Brian Madden
Chief Investment Officer at First Avenue Investment Counsel
Member since: Aug '16 · 1880 Opinions
Rating Card
Premium content| All | 
Rating
| 
Big Win
| 
Win
| 
Neutral
| 
Loss
| 
Big Loss
|  |
|---|---|---|---|---|---|---|---|
| 4.7 | 221 22.57% | 238 24.31% | 162 16.55% | 206 21.04% | 152 15.53% | ||
| 1 Month | 4.81 | 8 3.19% | 83 33.07% | 89 35.46% | 67 26.69% | 4 1.59% | |
| 6 Months | 4.93 | 42 18.03% | 71 30.47% | 33 14.16% | 56 24.03% | 31 13.30% | |
| 12 Months | 4.96 | 61 27.60% | 48 21.72% | 23 10.41% | 34 15.38% | 55 24.89% | |
| 2 Years | 4.5 | 64 35.56% | 22 12.22% | 13 7.22% | 35 19.44% | 46 25.56% | |
| 5 Years | 4.32 | 46 48.94% | 14 14.89% | 4 4.26% | 14 14.89% | 16 17.02% |
Stock Opinions by Brian Madden
As recently as a week or two ago, interest-rate derivatives markets have been pricing in close to a 90% chance of a 0.25% rate cut in September. But the market is tightly wound these days after the rally we've seen since April. There's been a step up in risk appetite, FOMO, and the resurgence of zero-day expiry options.
What the chair said at Jackson Hole does certainly validate a rate cut in September, as was widely expected.
Right to script. Everyone waits on pins and needles for the Jackson Hole speech, which often validates ingoing expectations.
In the back half of August, you typically see lighter trading volumes. Once you get the bulk of Q2 earnings results behind you, tend to have light news flow in terms of economic data and corporate earnings releases. And, of course, people take vacations in the weeks leading up to Labour Day. More of the fund flows are retail, and not dominated by professional money. Big players are often sidelined this time of year.
His team is intrigued. The Mag 7 have dominated for close to 3 years. So much so, that their collective weight in the S&P reached an all-time high of just above 34% last week or the week before. Since then, there's been a bit of a rotation away from those names.
Money has flowed to undervalued and underlooked areas of the market. Cyclicals and some interest-rate sensitives have shown leadership in the last 2 weeks relative to the growth stocks.
Family controlled. This whole sector of IT consulting has been for sale YTD. People want to own leading-edge tech, and this isn't it. US is its biggest geography and US government its biggest client base. Concerns of government belt-tightening didn't come to pass.
Pretty good company. Compounded total shareholder returns at double-digit pace over last 10 years, mostly in capital appreciation. Modest dividend. Steady eddy. Fairly low beta. Trading at 15x PE vs. 18x historically. Dip is buyable.
He'd still buy here. Always fireworks around quarterly earnings. It's run up, but fundamentals are outstanding. Clear technical superiority in AI chips. AI infrastructure buildout will keep order books full for a long time. Major beneficiary of AI capex.
No contest. This is the one to own.
About 70% of the business is take-or-pay -- no volume risk or commodity price risk. Another 20% is on fee-for-service contracts, where there is volume risk but no commodity exposure. Rest has commodity exposure to nat gas and oil.
Over 10 years, has been competitive with the TSX. Compounding total shareholder returns just over 10%. A bit better than its energy infrastructure peers. Beta is about 0.7, low risk. Trading at low end of the range. Yield ~5.4%, and growing at a 5% pace for foreseeable future. Good sightline to high-single or low-double-digit return.
US and Canada are logical and natural long-standing historic trading partners, with tightly integrated supply chains. We need to get back to some semblance of normal. Hopefully, most things will be exempt under USMCA and we can get rid of the tit-for-tat tariffs.
If that happens, you'd expect to see trade flows pick up. That would advantage the transportation sector across the board. So both rails would probably be advantaged. Freight recession has gone on for almost 3 years, but stirrings of that changing. Big spike in manufacturing survey; if this is followed by ISM survey, then should be game on for the whole transportation sector. Sector's suffered from overcapacity, lack of pricing power, and tepid volumes.
Between the two, he'd pick CNR. It has the better network. Wildcard is massive east-west merger proposed in the US. See his Top Picks.
US and Canada are logical and natural long-standing historic trading partners, with tightly integrated supply chains. We need to get back to some semblance of normal. Hopefully, most things will be exempt under USMCA and we can get rid of the tit-for-tat tariffs.
If that happens, you'd expect to see trade flows pick up. That would advantage the transportation sector across the board. So both rails would probably be advantaged. Freight recession has gone on for almost 3 years, but stirrings of that changing. Big spike in manufacturing survey; if this is followed by ISM survey, then should be game on for the whole transportation sector. Sector's suffered from overcapacity, lack of pricing power, and tepid volumes.
Between the two, he'd pick CNR. It has the better network. Wildcard is massive east-west merger proposed in the US. See his Top Picks.
Utmost confidence in management. Massive compounding shareholder value over time. Recent results were good. Behind the pace on M&A goal for the year. Could be getting lost amidst AI-driven stories. Vertical markets mean its organic growth rate is low.
He continues to be long and strong, not concerned by recent pullback.
Yield is ~7.3%, pretty high (10-year average is ~5.4%). No doubt about dividend sustainability, grew about 7% a year over last decade. All telcos should see easier earnings comparisons as price war is in the rearview mirror. Peers are distracted with integration. Nice portfolio of non-telecom businesses with faster growth rates. $3B worth of surplus urban real estate to monetize.
Likes how the chart's starting to perk up. Better return than GICs or bonds right now.
Let it go after Q4 results. Concerned that it was reaching saturation in major urban markets. Talked about aggressively pursuing suburban market share, which is harder to serve and likely not as profitable. Slowing growth YOY. Major question marks about fledgling freight business.
