Stock Opinions by Expert Panel

COMMENT
Finding stocks to love.

Laura Lau
Long-term holds, preferably an monopoly or duopoly, pricing power, innovation, sleep at night. Not a lot of stocks can do this.

Brianne Gardner
Good profitability in terms of where we are in the business cycle. If she can hold it forever, she will. If she wants to trim it along the way, she will. Fundamentals, cashflow, strong management. Sleep-at-night stocks are the ones you want to hold.

David Burrows
He looks for companies that are good to begin with, but getting better. He loves companies that the world sees in one light, but things are changing, and they could get revalued to a higher level. He tries not to fall in love, he will sell. High-quality companies in areas of the market that are going through some kind of structural change that will benefit them for an extended period of time.

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COMMENT
Long-term investments let you sleep at night.

Laura Lau
Yes, but you have to be pragmatic. You can't always fall in love, because sometimes things change. A company may not be able to keep up, or the innovation isn't there. Or, for risk-management purposes, you do have to trim.

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COMMENT
Stocks to "date".

Laura - MU
Most stocks in Canada actually fit in the "dating" pool, as we are a cyclical economy. Even the banks are cyclical. Time to own deep cyclicals is when they're at their worst. In the US, the most cyclical part of the economy is semiconductors. Within that space, the most cyclical are memory chips, prices went down 50%. Now is the time to buy. Tailwind of more AI content in phones, PCs, and data centres. Yield is 0.56%.

Brianne - GRT.UN
Dipping her toe in, tactical trade opportunity, not too committed for the longer term. Focuses on industrial and logistics space. Stable 4.55% dividend. Real estate sector is negative YTD, hasn't done well over the past 2 years. Sees stability in the industrial space. Interest rates coming down reduces debt payments, leaving them with more cashflow and profitability, allowing it to expand and grow its portfolio. An 8/10 for her. Potential upside from analysts is about 18%.

She owns it and wants to continue, but 2024 could be the year you serial date. Lots of opportunities out there beyond the Magnificent 7.

David - SU
For dating, there are lots of companies and industries that are a little more cyclical. There's a time to own them, and a time not to. Energy sector's retrenched over the last little while, coming up to when it's better seasonally. Long-life assets are interesting, and SU has them. Great dividend of 5.04%. Good job paying down debt.

Could start as a date, as you have to take a little risk, but then might turn into a long-term relationship. 

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COMMENT
Stocks to "marry".

Laura Lau - MSFT
A monopoly in software. And then you layer on the AI. Subscription business is just going to get bigger and bigger. Has the trust of businesses. Yield is 0.74%. 

Brianne Gardner - MSFT
Quality partner. Great, stable business. Dependable, can trust management. Long-term play, even after 60% return over past 12 months. Participating in the AI boom, and AI isn't going away. ATVI acquisition will start paying off this year. Street has $450 price target. Continuously outperforms top and bottom lines on earnings, 20% earnings growth expectations, 15% revenue growth expectations. She's committed for the long run.

David Burrows - JPM
A company that you can trust. Over time has been through a lot of ups and downs, wants to continue to grow, continues to invest in itself. The absolute leader in the banking industry. Opportunity is the consolidation in regional banks. Invest a lot in technology. Great for earnings and dividend growth. Yield is 2.39%. Financials tend to do well in a world of rising interest rates over time.

Look for companies that do well in good time, but that has also proven itself during the most difficult times. That's the kind of stock you want to marry.

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COMMENT
How do you sit with winners through uneasy times?

David Burrows
They have to continue to do what they say they're going to do. Ideally, outperform. He doesn't want companies that are promising the moon, but wants companies that are delivering. When you go through difficult periods, scrutinize the holdings you have to see who's following through. 

The companies that today's guests have chosen to marry, MSFT and JPM, have been very predictable in the way they deliver.

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COMMENT
The ones that got away!

Laura Lau - RACE
The stock raced away from her :)  Great company and brand name. She was concerned about the very high valuation. Don't make a lot of units per year, so if there are issues and you don't meet expectations, the market's not very forgiving. Going forward they're expanding production, which will help support the valuation.

