Opinions by Brian Madden | StockChase
202
Brian Madden

Senior VP & Portfolio Manager

ON STOCKCHASE SINCE Aug 2016

Goodreid Investment Council


Opinions by Brian Madden


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2017-10-18

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

Market.  The TSX has come roaring to life post labour day.  Patience and diversification paid off.  Stocks don’t go up in a straight line.  Last year Canada was the star and this year, US stocks were the top of the leader board.  He has mainly balanced portfolios.  The round number fixation on 23k will get fixated on and this is nothing unexpected.  It is probably not a reason to be nervous right now.  Don’t try to pinpoint the top or bottom of a market but maintain a balanced portfolio.  Fixed income has been sobering.  The main benchmark index has been negative two quarters in a row.  It is important for investors to realize that rising interest rates may dampen capital value of bonds, but it means when they renew, there are higher interest rates.  The do have a place in a portfolio.

Brian Madden

Senior VP & Portfolio Manager, Goodreid Investment Council

Price: $0.020
Owned: _N/A

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2017-10-18

DON'T BUY
A Comment -- General Comments From an Expert 

Utilities.  He is not particularly favourable on utilities right now because we are in a rising interest rate environment.  Utilities tend to suffer multiple compression in that kind of environment as they are a bond proxy.

Brian Madden

Senior VP & Portfolio Manager, Goodreid Investment Council

Price: $0.020
Owned: Unknown

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2017-10-18

COMMENT
A Comment -- General Comments From an Expert 

Canadian Dollar vs. US Dollar.  He won’t forecast the near term trend on the exchange rate.  To protect a portfolio against a rising dollar is to run a balanced portfolio of Canadian and US equities as well as fixed income.  If you are only considering Canadian companies than buy those that generate the majority of their revenue in the US.  If you think the US dollar is going higher you want to underweight Gold and gold equities.

Brian Madden

Senior VP & Portfolio Manager, Goodreid Investment Council

Price: $0.020
Owned: Unknown

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2017-10-18

PAST TOP PICK
Alimentation Couche-Tard (B) (ATD.B-T)

(A Top Pick Dec 7/16, Up 4%)  It has been underwhelming over the last 10 months.  It is an illustration of why you want to be patient and diversified.  It is a building block and serves a purpose.  What has held it back is a miss-guided belief that electric cars will kill the internal combustion engine, which he does not accept.  The decline is based on a decline in fuel traffic which in turn means a decline in convenience store sales.  He continues to like this one.

food stores
Brian Madden

Senior VP & Portfolio Manager, Goodreid Investment Council

Price: $59.110
Owned: Yes

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2017-10-18

TOP PICK
Bank of Nova Scotia (BNS-T)

It has been a strong performer this year.  It has outperformed the TSX in 18 of the last 25 years.  They have a strong footprint in rapidly growing economies.  It is a catalyst rich situation.  It is just at its 200 day moving average where it has support.  It is a perennial buy and hold.  (Analysts’ target: $86.50).

banks
Brian Madden

Senior VP & Portfolio Manager, Goodreid Investment Council

Price: $80.650
Owned: Yes

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2017-10-18

DON'T BUY
Crescent Point Energy Corp (CPG-T)

One of the larger E&P companies in the sector.  He has not been that keen on the sector as of late.  The problem is a lack of pipeline capacity to get the product out.  Western Canadian Crude is trading at a decent discount.  Profitability is not where he would like to see it with most of these Canadian companies.  You want to go best of breed.  You want to own downstream assets.  He prefers SU-T because of great upstream assets as well as refineries and service stations. 

oil/gas
Brian Madden

Senior VP & Portfolio Manager, Goodreid Investment Council

Price: $9.350
Owned: Unknown

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2017-10-18

SELL
Concordia International Corp (CXR-T)

It has lost the overwhelming majority of its value.  It is burdened with leverage.  It is important to step back and take a cold, clinical view of it.  The market does not care what you paid for it.  The prospects going forward don’t look very favourable for it.  The subordinate debt went into default this week.  The stock is more of a lottery ticket.

