Brian Madden
Chief Investment Officer at First Avenue Investment Counsel
Member since: Aug '16 · 1831 Opinions
Rating Card
Premium content| All | 
Rating
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Big Win
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Win
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Neutral
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Big Loss
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|---|---|---|---|---|---|---|---|
| 4.66 | 209 21.86% | 235 24.58% | 158 16.53% | 202 21.13% | 152 15.90% | ||
| 1 Month | 4.78 | 8 3.27% | 81 33.06% | 87 35.51% | 65 26.53% | 4 1.63% | |
| 6 Months | 4.9 | 40 17.39% | 71 30.87% | 32 13.91% | 56 24.35% | 31 13.48% | |
| 12 Months | 4.9 | 58 26.98% | 47 21.86% | 22 10.23% | 33 15.35% | 55 25.58% | |
| 2 Years | 4.45 | 61 34.46% | 22 12.43% | 13 7.34% | 35 19.77% | 46 25.99% | |
| 5 Years | 4.26 | 42 47.19% | 14 15.73% | 4 4.49% | 13 14.61% | 16 17.98% |
Stock Opinions by Brian Madden
We have the classic situation with the market climbing a wall of worry, and there's no shortage of things to worry about. Middle East rocket fire, suspension (but not cancellation) of tariffs, US budget bill. Nevertheless, the market trudges higher, buoyed with some support from corporate earnings but mostly by improving sentiment (waning fear and panic from April).
Over time markets make higher highs, punctuated by short and sharp drawdowns that test the mettle of investors.
There was a lot of frenetic trading activity late Q1 and early Q2. That's been to the benefit of some businesses such as owners of stock exchanges, investment banks, brokerages. You're right though, it does wear out investors, especially when they keep getting head fakes and kneejerk reactions that are frequently misinformation.
Investors would do well do learn the lesson of focusing on the fundamentals and owning good businesses. Don't bury your head in the sand on geopolitics, but don't be ruled by them. Shifting sands shift often. Easier to build robust portfolios that can weather macro headwinds.
Right. What really took out some of the fear premium on hostilities was that, going into last weekend, the price of oil already had $10-15 of geopolitical risk baked in. But then the US waded in and dropped bombs, and the results of that are conflicting.
Latest relief rally in equity markets, especially in the US, is prompted by the very tepid, feeble, symbolic response by Iran to those strikes. Seems to have taken the worst-case scenario (strikes on oil infrastructure or closing of the Strait of Hormuz) off the table. Those events would have been very negative for the global economy and risk assets.
Complex organizational structure and accounting oddities often confound traditional ratio analysis when trying to gauge valuation. You can look at PE (14x) or P/B (2.2x). His team doesn't rely on those metrics. More simplistic and reliable would be the dividend yield; paid for a long time, commitment to growing.
Dividend yield right now is about 0.6%, so on that basis the shares are expensive. For context, over the last decade the average has been 1.5%. So instead, you want to try to identify a secular business trend that will lead to a rerating. He thinks that's the case here. Global leader in private market alternative investments. Benefiting from secular trend away from just investing in publicly traded stocks and bonds. Great leadership.
Pleased to see how the market's revalued it higher. Light at end of tunnel after regulatory scandal. Trying to reset the growth algorithm by September 29 investor day, which gives the new CEO time to assess things.
Great Canadian personal and commercial banking franchise. Good and growing capital markets. Good scale player in wealth and asset management. Still one of the largest banks in the US; growth will be challenging, but he has faith in its creative strategies.
No quarrel with this business. Exemplary operator. Fairly niche geographic footprint, largely in US Midwest. Often the only convenience store in town, rather than competing in larger cities.
Instead, he owns ATD. Should ATD be successful in acquiring 7-Eleven, trade commission will likely require stores to be sold, and CASY would be the logical buyer.
He sold in 2024 when the valuation started looking a bit full. When pandemic inflation hit, "elasticity" was low so that consumers kept buying despite higher prices. Cumulative effect of inflation caught up to them. Not tempted, given slowing macro economy and inflation genie not fully back in the bottle.
In his firm's momentum portfolio. Dominant in Search and leader in digital ads, which are tremendously cash-generative. YouTube is an increasingly valuable ad property. Cloud services growing rapidly, one of top 3 players. Innovative AI investments should pay off nicely. Waymo is interesting for its cash-generating potential.
Sold this in favour of trucking, a more cyclical and higher-torque way to get exposure to recovery in manufacturing and merchandising. Covid explosion in purchasing made for difficult comparisons later, so trucking experienced a 3-year "freight recession".
Still, there's no good reason to abandon the rails. They give you a good franchise and "forever" earnings power. Sector is largely an oligopoly. Those trains should still be rolling 100 years from now. This name is a backbone of the Canadian economy. Tremendous compounder and TSX outperformer.
His firm switched from rails to trucking, a more cyclical and higher-torque way to get exposure to recovery in manufacturing and merchandising. Covid explosion in purchasing made for difficult comparisons later, so trucking experienced a 3-year "freight recession".
Still, there's no good reason to abandon the rails. They give you a good franchise and "forever" earnings power. Sector is largely an oligopoly. Those trains should still be rolling 100 years from now.
Gaining altitude. Technological leadership in medium- and long-range aircraft. Order book looks pretty robust, production slate is full. After-market parts and service provide stable revenue. Airplanes can be repurposed for military use, and Canada's recently upped defense spending commitments.
Long and complex supply chain, and tariffs are still a wild card. So not out of the woods yet. Stock breaking out to fresh all-time highs speaks to its resilience and to worst-case tariff scenario probably not materializing.
Switched out and into WM, which is bigger and better. Still, has no quarrel with this name. Owns fewer landfills, but advantaged by operating in lightly contested geographies. High-single or low-double-digit earnings and dividend growth rate. If you own, no reason to sell.
