Brian Madden
Chief Investment Officer at First Avenue Investment Counsel
Member since: Aug '16 · 1857 Opinions
Rating Card
Premium content| All | 
Rating
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| 4.67 | 213 22.14% | 235 24.43% | 159 16.53% | 203 21.10% | 152 15.80% | ||
| 1 Month | 4.78 | 8 3.27% | 81 33.06% | 87 35.51% | 65 26.53% | 4 1.63% | |
| 6 Months | 4.93 | 42 18.03% | 71 30.47% | 33 14.16% | 56 24.03% | 31 13.30% | |
| 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 | 4.29 | 44 47.83% | 14 15.22% | 4 4.35% | 14 15.22% | 16 17.39% |
Stock Opinions by Brian Madden
A lot of the macro uncertainty has been melting away, in fits and starts over the last couple of months, and more quickly over the last 2 weeks. Various countries are coming to the table and coming to terms with the US on trade and tariff matters -- whether substantively or performatively, let viewers be the judge. The market's taking it as a good sign, or at least (probably a correct assumption) that the worst-case scenarios priced in during April are off the table.
As a result, stock markets in Canada and US are hitting all-time highs.
Broadly, he's below weight on the Mag 7. Just for context, their market weight is massive. His firm runs a NA mandate, but if you were to run just a US mandate this would mean that about 33% of your portfolio would be in just 7 stocks. That's an imprudent amount of concentration.
So they've picked their spots and own a couple. The ones they don't like, they don't own.
Increasingly, there are signs of that. A couple of things point to complacency and greed.
One is the resurgence in the meme stock trade, as it did in 2021. The other one is leverage. NYSE members extend margin credit to clients of member firms. Data suggests that margin debt outstanding has surpasses $1T, and that's quite a lot. Shows that people are getting increasingly comfortable with the durability of the economic cycle and the stock market rally.
He is too, but there's a lot of ground between comfort with durability of an economic expansion and piling headlong into things like meme stocks, zero-date expiry options, and triple-levered ETFs.
Recent acquisition got them into compressed natural gas and renewable nat gas. Belief is that propane has matured, but alternative energy is emerging as a growth area. Erratic earnings. Plunged substantially.
Total compounded shareholder return for a decade is just over 1%; over 20 years, it's 0.5%. You're trading income for capital. Yield is ~2.5%.
If you own it, not the end of the world. Trades at pretty steep discount (16x PE) to peers (closer to 22x), as it's less profitable and less growthy. Interesting segment called "Concessions", where they take partnership stakes in infrastructure investments. Yields ~4%, and grows dividend about 6% a year.
Better choice is WSP.
Recently lightened up on re-rating, but still likes it. Now trades at almost parity or slight discount to peers. US missteps are behind them. Incurring lots of expenses to step up anti-money-laundering compliance. How long will they be in the US penalty box? WFC was there for 7 years, and he hopes it won't be that long for TD.
Feels should be able to reach growth guidance of 7%. Will have to pull other levers such as tightening belt in Canada, growing capital markets, or competing more fiercely ("elbows up";).
Great performer. Moved up from small cap to something bigger and more diversified. Still likes it, though there was some disappointment after release of Q1 results. Good portfolio of mines, pretty good organic growth profile. Recent acquisition will be synergistic. Mines are in jurisdictions where not at risk of having rug ripped out from under.
Consolidating due to recent gains, and gold hasn't broken out to new highs (though on the doorstep). Good time to add. Feeling pretty good about upcoming Q2 numbers, as a lot of cost pressures were just issues of timing and should reverse. In the long run, aspiring to be an emerging AEM, either organically or via merger.
Sensational performer since it was spun out. Has had a meaningful re-rating, partially resulting from controversial decision to be domiciled in the US; this allows them to be included in large US indices, benefitting from passive ETF buying. Will do well, but likely won't outpace the parent BN to the same extent as the last number of years.
Nuclear renaissance, and then Russian invasion of Ukraine really tightened up supply and turbo-charged the idea. Cigar Lake producing steadily. Mothballed mine reopened. Low-cost, long-life reserves. Joint venture with Kazakhstan facing issues, but that's a small piece of the puzzle.
Deals with data centres continue. Uranium price is firm, but not high enough to stimulate new supply. Westinghouse JV has signed numerous deals, moving CCO price higher recently. Finding its way into green energy portfolios. Still likes.
