Opinions by Lorne Zeiler | StockChase
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Lorne Zeiler

Portfolio Manager & Wealth Advisor

ON STOCKCHASE SINCE Jul 2016

TriDelta Financial


Opinions by Lorne Zeiler


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2016-07-29

N/A
A Comment -- General Comments From an Expert 

Sell before ex dividend date or after? The finance theory is basically that the market actually prices in the dividend when people are pricing out the stock. He back tested and found it made no difference at all on the earnings.

Lorne Zeiler

Portfolio Manager & Wealth Advisor, TriDelta Financial

Price: $0.020
Owned: _N/A

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2016-07-29

N/A
A Comment -- General Comments From an Expert 

A reasonable high this year for the TSX? That would be a question of what we see happening with gold prices, which has been a huge contributor to the overall returns to the TSX. Gold prices have not moved nearly as much as the stocks, many of them have doubled. Energy has gone up, but oil prices have come down by about 20%, yet energy stocks are generally holding in pretty well, having fallen off by about 7%. It wouldn’t surprise him to see another 3% from here.

Lorne Zeiler

Portfolio Manager & Wealth Advisor, TriDelta Financial

Price: $0.020
Owned: _N/A

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2016-07-29

N/A
A Comment -- General Comments From an Expert 

How much do interest rates have to increase before high dividend payers, like REITs and utilities, get hit with selling? If you got one move by the Fed, it could easily lead to a 5%-10% selloff.

Lorne Zeiler

Portfolio Manager & Wealth Advisor, TriDelta Financial

Price: $0.020
Owned: _N/A

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2016-07-29

COMMENT
A Comment -- General Comments From an Expert 

Canadian financials? Last year, even though earnings were pretty good, everyone was worried about where growth was going to come from and what was going to happen to the overextended consumer. The banks fell about 10%. This year has been the exact opposite. The banks have had a pretty good run. Banks, from a long term perspective, are a great hold, and are basically trading in line with their historical average of about 12-14 times earnings. You get a great dividend, between 3.5% and 4.9%. It wouldn’t surprise him that if there is an issue with rates going up, banks could be hurt. Lifecos haven’t done nearly as well as banks, and are now trading below BV. You get a higher dividend than what you typically get from banks, and picking them up at a lower multiple. Also, they have a larger business tied to the wealth management space, so there is less concern with interest rates.

Lorne Zeiler

Portfolio Manager & Wealth Advisor, TriDelta Financial

Price: $0.020
Owned: Unknown

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2016-07-29

COMMENT
A Comment -- General Comments From an Expert 

Business development companies (BDCs)? A very broad category which goes all the way from private equity to private debt. The amount of leverage they can have can get up to a level of 200% or more, or more recently at 25%-50%. His firm has been looking a lot at private markets and private debt space. It is a great opportunity. Regulations have made it very difficult for the banks to lend to certain areas, so they are very slow in acting. He has been able to find a lot of alternative strategies paying in the 6%-7% range. Two of the better names are Apollo (AINV-N) giving a 14% distribution and BDC (?). You really have to look at the individual names, because the characteristics of that sector are weighted.

Lorne Zeiler

Portfolio Manager & Wealth Advisor, TriDelta Financial

Price: $0.020
Owned: Unknown

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2016-07-29

COMMENT
A Comment -- General Comments From an Expert 

REITs or energy for dividends of 4%-6%? If you are looking to try to generate income, REITs are probably a better play, because the energy sector is going to be more of a reflection of what is happening with the energy price, giving you a lot more volatility than what you would see in the REIT sector.

Lorne Zeiler

Portfolio Manager & Wealth Advisor, TriDelta Financial

Price: $0.020
Owned: Unknown

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2016-07-29

COMMENT
A Comment -- General Comments From an Expert 

Which bank pays the best dividend for the next 3-5 years in a TFSA? The National (NA-T) pays the highest at 4.9%. He likes this in that it hasn’t moved as much as Bank of Nova Scotia (BNS-T). If ranking in terms of quality, Toronto Dominion (TD-T), Bank of Montréal (BMO-T). In terms of more compelling valuations and upside, you have Bank of Nova Scotia (BNS-T), CIBC (CM-T) and National (NA-T). His one caution with CIBC is that they made a major acquisition in the US, so will likely do an equity raise. If you can wait for that equity raise to happen, this would probably be a little cheaper.

Lorne Zeiler

Portfolio Manager & Wealth Advisor, TriDelta Financial

Price: $0.020
Owned: Unknown

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2016-07-29

COMMENT
AbbVie Inc. (ABBV-N)

Its main product is Humira which works on the immune system. Basically for rheumatoid arthritis, IBD, any of the diseases that act on the immune system. Accounts for close to 60% of their revenue. They just had a great quarter. Saw 17% increase in sales for Humira. Has a fantastic pipeline and very aggressive growth targets. Trades at a pretty reasonable valuation considering it is a growth company. They anticipate double digit growth in each of the next 4 years, and to get revenues up to $37 billion a year. If successful and are able to get their operating margins where they say, by 2020, based on current valuations of 14.5X earnings, you will be paying about 8X.

