Michael Sprung
Member since: Oct '00
President at
Sprung Investment Management
Sprung Investment Management
3692 Opinions
Latest Top Picks
(A Top Pick Jan 15/19, Up 6%) Most of the return was from the dividend. He thinks the Canadian banks are better valued than US counterparts. Provisions for loans losses and software development write downs resulted in a $175 million earnings report recently. He would make this one of his most favoured Canadian banks -- trading at 1.4 times book and a near 5% yield. It has the most potential for capital appreciation going forward.
(A Top Pick Jan 15/19, Down 25%) He thinks it is extremely well managed. He believes the dividend will be maintained unless commodity prices fall dramatically. Of all the energy companies in Canada it is likely the most internationally diversified. He thinks the price is already taking into account a dividend cut. He will continue to hold it.
(A Top Pick Jan 15/19, Up 32%) Pipelines are a good place to be right now, especially with constraints on pipelines. They have also been able to increase tariff rates. Still one of his favorites. Yield 4.4%
It hit a 52 week high yesterday. There is potential for a resolution for some of their long term holdings. They are growing in Asia, where there are higher margins. It trades at a sizable valuation discount to its peers in the space. Yield 3.63% (Analysts’ price target is $30.33)
It does not hurt to have a major integrated player. There will be some noise going forward as they have had some unplanned outages. Their production forecasts are a little lower than analysts expected and their capex requirements were a bit higher. A solid company that generates significant free cash flow -- they hope to increase that by $2 billion. The most broadly owned energy stock in Canada. Yield 3.8% (Analysts’ price target is $49.64)
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Opinion
Expert
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COMMENT
COMMENT
January 8, 2020
Market Outlook The market is betting that President Trump will not follow through on the attack into Iraq. However, any attack on US soil could be very detrimental to the market. Oil is down over 4% intraday today, testing $60. Shale decline rates may actually be much higher that originally thought, making the US not as self-sufficient as President Trump believes. Valuations in the markets today are based on investors chasing growth stocks. This may begin to change. Low interest rates has spawned very high levels of debt (consumer, corporate and government). This could make things precarious going forward.
Show full opinionHide full opinion
Market Outlook The market is betting that President Trump will not follow through on the attack into Iraq. However, any attack on US soil could be very detrimental to the market. Oil is down over 4% intraday today, testing $60. Shale decline rates may actually be much higher that originally thought, making the US not as self-sufficient as President Trump believes. Valuations in the markets today are based on investors chasing growth stocks. This may begin to change. Low interest rates has spawned very high levels of debt (consumer, corporate and government). This could make things precarious going forward.
DON'T BUY
DON'T BUY
January 8, 2020
He thinks the company still has a ways to go to prove it can make deliveries. Overall, people have been disappointed with this company for some time. The company must get back to a sustainable level of profitability -- something he does not see happening soon.
Show full opinionHide full opinionHe thinks the company still has a ways to go to prove it can make deliveries. Overall, people have been disappointed with this company for some time. The company must get back to a sustainable level of profitability -- something he does not see happening soon.
transportation equip & components
BUY
BUY
January 8, 2020
One of his principal bank holdings. Loan provision increases have been occurring and he thinks management is just being cautious. It is well capitalized and trades at a discount to its peers. He would recommend buying here.
Show full opinionHide full opinionOne of his principal bank holdings. Loan provision increases have been occurring and he thinks management is just being cautious. It is well capitalized and trades at a discount to its peers. He would recommend buying here.
banks
HOLD
HOLD
January 8, 2020
Of all the Canadian banks this was the laggard, based on price return. It is priced a little on the rich side. The yield is about 4%, making it attractive. He does not hold a large position, but would suggest others at these valuation levels (both trading on book value and yield).
Show full opinionHide full opinionOf all the Canadian banks this was the laggard, based on price return. It is priced a little on the rich side. The yield is about 4%, making it attractive. He does not hold a large position, but would suggest others at these valuation levels (both trading on book value and yield).
banks
HOLD
HOLD
January 8, 2020
Legal hurdles? A play on copper and he has been a long term holder. The proxy fights from last year are over. There is some issue about permitting on the upcoming US project. He thinks it will be approved longer term, but it may take longer. With all the turmoil in the world and given we are near an end of a bull cycle, this is a good time to get into base metals. What he needs to see is more investment in industrial production. You will have to be patient. He will continue to hold it.
Show full opinionHide full opinionLegal hurdles? A play on copper and he has been a long term holder. The proxy fights from last year are over. There is some issue about permitting on the upcoming US project. He thinks it will be approved longer term, but it may take longer. With all the turmoil in the world and given we are near an end of a bull cycle, this is a good time to get into base metals. What he needs to see is more investment in industrial production. You will have to be patient. He will continue to hold it.
precious metals
BUY
BUY
January 8, 2020
It has been a recent Top Pick for him. There is new management in charge. The new CEO publicly commented that Canadian cell phone rates are not that expensive. The company has the cash flow and infrastructure and he likes their TV services. This is a good place to be.
Show full opinionHide full opinionIt has been a recent Top Pick for him. There is new management in charge. The new CEO publicly commented that Canadian cell phone rates are not that expensive. The company has the cash flow and infrastructure and he likes their TV services. This is a good place to be.
telephone utilities
BUY WEAKNESS
BUY WEAKNESS
January 8, 2020
He thinks it is selling at a reasonable valuation. It will have to continue to meet and beat investor expectations. He doesn't see the catalyst at the moment to do that. He is not invested right now and might consider looking at it 15% lower than today.