Pharma & Healthcare
Brian Madden

Senior VP & Portfolio Manager, Goodreid Investment Council

Price: $1.210
Owned: Unknown

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2017-10-18

TOP PICK
Enbridge (ENB-T)

The largest pipeline operator in North America.  They just acquired a US pipeline and that makes their network that much bigger and more diversified.  It yields about 4.7% which is much longer than its long run average.  There is a very clearly articulated plan to grow the dividend at 10-12% compound rate of return over the next 4 years.  (Analysts’ target: $60.00).

oil/gas pipelines
Brian Madden

Senior VP & Portfolio Manager, Goodreid Investment Council

Price: $50.420
Owned: Yes

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2017-10-18

BUY
Enbridge Income Fund Holdings (ENF-T)

It is part of a broader umbrella used as a vehicle for asset ‘drop down’ to enjoy a lower tax rate.  It has done fairly well over the long haul but sold off as of late.  He plays pipelines thought the parent, however.  But he has no qualms with this one.

oil/gas
Brian Madden

Senior VP & Portfolio Manager, Goodreid Investment Council

Price: $31.110
Owned: No

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2017-10-18

TOP PICK
CGI Group (A) (GIB.A-T)

There is a new CEO in the last year.  It is likely he will put his stamp on the company in some form.  It is Canada’s largest IT services company.  They could make a transformational acquisition.  They have a history of doing this.  It is a good play on the US economy where they have their largest customer.  (Analysts’ target: $74.00).

consulting
Brian Madden

Senior VP & Portfolio Manager, Goodreid Investment Council

Price: $66.780
Owned: Yes

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2017-10-18

DON'T BUY
Keyera Corp (KEY-T)

He lumps it into the bond proxy bucket and so does not own it.  He would prefer ENB-T because it has an element of growth – a high dividend close to 5% and an explicit plan to grow the dividend 10-12% a year.  You need this to avoid multiple compression.

oil/gas
Brian Madden

Senior VP & Portfolio Manager, Goodreid Investment Council

Price: $37.220
Owned: No

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2017-10-18

PAST TOP PICK
Manulife Financial (MFC-T)

(A Top Pick Dec 7/16, Up 12%)  The macro environment benefited it.  They have a strong wealth management franchise which is growing market share.  They have a very strong and rapidly growing Asian business.  Their new CEO is a strong leader.

insurance
Brian Madden

Senior VP & Portfolio Manager, Goodreid Investment Council

Price: $25.860
Owned: Yes

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2017-10-18

PAST TOP PICK
Magna Int'l. (A) (MG-T)

(A Top Pick Dec 7/16, Up 15%)  Canada’s largest auto parts company.  It traditionally trades at a discount to the market.  It is an extremely profitable and rapidly growing company.  The recent surge is caused by industry specific forces and news releases.  Hurricanes in the US have affected half a million cars which will create increased demand for parts.

Automotive
Brian Madden

Senior VP & Portfolio Manager, Goodreid Investment Council

Price: $68.590
Owned: Yes

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2017-10-18

BUY
Metro Inc (A) (MRU-T)

There are two equal and offsetting forces.  They just made a large acquisition, taking them off their main strategy.  It looks like it will be accretive.  He likes the deal.  The offsetting headwind is the incursion of AMZN-Q into grocery.  He thinks this is overdone.  Whole foods does not have that big a presence in Canada.

food stores
Brian Madden

Senior VP & Portfolio Manager, Goodreid Investment Council

Price: $40.870
Owned: No

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2017-10-18

PARTIAL SELL
Premium Brands Holdings Corp (PBH-T)

A great company, a consolidator in the prepared food space.  It is always expensive.  It keeps expanding.  You could take some partial profits to avoid portfolio concentration.

food processing
Brian Madden

Senior VP & Portfolio Manager, Goodreid Investment Council

Price: $103.760
Owned: Unknown

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