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Stock Opinions by Jamie Murray

BUY
A big recovery in travel is already happening. AC enjoys a duopoly with Westjet and will manage well against the discount airlines. When cross-border travel returns in the next few years, AC will do very well. Airlines were loved by investors before Covid and he expects that to return.
Transportation
WATCH
A leader in creative digital marketing. Subscription-based products lead to predictable cash flows and 15% revenue growth. High gross margins around 80% in software, too. It trades at 32x earnings, far better than the former 50x a year ago. He owns Google and Meta instead, but Adobe's PE is getting attractive.
computer software / processing
BUY
They've succeeded the last decade by fining less-competitive markets in memory and storage for semis, so it's less volatile than tech. Meanwhile, they're adding a software strategy by buying slow-growth infrastructure companies, which overlaps their existing customer base in networking and infrastructure, so this reduces their sales costs. They just bought VMware which will be accretive. Great stock, though he has taken some profits recently. Tech is still attractive.
0
BUY
Oil is the best performing sector now as demand remains strong. Will probably do well with this stock or Exxon as long as oil stays strong. DVN had to sell off its Russian division. It boils down to whether you're in this space or now. DVN trades at an attractive 23% free cash flow yield.
oil / gas
BUY
Autos are very cyclical and impacted by inflation, so stocks have been weak lately given inflation, the chip shortage and Russia. He expects supplies to improve later this year and there's a pent-up demand for green cars. He expects healthy car sales coming.
Automotive
BUY
Demand for their e-cars is strong even before they hit the street. He is optimistic about the car business given pent-up demand. Chop shortages will ease or end later this year.
Automotive
BUY
They're spinning off their consumer products division, so GSK has historically traded at a discount with slower growth than other drugmakers. New management has turned around the pharmaceuticals side and make good consumer products. Aging populations in the west is a tailwind.
biotechnology / pharmaceutical
PAST TOP PICK
(A Top Pick Jul 12/21, Up 61%) He just sold all shares to buy SBUX. Last summer, DLTR was strongly hit by supply chain problems, but they raised prices from $1 and integrated products from Family Dollar that they bought. An activist accelerated these moves.
merchandising / lodging
PAST TOP PICK
(A Top Pick Jul 12/21, Down 34%) Their problems are short term and he's holding on. AWS continues to deliver high margins and revenues growth. A slowdown in cloud spending is possible, but he expects robust demand. A concern is their retail side, probably hitting the worst last quarter due to a physical goods overhang after two years of being understaffed (so are now letting go staff as Covid ends). They should return to positive EBIT in the next two years.
specialty stores
PAST TOP PICK
(A Top Pick Jul 12/21, Down 36%) They do IT outsourcing for small/medium business. CTS buys new companies and increase cross-selling by introducing new services, especially high-margin managed services rather than selling hardware. EBITDA margins should increase from 5% to 10% in the next few years. Still early days in its strategy.
Technology
BUY
A great performer compared to its peers. They are a dominant ETF service provider in Canada. Well-managed. The banks here move as a pack, and the leader and laggard often rotate. He owns TD and BNS which offers opportunities in the US and Latin America respectively.
banks
DON'T BUY
They have too many brands, and overextended themselves. Not managed well, though managers are addressing issues. Little earnings growth short-term. Commodity input costs are another worry.
food processing
BUY
Spun out of Tourmaline, a top nat gas company. They're consolidating a big land mass in western Canada with some of the best nat gas fields in the world. Topaz is the vehicle that allows TOU to offload production into a cash-flow vehicle to free capital and drill more wells. The energy patch is undervalued. Nat gas has very strong pricing now. This looks good for the next 6-12 months.
0
BUY
The Russian war has driven up agricultural and fertilizer prices, but it's uncertain how this plays out. The spike in fertilizer prices has caused farmer to reduce their spend. The situation is in flux, but long term there will be demand more North American commodities instead of Russian. Trades at 11x only. Enjoy the cash flow. This should move higher.
agriculture
PARTIAL BUY
They make snowmobiles and enjoyed a surge during Covid, but a correction since as people are travelling. DOO is cyclical and shares are near the bottom of the cycle now. A best in class company. You can start nibbling at this.
Consumer Products
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