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Stock Opinions by Lorne Zeiler

COMMENT

Volatility. This week has been a reminder of market volaility. It's normal thought not fun to see 5-10% corrections. It will take time to work out this volatility. Some stocks are still overvalued, while some are bargains. The worst thing is getting upset and selling, then missing on the upside. Take this opportunity to take stock and get back to your appropriate allocation. We've seen a lot of program trading and many traders shorting the VIX which had an effect on the markets.

Unknown
BUY

A past top pick. His biggest industrial U.S. holding. They make plastics and have a crude refinery on the Gulf Coast. Recent dip hurt by Hurricane Harvey then bounced back. Strong earnings growth. Reasonable multiple of 11x 2018 projected earnings. LYN expects increase in profitabilty and demand.

INDUSTRIAL PRODUCTS
BUY

If you're an income-oriented investor, it's a good time to enter this name. Don't expect much earnings growth. Alarmforce was a good acqusition. Dividend will likely rise. Rising interest rates in Canada won't mirror those in the U.S. and expects only one or no hikes here, so will lessen impact on BCE. Reasonable valuation.

telephone utilities
COMMENT

Robo advisors. Active management is the way to go for most investors, particularly in these times. Robos rely on passove ETFs, so it's hard to pick bottoms and buy individual stocks. For some small investors, robos are not a bad way to start and start saving, because those people don't have the time to study stocks and investments. But in your 40s and 50s you need an advisor to consider taxes and financial planning.

Unknown
COMMENT

He's seen all the power names come down even before the downturn. Dividend will likely be fine. He doesn't own it (owns Fortis and Emera instead). This space has been oversold. People are overly sensitive about interest rates rising. Could see a bounce, but doesn't expect that in the short term. 8.2% yield.

oil / gas
DON'T BUY

Marijuana stocks. When you invest in commodity stocks and that commodity keeps falling, with marijuana to fall to $7/gram, you don't want to be in them. At least the ETF HMMJ-T gives you broad access to this space, but he wouldn't be in it at all. The market value of cannabis nowhere resembles what the market could be in the near term. There are few competitive advantages and these business are at over-capacity. Eventually these stocks will make some money, but he'll stay away from this for now.

Unknown
WEAK BUY

Heowns Sunlife instead. Of all the large Canadian financials, Manulife has the strongest earnings growth projections at 15% largely from more fees in asset management side and from their Asian enterprise. Sunlife has greater consistency in earnings growth and higher yield. Manulife's U.S. operations will benefit from U.S. tax cuts.

insurance
BUY

Has increased software sales which boosted share price. He sold a month ago. Valuation still good. Will have cash from U.S. tax bill. Still a good company.

electrical / electronic
HOLD

Each year they've been increasing it by 10%. Price has been bouncing between $27-33, but it's now's attractive. Q3 missed because of Enbridge's parent, Enbridge Income Fund, had a miss. Also hurt by interest-sentitive fears. Have commitments on their pipelines. They have storage. Also have renewable resources. Good company for an income investor. Probably won't jump to $33 immediately, because the whole space has been hit, but collecting the yield is good. Yield 8.3%.

oil / gas
HOLD

Stock hit 52-week lows lately. More to do with investors being too sensitive to interest rates and hurt by negative sensitive on Canadian oil. 90% of its earnings are regulated and has a solid portfolio with growth prospects in renewables, such as solar in Florida and hydro and wind in the east. Will see consistent growth and dividend increases. A miss in Q3 along with the oil space, but an over-4% dividend. Near-term won't see a change in stock price, but patience will be rewarded.

mngmnt / diversified
PAST TOP PICK

(A Top Pick April 20/17, Up 11%) Gets access to European and Japanese markets that he's been adding to. Has lower volatility, choosing stocks with a lower beta. It underperformed the overall EAFE index, but still a good area to be in. Promising changes in Japan with huge increase of women in the workforce and increasing immigration to fill jobs. Europe just had its highest PMI.

E.T.F.'s
PAST TOP PICK

(A Top Pick April 20/17, Up 10%) Recent pullback partially due to scare about their talcum powder. JNJ is the biggest, most diversified healthcare company in the world. Deserves to trade at a premium—16 times next year earnings. It should be worth more. Divident solid. Great pipeline in pharmaceuticals and medical devices. Healthcare is his biggest overweight in the U.S.

biotechnology / pharmaceutical
PAST TOP PICK

(A Top Pick April 20/17, Up 12%) Huge asset management platform. Strong stable in India. Increased in Canada with Excel Funds. Will see near-term growth of 8% and will benefit from U.S. tax cuts. Continues to own it.

insurance
WEAK BUY

This is a good space. High dividends. Growth. Positive demographics. Doesn't know GWF as well as Sunlife or Manulife, but should get moderate to strong returns.

insurance
COMMENT

Doesn't own it (owns BCE and Telus instead). Rogers is a good, solid company, but has sold off because of interest rate increase jitters and seen to be in a low-growth industry. They've invested a lot, but have made money from the Toronto Blue Jays.

Cable
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