Opinions by Geoff Scott | StockChase
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Geoff Scott

Institutional Portfolio Manager

ON STOCKCHASE SINCE Dec 2017

Cambridge Global Asset Management


Opinions by Geoff Scott


Signal Opinion Expert Chart
COMMENT
General Market Comment 

March 20, 2018

Market. He came into the year with a conservative frame of mind and more cash than usual. Valuations were too high at the start of the year but there have been good opportunities as volatility has gone up. In terms of FAANG stocks, he thinks they are hitting a wall in terms of what regulators will ignore. There is downside risk as new regulations are created, but he cannot yet tell how much. When asked which sectors he prefers, he said that his process is bottom-up, focused on individual stocks rather than sectors. However, the opportunities that have been most attractive this year have mainly been utilities and other stocks that people often think of as boring.

Market. He came into the year with a conservative frame of mind and more cash than usual. Valuations were too high at the start of the year but there have been good opportunities as volatility has gone up. In terms of FAANG stocks, he thinks they are hitting a wall in terms of what regulators will ignore. There is downside risk as new regulations are created, but he cannot yet tell how much. When asked which sectors he prefers, he said that his process is bottom-up, focused on individual stocks rather than sectors. However, the opportunities that have been most attractive this year have mainly been utilities and other stocks that people often think of as boring.

Unknown
Geoff Scott

Institutional Portfolio Manager, Cambridge Global Ass...

PricePrice
$0.020
Owned Owned
_N/A

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COMMENT
General Market Comment 

March 20, 2018

Canadian Banks. He doesn’t own any of the Canadian banks. He sees risk because of the level of consumer and mortgage debt. He doesn’t see attractive rates of return in the near future but if investors must hold Canadian banks, he would recommend a higher-quality bank such as the Royal or TD.

Canadian Banks. He doesn’t own any of the Canadian banks. He sees risk because of the level of consumer and mortgage debt. He doesn’t see attractive rates of return in the near future but if investors must hold Canadian banks, he would recommend a higher-quality bank such as the Royal or TD.

Unknown
Geoff Scott

Institutional Portfolio Manager, Cambridge Global Ass...

PricePrice
$0.020
Owned Owned
_N/A

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COMMENT
General Market Comment 

March 20, 2018

Volatility in the market. The tax package in the United States is raising concerns about inflation and rising interest rates. As the market transitions from a pairing of high growth and low inflation to its next stage, higher volatility is normal.

Volatility in the market. The tax package in the United States is raising concerns about inflation and rising interest rates. As the market transitions from a pairing of high growth and low inflation to its next stage, higher volatility is normal.

Unknown
Geoff Scott

Institutional Portfolio Manager, Cambridge Global Ass...

PricePrice
$0.020
Owned Owned
Unknown

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COMMENT
Air Canada(AC-T) 

March 20, 2018

The company has gone through a remarkable transition, rolling out Rouge and improving the efficiency of their fleet. They have tremendous cash flow and they have to put it to work somewhere. In response to the caller’s question, he comments that they might institute a dividend with all that cash, but he is not sure when. This is a cyclical industry, valuation is high, fixed costs are high and so this is not a company he would invest in.

Transportation

The company has gone through a remarkable transition, rolling out Rouge and improving the efficiency of their fleet. They have tremendous cash flow and they have to put it to work somewhere. In response to the caller’s question, he comments that they might institute a dividend with all that cash, but he is not sure when. This is a cyclical industry, valuation is high, fixed costs are high and so this is not a company he would invest in.

Transportation
Geoff Scott

Institutional Portfolio Manager, Cambridge Global Ass...

PricePrice
$29.000
Owned Owned
No

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BUY on WEAKNESS

Couche-Tard is a strong Canadian business that has executed their strategy of consolidating the convenience store exit globally, with a lot of discipline. This quarter, they had weakness in their gasoline margins and wage pressures in the U.S. There were also one-time issues, such as storms and the cost of a large new acquisition. (The stock dropped 6.75% on the day of this interview.) He has liked this company for a long time and thinks it is worth buying at the right time.

food stores

Couche-Tard is a strong Canadian business that has executed their strategy of consolidating the convenience store exit globally, with a lot of discipline. This quarter, they had weakness in their gasoline margins and wage pressures in the U.S. There were also one-time issues, such as storms and the cost of a large new acquisition. (The stock dropped 6.75% on the day of this interview.) He has liked this company for a long time and thinks it is worth buying at the right time.

food stores
Geoff Scott

Institutional Portfolio Manager, Cambridge Global Ass...

PricePrice
$59.600
Owned Owned
Yes

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DON'T BUY
Bank of America(BAC-N) 

March 20, 2018

He prefers US banks to Canadian banks, given where they are in the cycle. He owned this back in 2016 and it has done very well but the drivers of the growth that were expected in 2016 have now played their role. He doesn’t see a good risk-adjusted return in the near future for this stock.

banks

He prefers US banks to Canadian banks, given where they are in the cycle. He owned this back in 2016 and it has done very well but the drivers of the growth that were expected in 2016 have now played their role. He doesn’t see a good risk-adjusted return in the near future for this stock.

banks
Geoff Scott

Institutional Portfolio Manager, Cambridge Global Ass...

PricePrice
$31.980
Owned Owned
No

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COMMENT

 Buffet has put together a strong collection of consumer and industrial businesses. However, he is having difficulty in putting capital to work. He has 120 billion in cash on hand and is having trouble finding good places to put it. The company has a good succession plan and they have diversified their operations which will ease the transition to new management after Buffet is gone.

insurance

 Buffet has put together a strong collection of consumer and industrial businesses. However, he is having difficulty in putting capital to work. He has 120 billion in cash on hand and is having trouble finding good places to put it. The company has a good succession plan and they have diversified their operations which will ease the transition to new management after Buffet is gone.

insurance
Geoff Scott

Institutional Portfolio Manager, Cambridge Global Ass...

