Opinions by David Baskin | StockChase
4339
David Baskin

President

ON STOCKCHASE SINCE Feb 2001

Baskin Wealth Management

http://www.baskinfinancial.com/main/


Opinions by David Baskin


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COMMENT
General Market Comment 

June 12, 2018

Overview Corporate earnings were terrific in the first quarter. The stocks that he buys are driven by corporate earnings. He looks for value stocks that have lower growth but are steady. There's a big appetite for risk in the market and so the high-growth stocks are doing well.

Overview Corporate earnings were terrific in the first quarter. The stocks that he buys are driven by corporate earnings. He looks for value stocks that have lower growth but are steady. There's a big appetite for risk in the market and so the high-growth stocks are doing well.

Unknown
David Baskin

President, Baskin Wealth Manage...

Price Price
$0.020
Owned Owned
_N/A

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COMMENT
General Market Comment 

June 12, 2018

Comment on long term bonds as a stabilizing investment for seniors. He thinks these are a wise investment to reduce risk in a portfolio. Currently, a good quality corporate bond (BBB or BBB+) in Canada that will mature in 5 to 7 years earns about 3.4%. The real return, after inflation, is about 1.5% before inflation. No one will get rich from these. However, in the event of an adverse stock market, investors will be happy to have these. He recommends against buying bonds that mature more than 6 years from now because they do not compensate investors for the extra duration risk, especially in a rising interest rate environment.

Comment on long term bonds as a stabilizing investment for seniors. He thinks these are a wise investment to reduce risk in a portfolio. Currently, a good quality corporate bond (BBB or BBB+) in Canada that will mature in 5 to 7 years earns about 3.4%. The real return, after inflation, is about 1.5% before inflation. No one will get rich from these. However, in the event of an adverse stock market, investors will be happy to have these. He recommends against buying bonds that mature more than 6 years from now because they do not compensate investors for the extra duration risk, especially in a rising interest rate environment.

Unknown
David Baskin

President, Baskin Wealth Manage...

Price Price
$0.020
Owned Owned
_N/A

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WATCH
Amazon.com(AMZN-Q) 

June 12, 2018

This is the iconic company of the 21st century. You can't have a discussion about retail without talking about Amazon. However, the debate inside his company is whether this great company is a great stock. It is hard to measure its profitability now and in its future, and therefore hard to determine whether its price is high or low. They don't make a profit, they may never pay dividends or buy back shares. Normally, shareholders buy a stock to gain a piece of the company's profits, which come back to the shareholder in some way. Amazon operates outside of this model. The jury is out, for him, as to whether this is a good stock or not.

specialty stores

This is the iconic company of the 21st century. You can't have a discussion about retail without talking about Amazon. However, the debate inside his company is whether this great company is a great stock. It is hard to measure its profitability now and in its future, and therefore hard to determine whether its price is high or low. They don't make a profit, they may never pay dividends or buy back shares. Normally, shareholders buy a stock to gain a piece of the company's profits, which come back to the shareholder in some way. Amazon operates outside of this model. The jury is out, for him, as to whether this is a good stock or not.

specialty stores
David Baskin

President, Baskin Wealth Manage...

Price Price
$1698.750
Owned Owned
No

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PAST TOP PICK

(A Top Pick May 17, 2017. Up 8%). They buy many label companies, consolidating the label business. They are smart acquirers and have a history of improving profitability of the companies they buy. Their stock split made shares easier to buy. He is still buying it.

packaging/containers

(A Top Pick May 17, 2017. Up 8%). They buy many label companies, consolidating the label business. They are smart acquirers and have a history of improving profitability of the companies they buy. Their stock split made shares easier to buy. He is still buying it.

packaging/containers
David Baskin

President, Baskin Wealth Manage...

Price Price
$65.280
Owned Owned
Yes

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PAST TOP PICK
Cineplex Inc(CGX-T) 

June 12, 2018

(A Top Pick May 17, 2017. Down 39%). This has been a disaster for him. The market has decided that people will never go to movies again, which is wrong. The number of people going to movies has gone down a little bit but box office revenue has been steady. Cineplex has additional revenue streams. They have rec rooms, like David & Busters in the United States, which is up significantly. In addition, Air Canada flights show movies from Cineplex, people watch Cineplex news feeds. Cineplex also gets more value add from its theatres by selling VIP seats where you can order a glass of wine and a sandwich. Cineplex is also hosting video game tournaments in its theatres, packing people in to play or watch. This can take the average ticket from $15 to $50. He thinks the investment public has gotten Cineplex wrong and thinks the stock will rise back to $40 or $45. He is still buying it.

