Robert McWhirter
President at Selective Asset Management
Member since: Nov '00 · 2577 Opinions
Rating Card
Premium content| All | 
Rating
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Win
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Neutral
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Big Loss
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| 4.27 | 165 28.45% | 149 25.69% | 62 10.69% | 121 20.86% | 83 14.31% | ||
| 1 Month | 4.17 | 6 4.96% | 49 40.50% | 27 22.31% | 38 31.40% | 1 0.83% | |
| 6 Months | 4.36 | 28 23.14% | 46 38.02% | 14 11.57% | 17 14.05% | 16 13.22% | |
| 12 Months | 4.38 | 41 34.45% | 26 21.85% | 7 5.88% | 25 21.01% | 20 16.81% | |
| 2 Years | 4.12 | 47 39.17% | 13 10.83% | 7 5.83% | 25 20.83% | 28 23.33% | |
| 5 Years | 4.3 | 43 43.43% | 15 15.15% | 7 7.07% | 16 16.16% | 18 18.18% |
Stock Opinions by Robert McWhirter
There are more foreign investors hedging on the U.S. currency so there will be further pressure on the U.S. dollar which he feels is facing a secular decline. There is more upside to gold since central banks are continuing to buy it as an alternative to the U.S. dollar.There is an estimated $36 trillion in debt which is increasing, and deficit spending is $1.4 trillion per year.
There is an uptrend in commodities, especially copper due to the renewable energy space and EV's. This makes copper a more stable commodity and there are thoughts it could double to $10 in the next two years. Copper is a by-product of gold production. We should see many more mines started or re-started since there have no new mines for some time.
His company uses a base system which uses quantitative, technical and fundamental factors to rank stocks. In general the free cash flow average is 3.7%. The following benchmark may be useful: A Return on Capital of 1.1% is 1/3 of Canadian government bonds. CHP's dividend is 5.1% with a 73% payout ratio. Other stocks rank better on a total return basis.
It doesn't pay a dividend, Assembles materials for data centres and correlates to Nvidia. It has been switching to a more stable recurring revenue sysytem. He wonders about other developments coming and looks for dividend paying stocks with less volatility. He talked about Verses Tech on the Neo exchange (VERS) with a different method of machine learning and AI which uses less computer power and less electricity.
There was a discussion on stock buybacks vs dividends. He feels it is better to use cash flow to pay dividends which puts cash in the hands of the investors. He prefers companies to use their cash to go more directly to the bottom line rather than use a buyback program. Buybacks can make sense if the shares are undervalued.
Since the guest has not been on the show for four years there are no past picks. There was a general discussion on the reasons for pension funds not putting much of their money in Canadian stocks. He feels there are low returns on capital for quite few public companies and they can get better risk adjusted returns from outside of Canada. It is hard to find the best stocks. 3.7% is a typical free cash flow yield of U.S stocks. Historically 2.4% of stocks in the U.S. create most of the value.
It ranks 226. You could hold it but there are better opportunities in gold if it is heading to $4000, and better risk adjusted returns in other stocks.
In general the silver vs gold ratio has been bad but is turning the corner. There are no silver stocks in their top 25 'OK to buy list'
He quoted from a technical analyst: "Nothing good happens below the 200 day moving average". Its dividend is 5.7% and the payout ratio is 45%. Earnings are expected to be down this year and the next. In general telcos are in a very competitive business and have very high debt to equity. They have some unused or little used assets. There are better risk adjusted returns elsewhere.