PricePrice
$204.750
Owned Owned
Unknown

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DON'T BUY
Carnival Corp.(CCL-N) 

March 20, 2018

They’re in the middle of a transition, trying to improve their use of capital and the utilization of their ships. The stock has had a great run for the past several years. He likes the metrics they are focusing on but he is not following it closely today because of its high valuation. 

Transportation

They’re in the middle of a transition, trying to improve their use of capital and the utilization of their ships. The stock has had a great run for the past several years. He likes the metrics they are focusing on but he is not following it closely today because of its high valuation. 

Transportation
Geoff Scott

Institutional Portfolio Manager, Cambridge Global Ass...

PricePrice
$67.850
Owned Owned
No

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TOP PICK
CSX Corp(CSX-Q) 

March 20, 2018

They are continuing the plan that Hunter Harrison put in place to improve efficiency, drive down the operating ratio, and sell assets. Velocity is up 20% this year: trains are moving faster, which provides better service and increases capacity. CSX is improving its capital profile, with higher cash flow margins. He expects every dollar of revenue to convert to about 30 cents in the future from a historical level of 8 cents. There have been complaints from the customer (shipper) base as a result of all the cost cutting but if CSX keeps improving its operating metrics, the customers’ concerns will be resolved. (Analysts’ price target is 62.92$)

Transportation

They are continuing the plan that Hunter Harrison put in place to improve efficiency, drive down the operating ratio, and sell assets. Velocity is up 20% this year: trains are moving faster, which provides better service and increases capacity. CSX is improving its capital profile, with higher cash flow margins. He expects every dollar of revenue to convert to about 30 cents in the future from a historical level of 8 cents. There have been complaints from the customer (shipper) base as a result of all the cost cutting but if CSX keeps improving its operating metrics, the customers’ concerns will be resolved. (Analysts’ price target is 62.92$)

Transportation
Geoff Scott

Institutional Portfolio Manager, Cambridge Global Ass...

PricePrice
$56.970
Owned Owned
Yes

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BUY
Emera Inc(EMA-T) 

March 20, 2018

He finds decent value in the utility space now. This is a stable business. Rising rates can continue to weigh on this stock, but much of that has already been priced in. This is a high-quality business that will continue to grind out cash. It has growth opportunities in Florida and elsewhere.

mngmnt/diversified

He finds decent value in the utility space now. This is a stable business. Rising rates can continue to weigh on this stock, but much of that has already been priced in. This is a high-quality business that will continue to grind out cash. It has growth opportunities in Florida and elsewhere.

mngmnt/diversified
Geoff Scott

Institutional Portfolio Manager, Cambridge Global Ass...

PricePrice
$40.760
Owned Owned
Unknown

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COMMENT
Enbridge(ENB-T) 

March 20, 2018

They are working through several issues, especially deleveraging their balance sheet. Enbridge was seen as a rock-solid company but he is not comfortable with it at this time because of its debt.

oil/gas pipelines

They are working through several issues, especially deleveraging their balance sheet. Enbridge was seen as a rock-solid company but he is not comfortable with it at this time because of its debt.

oil/gas pipelines
Geoff Scott

Institutional Portfolio Manager, Cambridge Global Ass...

PricePrice
$39.140
Owned Owned
Unknown

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BUY
Fortis Inc.(FTS-T) 

March 20, 2018

He owns both Fortis and Emera. They are attractive, stable, dividend payers with similar drivers. He slightly prefers Fortis.

electrical utilities

He owns both Fortis and Emera. They are attractive, stable, dividend payers with similar drivers. He slightly prefers Fortis.

electrical utilities
Geoff Scott

Institutional Portfolio Manager, Cambridge Global Ass...

PricePrice
$43.260
Owned Owned
Yes

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DON'T BUY
General Electric(GE-N) 

March 20, 2018

This company has been in the news a lot with stories of weak fundamentals and poor management. The practices are probably culturally ingrained and will take a long time to change.

electrical/electronic

This company has been in the news a lot with stories of weak fundamentals and poor management. The practices are probably culturally ingrained and will take a long time to change.

electrical/electronic
Geoff Scott

Institutional Portfolio Manager, Cambridge Global Ass...

PricePrice
$13.640
Owned Owned
No

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BUY

 He likes the company. It had some difficulties but is recovering slowly. He likes the prospects for the business. (Analysts’ price target is 89$)

biotechnology/pharmaceutical

 He likes the company. It had some difficulties but is recovering slowly. He likes the prospects for the business. (Analysts’ price target is 89$)

biotechnology/pharmaceutical
Geoff Scott

Institutional Portfolio Manager, Cambridge Global Ass...

PricePrice
$76.920
Owned Owned
Yes

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BUY
Intact Financial(IFC-T) 

March 20, 2018

He prefers this to Manulife. They have been a consistent operator over time. They have gone through some softness in their quarters, especially in their auto division, but he expects them to raise rates soon to address this.

insurance

He prefers this to Manulife. They have been a consistent operator over time. They have gone through some softness in their quarters, especially in their auto division, but he expects them to raise rates soon to address this.

insurance
Geoff Scott

Institutional Portfolio Manager, Cambridge Global Ass...

PricePrice
$97.710
Owned Owned
Unknown

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