Michael Sprung

The Liberals won another minority government. It's going to take a lot of work to climb out of the financial hole that Ottawa dug to cope with Covid, starting with balancing the national budget. The Liberals will raise taxes on the wealthy, but this will discourage investment--we don't need this. The election was unecessary and costly. A pity. Let's hope we can get things going again and pray we don't see a fourth wave. Let's hope businesses continue to open up as consumer spend and travel again. We will get through this, but it will take time. In the past 18 months, he's been selling and holds a lot of cash now. He's waiting for a bigger sell-off than yesterday. He's looking for high dividend payers that don't stretch valuations. Be defensive in staples, financials and utilities.

Many Brookfield companies look expensive, but are resilient, including BIP. They pay 3.5% in dividends, safe. The integration of Interpipeline will be positive. He'd be happy to buy this. Very well managed.

The price is now good. Its cash flow is below 5x or 4x. It pays a modest dividend. They're technologically advance and own great properties. They lowered their interest in White Rose and Terra Nova, which frees up more capital to deploy in traditional fields. Good managers. He owns a little and should do well in coming years.

See also comments on BIP.UN. BAM continues to deliver fundraising and capital deployment. It's been growing tremendously in recent years. They're building massive-scale projects. Super well-managed. It looks expensive, but this continue to reward shareholders. What could go wrong? They could be caught offside if funding suddenly restricts. It's trading now at a reasonable valuation, but a wider slowdown could impair them and then investors would re-evaluate that PE.

Getting that license in Arizona would be a huge boom for them. They hold great mines and their operations are performing well. They've stumbled a bit in recent years, but overall things are smooth. Peru offers political uncertainty with a new far left-wing government, but it needs Hudbay's operations to keep going. He targets $12-13.

With a longer timeline, you'll do well with this. It looks like they'll get away with the KSU merger to create a giant. Multiples are reasonable. The rails reflect the wider economy in coming years, and he expects both to do well. He expects earnings to grow to $5 within 2-3 years. Inevitably, some divestment but also synergy will happen in the merger to come. There may be some headaches in the first few years, but this deal will pay off.

He owns this and ENB. You need to own stocks with secure dividends and contracted revenues, namely capital projects that'll raise cash flow over time. You get a bit more of a yield premium with ENB vs. TRP, but he likes both. Solid assets.

It corrected more than other financials in yesterday's rout. Their growth has been in China, so maybe they're getting hit by the Evergrande implosion. MFC has always reacted with more volatility than other financial stocks, like cutting their dividend in 2008. At $23.75, it's a good buy. In coming years, he expects them to continue to do well. Prudential sold off some of its businesses, so this adds a little to MFC's underlying value, more than people give it credit for. Very good managers. He'd definitely recommend it.

Magna vs. Martinrea Supply chain constraints have hit hard the carmakers and car-parts makers. We likely will see lower-than-expected volumes for another year. US-China squabbles will also have an ongoing effect. Longer-term, MG is a partial buying opportunity. He hasn't looked closely at the car parts makers though to choose one over the other. He owns Linamar. Expect volatility in this space.

Magna vs. Martinrea Supply chain constraints have hit hard the carmakers and car-parts makers. We likely will see lower-than-expected volumes for another year. US-China squabbles will also have an ongoing effect. Longer-term, MG is a partial buying opportunity. He hasn't looked closely at the car parts makers though to choose one over the other. He owns Linamar. Expect volatility in this space.

(A Top Pick Dec 04/20, Up 18%) It lags its peers, but is selling at a discount based on a lower price-to book at 1.4x, yet paying a 4.5% dividend. Good to buy at current prices. The banks will do well when they can raise dividends and buyback shares again.

(A Top Pick Dec 04/20, Up 8%) Their downstream operations did well in the last quarter. They are the giant in Canadian oil. In the next few years, the energy stocks will offer good value after being under pressure in recent years. We could head to an oil shortage and see rising oil prices. He still likes SU.

(A Top Pick Dec 04/20, Up 23%) Improving balance sheet and expects them to keep raising dividends, paying well over 6.5% now. It's a great buy for income investors. ENB offers capital appreciation going forward. Line 4 is progressing well.

It's had a good run. Was his top pick in March 2020. IN recent quarters, they've been simplying their structure. What's held their valuation was Weston Foods, which they are divesting. So, the company will focus on Loblaw and Choice Properties. Higher costs have impacted the former during the pandemic. But investments in home delivery have done well. He likes consumer staples now.

It's lagged a little. It had a severe premium valuation. Like the other banks, they did well with reserve releases. ROE is decent. TD has spent a lot to expand in the U.S., so there's a lag in profitability--they are doing well in the U.S. It's reasonably priced now, in the middle of the bank pack. It pays around 3.8%. He prefers BNS, RY and Commerce. He can't all the banks all the time. Not his first choice, but if he already owned TD, he'd hang onto it.