Brianne Gardner - GE
Heavily invested in the industrial space, wind turbines, airline engines. Before January 2023, the stock wasn't working, so it wasn't on her radar. Up 96% last year, and another 12% YTD. Yield is 0.22%. Didn't check all her boxes. Ranks 4/10 on value, 5/10 for fundamentals. Sometimes for the one that got away, everything happens for a reason.

If you do hold it, not a bad time to take some profits off the table. Spinning off healthcare and energy.

David Burrows - RACE
Lots of fish in the sea, and he's wanted this for a long time. He just didn't think they could afford it. Has shown it's recession-proof, as there's so much demand. At the very highest level of luxury goods, even recession doesn't seem to slow it down. Beautiful cars, and more people want them than can have them.

Expensive for a reason, and sometimes great companies are that way. Sometimes you just don't get another opportunity. Could probably be bought here, but it's expensive. 

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COMMENT
A Comment -- General Comments From an Expert
Swipe left.

Laura Lau - HSY
Great company, but facing an issue: biggest input, cocoa, has doubled in price. Either they increase the price and people buy less, or margins get squeezed. People will still buy for Valentine's, Easter, and snacking, but they'll buy less. They'll buy something that's cheaper.

Also facing headwinds from the GLP-1 obesity drugs.

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COMMENT
Markets 2022: The Road Ahead. Topics include Federal Reserve rate hikes, Covid 19 economic fallout, Russia-Ukraine war, sanctions on Russia, inflation, market volatility. The guests today are: Earl Davis - Head of Fixed Income & Money Markets, BMO Global Asset Management Patricia Perez-Coutts - Portfolio Manager, PenderFund Capital Management John Zechner - Chairman & Founder, J. Zechner & Associates
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COMMENT
It's been a wild ride already this year. Patricia: This is not the first time it's happened. We have to be patient investors at all times.
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COMMENT
What does your world look like? Earl: He feels like the fixed income guy crashing the equity party. We'll see peak yields for the year shortly, by the end of July. Things will then calm down until January, when there will be a re-evaluation, depending on where inflation is. Base case is higher rates, not just for 2022, but also for 2023. The storyline will continue for the BOC. 75 is the new 50. He sees at least 2, and then they go back down to 50s. It depends when peak inflation hits, which he sees as September. But if it's not, then all options are open.
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COMMENT
Stocks vs. bonds. John: For most of the year, it's been an odd situation where both stocks and bonds have been decimated. He concurs that peak interest and inflation will be relatively sooner. In the past month or so, you've started getting divergence. On extremely down stock market days, the bond market rallies.
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COMMENT
Recession jitters and emerging markets. Patricia: The picture is not the same everywhere in the world. Europe is perhaps on the weaker side than in NA, given its proximity to the Russia-Ukraine conflict. The basis point increase was just 25, a very shy statement compared to the Fed and BOC. In some countries, including Asia, inflation is much more contained.
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COMMENT
Opportunity amongst the pessimism? John: He doesn't want to be Pollyannish, but he agrees that there is. We've heard before that stocks are one of the few markets that when things are on sale, people run away. Look at valuations that have come down and pick your spots. Ultimately, things will be fine. We'll have a short, shallow recession. Pay attention to earnings in the next month. He's been using cash to add to positions.
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COMMENT
What to watch for in bonds. Earl: Coupons are much higher now since bonds have sold off, and that's the long-term gain that you'll get. He hasn't gone long credit, but a number of names are on his watch list, and he anticipates buying over the summer.
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COMMENT
Political leadership and spending to battle climate change. Earl: A lot of political dynamics globally, not just in the US. Inflation handcuffs politicians. That's why he thinks interest rates are going much higher, because they have to crush inflation. #1 reason why politicians don't get re-elected is inflation. They don't want a recession that's caused by higher rates and demand disruption. So they'd rather have a recession caused by higher rates, so they could lower rates, and then they could spend.
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