Lorne Zeiler

Portfolio Manager & Wealth Advisor, TriDelta Financial

Price: $66.230
Owned: Yes

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2016-07-29

HOLD
Canadian National R.R. (CNR-T)

Trading at fair value, but doesn’t expect a lot of upside in the near term. He really likes that even though they have had declining revenues by about 11%, they are the leaders in their industry, the most cost-effective player and have been able to raise prices. In spite of the revenue decline, they are only down about 2.5% in terms of earnings. A cautionary note for the near term is that transport stocks tend to move with the market, and often tend to lead the market. If we see a 5%-10% pullback, this is good to follow. Trading at 18X forward earnings, a level that it has been trading at for the last 3-4 years. Doesn’t expect a lot of earnings growth in the near term. 16X forward earnings would be a great entry point. Dividend yield of 1.8%.

Transportation
Lorne Zeiler

Portfolio Manager & Wealth Advisor, TriDelta Financial

Price: $82.770
Owned: Yes

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2016-07-29

TOP PICK
Computer Program & Systems (CPSI-Q)

Provides end to end solutions for patient care for small, rural hospitals, acute care facilities and financial planning and accounting software. They made an acquisition and lost some clients as a result, and the stock came down significantly. They see some great synergies, and are actually ahead of schedule. There are a lot of positives going on with the company. It has a great pipeline. They figure about 150% growth in terms of sales. There is a new compliance regulation coming out, which a lot of smaller players will not be able to comply with. Trading at about 11X forward earnings. Dividend yield of 6.46%.

Lorne Zeiler

Portfolio Manager & Wealth Advisor, TriDelta Financial

Price: $39.640
Owned: Yes

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2016-07-29

HOLD
DH Corporation (DH-T (Dead))

Have done a major restructuring, and did a major acquisition. While a solid company, you are likely not going to see the visibility, i.e., an increase in earnings related to the acquisition, for at least 12 months. He just sold his holdings. Thinks the 4% dividend yield is safe. Below $30 would not be a bad entry point.

other services
Lorne Zeiler

Portfolio Manager & Wealth Advisor, TriDelta Financial

Price: $32.250
Owned: No

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2016-07-29

BUY
Enbridge Income Fund Holdings (ENF-T)

When Enbridge (ENB-T) has a mature project, they push it over to this, and then it becomes an income vehicle. Pays a very high dividend. In terms of visibility, they put more projects on so it is trading at a very reasonable multiple. They can easily pay the dividend, which is close to 6% now. They expect 10% plus increases per year going into 2019. If you take the current price and go into 2019, that is going to be a yield of close to 8%. A solid underlying company, but there will be some volatility.

oil/gas
Lorne Zeiler

Portfolio Manager & Wealth Advisor, TriDelta Financial

Price: $32.500
Owned: Yes

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2016-07-29

COMMENT
Johnson & Johnson (JNJ-N)

Trades at a higher multiple, because it is a better quality company. Very well-managed. There are 3 income streams 1) pharmaceuticals, 2) devices and 3) the consumer. This is basically international. The dividend is likely to grow, but slowly. This is a name that will hold up if we get market declines. He wouldn’t expect significant growth.

biotechnology/pharmaceutical
Lorne Zeiler

Portfolio Manager & Wealth Advisor, TriDelta Financial

Price: $125.230
Owned: Unknown

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2016-07-29

TOP PICK
LyondellBasell Industries (LYB-N)

Basically a manufacturer, designer and technology company around plastics and polymers. They also have a refining division. Valuation is really cheap. The company did quite well, particularly when there was a disparity between oil and gas. Trading at about 7X forward earnings. He anticipates earnings to be on a declining scale in 2016, but likely to stabilize in 2017. Dividend yield of 4.52%.

INDUSTRIAL PRODUCTS
Lorne Zeiler

Portfolio Manager & Wealth Advisor, TriDelta Financial

Price: $75.260
Owned: Yes

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2016-07-29

TOP PICK
BMO S&P/TSX Laddered Preferred (ZPR-T)

Rate reset preferreds started coming out in 2008. They declare a dividend which has a formula attached to it. Every 5 years that rate gets reset based on a formula, a 5-year Government bond and some kind of spread. Sold off a lot last year, because the yield curve flattened significantly and there was a fear the rate resets were going to be a lot lower. However, what has tended to happen, is that you are now getting yields of about 5.5%. Actually one of the few securities that if interest rates go up, you are going to benefit from it. He could see about 5%-10% growth, plus reset rates going higher if rates do increase.

E.T.F.'s
Lorne Zeiler

Portfolio Manager & Wealth Advisor, TriDelta Financial

Price: $9.960
Owned: Yes

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