Show full opinionHide full opinionHe thinks it is selling at a reasonable valuation. It will have to continue to meet and beat investor expectations. He doesn't see the catalyst at the moment to do that. He is not invested right now and might consider looking at it 15% lower than today.
Mining
HOLD
HOLD
January 8, 2020
We are living in a strange world where Tesla has a higher market cap than GM. There has been a stall in new car sales globally, especially in China where sales declined. He thinks all the parts manufacturers will suffer to a degree. Magna will be a survivor and will make the transition into electric cars going forward. He would not hesitate to own it for the long term. He does not own it presently.
We are living in a strange world where Tesla has a higher market cap than GM. There has been a stall in new car sales globally, especially in China where sales declined. He thinks all the parts manufacturers will suffer to a degree. Magna will be a survivor and will make the transition into electric cars going forward. He would not hesitate to own it for the long term. He does not own it presently.
Automotive
COMMENT
COMMENT
January 8, 2020
CDN vs US financials? He thinks in terms of valuations it is in favour of Canadian financials based on price to cash (9.9 times for Canadian vs. 12 times for US) and yields (4.3% for Canadian and 2.7% for US).
Show full opinionHide full opinionCDN vs US financials? He thinks in terms of valuations it is in favour of Canadian financials based on price to cash (9.9 times for Canadian vs. 12 times for US) and yields (4.3% for Canadian and 2.7% for US).
PAST TOP PICK
PAST TOP PICK
January 8, 2020
(A Top Pick Jan 15/19, Up 6%) Most of the return was from the dividend. He thinks the Canadian banks are better valued than US counterparts. Provisions for loans losses and software development write downs resulted in a $175 million earnings report recently. He would make this one of his most favoured Canadian banks -- trading at 1.4 times book and a near 5% yield. It has the most potential for capital appreciation going forward.
Show full opinionHide full opinion(A Top Pick Jan 15/19, Up 6%) Most of the return was from the dividend. He thinks the Canadian banks are better valued than US counterparts. Provisions for loans losses and software development write downs resulted in a $175 million earnings report recently. He would make this one of his most favoured Canadian banks -- trading at 1.4 times book and a near 5% yield. It has the most potential for capital appreciation going forward.
banks
PAST TOP PICK
PAST TOP PICK
January 8, 2020
(A Top Pick Jan 15/19, Down 25%) He thinks it is extremely well managed. He believes the dividend will be maintained unless commodity prices fall dramatically. Of all the energy companies in Canada it is likely the most internationally diversified. He thinks the price is already taking into account a dividend cut. He will continue to hold it.
Show full opinionHide full opinion(A Top Pick Jan 15/19, Down 25%) He thinks it is extremely well managed. He believes the dividend will be maintained unless commodity prices fall dramatically. Of all the energy companies in Canada it is likely the most internationally diversified. He thinks the price is already taking into account a dividend cut. He will continue to hold it.
oil/gas
PAST TOP PICK
PAST TOP PICK
January 8, 2020
(A Top Pick Jan 15/19, Up 32%) Pipelines are a good place to be right now, especially with constraints on pipelines. They have also been able to increase tariff rates. Still one of his favorites. Yield 4.4%
Show full opinionHide full opinion(A Top Pick Jan 15/19, Up 32%) Pipelines are a good place to be right now, especially with constraints on pipelines. They have also been able to increase tariff rates. Still one of his favorites. Yield 4.4%
oil/gas pipelines
DON'T BUY
DON'T BUY
January 8, 2020
Buy before earnings? He is not certain if he would buy it today -- so he would wait. Railroads are driven by economies, especially the industrial and agricultural sectors, and things are not growing. He does not think it is a compelling valuation -- trading over 4.5 times book and with a 20 PE. He would rather find other industrial picks, rather than the railroads.
Show full opinionHide full opinionBuy before earnings? He is not certain if he would buy it today -- so he would wait. Railroads are driven by economies, especially the industrial and agricultural sectors, and things are not growing. He does not think it is a compelling valuation -- trading over 4.5 times book and with a 20 PE. He would rather find other industrial picks, rather than the railroads.
Transportation
PARTIAL BUY
PARTIAL BUY
January 8, 2020
Overall, he has great admiration for all the Brookfield spin offs. He prefers holding the parent. For longer term investors, this would be a good time to add to a position. He does not own it, but will be watching it.
Show full opinionHide full opinionOverall, he has great admiration for all the Brookfield spin offs. He prefers holding the parent. For longer term investors, this would be a good time to add to a position. He does not own it, but will be watching it.
INDUSTRIAL PRODUCTS
WATCH
WATCH
January 8, 2020
Why the selloff today? Teck may be expanding its deal with a competitor causing a sizable share price sell off (over 10% today) -- this may double Teck's capacity. People may also be concerned about future coal demand and exports. There just not seem to be any catalysts to spark his interest. It is not wise to panic on this, there will be time for recovery to allow you to assess the situation.
Why the selloff today? Teck may be expanding its deal with a competitor causing a sizable share price sell off (over 10% today) -- this may double Teck's capacity. People may also be concerned about future coal demand and exports. There just not seem to be any catalysts to spark his interest. It is not wise to panic on this, there will be time for recovery to allow you to assess the situation.
INDUSTRIAL PRODUCTS
Comments
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