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Stock Opinions by Stephen Groff

N/A

Market. He cannot talk about Hydro One and there is a process in place and it is best if he does not talk about it. There is a whole process that takes place to replace the board. In the markets it is a real mixed bag out there. There are a lot of one off opportunities. Energy is interesting. In general the valuations are not as compelling as they were a couple of months ago except for a couple of high quality players. The market is more stretched in the US. He is a bottom up stock picker. Brazil is pretty inexpensive and there are parts of Europe that are cheap too.

Unknown
WEAK BUY

It is not a bad alternative for individuals in their retirement years. You need to have your return expectations in check. You are getting same property NOI in the single digits. They are in the process of high grading their real estate and will be left with more core urban centers typically near transit. You can't expect more than single digit returns.

property mngmnt / investment
BUY

He really likes the company. He likes the management team with an unbelievable long term track record. There were concerns about fuel margins. There is store rebranding so it will be circle K all over. He really increased his position earlier in the year. He thinks you are paying a very fair price for the business and could hold it for a fair amount of time.

food stores
BUY

He thinks they have an outstanding CEO. They had a tough start to the issue with well publicized issues and now they are resolved. They are getting more efficient with their capital stock. They run longer trains with shorter dwell times. He thinks they can grow the dividends. He prefers this to CNR-T because of what CNR has to invest in the next few years.

Transportation
BUY

He still likes it here. It rebounded from its lows. A lot of energy companies have very high decline rates. This one has a low decline rate. This company is truly a free cash flow machine. He likes how they are de-levering. He feels more comfortable with this one vs. SU-T. He prefers the cash flow profile given capital expenditures over the next few years.

oil / gas
BUY

It is a large holding in a number of his funds. It has a nice dividend and the service revenues are good. They are getting better. They have the best margins in the space and have the best opportunities for 5G because they can roll out faster. He trusts them in terms of allocating capital well. They are more profitable than their peers so they can better survive any price wars.

telephone utilities
BUY

They did M&A that did not add shareholder value until now. They sold half their business to Blackstone. It will be busy for the next couple of years as they deal with stranded corporate costs. Their tax business should improve over time from the mid single digits.

publishing / printing
PAST TOP PICK

(A Top Pick Sep 6/17, Up 27%) They are still making progress on a recent acquisition. It is a high quality business that can continue to invest as they are smart allocators of capital. The barriers of entry are very high.

chemicals
PAST TOP PICK

(A Top Pick Sep 6/17, Up 96%) He continues to like it and thinks it is still at an attractive valuation given the business model. Since the acquisition they have continued to deliver the cash flow growth. They have a good growth trajectory still.

0
PAST TOP PICK

(A Top Pick Sep 6/17, Up 28%) He does not like it much anymore and sold it. You have to trust the execution of management. The fact was they had an issue and said it was fixed. They had a follow up issue and then another and he felt it was out of control. It rallied to an attractive sell price.

consulting
BUY

It is an auto play company. Very low capital intensity. When you look at their end markets, the transition to electric will benefit them. It is a well run company and they buy back a lot of their stock. It is attractively valued but they are exposure to certain end markets like construction.

Automotive
BUY

He likes the business and the model and the valuation is good. They had to fix their reputation in Canada. They are taking that issue very seriously and are addressing it. He thinks the leverage is manageable in this company.

food services
BUY

He still likes this name. It has performed well over time. They are selling some properties to build the attractive portion of the business. You get a fair build in the business. It is attractive but not a Top Pick today.

0
DON'T BUY

He does not own any Canadian banks. He looks at the level of consumer leverage and the economy. They have been good stocks over the long term but he thinks going forward there are better opportunities to invest money.

banks
BUY

Chile and Western Canada are huge markets. They are starting to consume cash for working capital but they are a good business.

wholesale distributors
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