucket, but they're also handing out stimulus cheques for high gasoline prices, which encourages people to buy more gas. Government's doing everything it can to fight inflation, and prices at the pump are target #1.
Unknown
COMMENT
Stagflation. That's where prices are going higher and growth comes off the boil, but doesn't have to be recessionary. It's a real threat, with some of the highest inflation since 1970s-80s. Certain sectors do well, and others suffer. Stocks that do well are those that are part of the supply chain, are a scarce resource, and have pricing power: energy, commodities, materials, chemicals, base metals. Consumer staples margins get squeezed. You want to barbell high quality, cash flowing cyclicals such as energy and materials. Avoid some of the most expensive stocks and stocks that need expensive inputs for their products.
Unknown
HOLD
Being taken out. Merger arbitrage is where you buy it while it's being acquired, and you try to pick up the spread. Risk is the deal fails to close. Not a lot more opportunity here from the price offered. He's getting a 6-8% rate of return to hold it till the deal closes.
packaging / containers
COMMENT
Approach to buying stocks. His firm is quantitative. He looks at the facts, rather than reading research or talking to management. He's concerned with price momentum, valuation, and volatility. He wants to buy cheap, rising, stable stocks.
Unknown
BUY
Old tech is different from high flyers that aren't profitable, and these have been hurt the most. SPGI is high quality, solid ROE. Price momentum has come off, baby with the bathwater. Reasonably priced, no debt. Small yield, reasonable payout ratio.
publishing / printing
HOLD
Caught up in supply chain, issues won't be resolved quickly. Top 5% of value, solid balance sheet, 11x price to earnings. Reasonable payout ratio for yield of 3%. Top-notch management, world-class company. If you have time, hold. He'd want to see price momentum before stepping in.
Automotive
HOLD
All-time highs. Earnings beat, dividend raise. Solid company and management. Strong price trend, not expensive, very high ROE. 33x earnings looks quite rich, but it's actually reasonable in light of other metrics. High quality earnings and cashflow.
Consumer Products
WEAK BUY
Has cashflow. Not cheap, but it's a real business. Has a path to profit. If price momentum improves, he could see going long on it. If you can stomach the volatility, you could buy it now.
Technology
BUY
Still extremely cheap, despite the run up last year. Lumber prices are back above $1000 again. Huge cashflow at these prices. Concerns US housing market will slow, but there just isn't enough supply, so demand will persist. No debt, good price momentum and valuation. Can buy here.
west coast forestry
HOLD
Value and price momentum score well. High ROE, 13x price to earnings. Healthy yield of 3%, very reasonable payout ratio. You can own it through the cycles.
biotechnology / pharmaceutical
PAST TOP PICK
(A Top Pick Apr 09/21, Up 19.74%) Bought it as merger arbitrage. He made his target profit of 24% and moved on.
Cable
PAST TOP PICK
(A Top Pick Apr 09/21, Up 20.44%) Yield of 4.3%, reasonable payout ratio. You can hold it for the long run. He's been cutting back on financial exposure in general, because the yield curve is not as favourable and puts pressure on the banks.
banks
PAST TOP PICK
(A Top Pick Apr 09/21, Up 30.65%) Good price momentum and valuation. Solid ROE of 36%. Not an unreasonable price. Quite a bit of demand for this asset class, takeover targets. Won't do well in a recession, but we're not there yet. You could still buy today, hold until momentum and valuation run out.
food processing
HOLD
Banks are struggling with a flattening yield curve, but this can always correct itself. Canadian banks have more resource exposure, so they're doing better than other countries. If you have the timeline, hang on. You can always hang onto the Canadian banks over the long run.
banks
HOLD
Mixed performance, valuation still quite cheap at 5x cashflow, 8x price to earnings. Balance sheet is fine. Fortunes are made and lost with the underlying price of copper. Likes copper in general for electrification of the grid, short supply, and ESG.
Mining
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