other services

(A Top Pick May 17, 2017. Down 39%). This has been a disaster for him. The market has decided that people will never go to movies again, which is wrong. The number of people going to movies has gone down a little bit but box office revenue has been steady. Cineplex has additional revenue streams. They have rec rooms, like David & Busters in the United States, which is up significantly. In addition, Air Canada flights show movies from Cineplex, people watch Cineplex news feeds. Cineplex also gets more value add from its theatres by selling VIP seats where you can order a glass of wine and a sandwich. Cineplex is also hosting video game tournaments in its theatres, packing people in to play or watch. This can take the average ticket from $15 to $50. He thinks the investment public has gotten Cineplex wrong and thinks the stock will rise back to $40 or $45. He is still buying it.

other services
David Baskin

President, Baskin Wealth Manage...

Price Price
$30.720
Owned Owned
Yes

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DON'T BUY

He does not own any oil companies. He is concerned about environmental groups and indigenous peoples who can slow down major energy projects. He believes that more pipelines will be built, but he is doubtful that they will be built in a time frame that is helpful to today's investor. He thinks it could be 3 to 4 years before the pipeline hits the coast.

oil/gas

He does not own any oil companies. He is concerned about environmental groups and indigenous peoples who can slow down major energy projects. He believes that more pipelines will be built, but he is doubtful that they will be built in a time frame that is helpful to today's investor. He thinks it could be 3 to 4 years before the pipeline hits the coast.

oil/gas
David Baskin

President, Baskin Wealth Manage...

Price Price
$43.080
Owned Owned
No

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TOP PICK
EnerCare Inc(ECI-T) 

June 12, 2018

They have a very stable business. They rent their water heaters to consumers and when the heaters fail people normally rent another one. This stability allows Enercare to pay a high dividend. Rising interest rates are the enemy of yield stocks, including Enercare but the dividend is likely to rise and the stock has gone down too much. (Analysts' price target is $24)

Consumer Products

They have a very stable business. They rent their water heaters to consumers and when the heaters fail people normally rent another one. This stability allows Enercare to pay a high dividend. Rising interest rates are the enemy of yield stocks, including Enercare but the dividend is likely to rise and the stock has gone down too much. (Analysts' price target is $24)

Consumer Products
David Baskin

President, Baskin Wealth Manage...

Price Price
$18.520
Owned Owned
Yes

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DON'T BUY
Fairfax Financial(FFH-T) 

June 12, 2018

Prem Watsa is often described as the Warren Buffett of Canada. He is opportunistic, not afraid of taking risk. Some of his bets have not worked so well but many have. Insurance companies make money in two ways: core earnings from underwriting, and the investment returns from premiums. Warren Buffett initiated a different approach for investing insurance premiums. Rather than putting it into very safe, but low-yielding, bonds, he invested in stocks. Watsa follows this model and Fairfax has benefitted. The recent rises in interest rates are also very positive for all insurance companies because all of them still buy long-term assets. Fairfax has done nothing for investors for a long while, but he is proposing a top pick in the insurance industry today, and believes that the category has promise.

insurance

Prem Watsa is often described as the Warren Buffett of Canada. He is opportunistic, not afraid of taking risk. Some of his bets have not worked so well but many have. Insurance companies make money in two ways: core earnings from underwriting, and the investment returns from premiums. Warren Buffett initiated a different approach for investing insurance premiums. Rather than putting it into very safe, but low-yielding, bonds, he invested in stocks. Watsa follows this model and Fairfax has benefitted. The recent rises in interest rates are also very positive for all insurance companies because all of them still buy long-term assets. Fairfax has done nothing for investors for a long while, but he is proposing a top pick in the insurance industry today, and believes that the category has promise.

insurance
David Baskin

President, Baskin Wealth Manage...

Price Price
$749.410
Owned Owned
No

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DON'T BUY
Goldcorp Inc(G-T) 

June 12, 2018

Gold has always had an outsized place in Canadian investors' minds, even more than in the United States. However, gold now competes with other quasi-moneys, like crypto currencies. Many people prefer the newer alternatives, seeing gold as old fashioned, maybe even medieval. He has no use for gold in a portfolio and does not see it having much value as a hedging instrument. He has been zero-weighted in precious metals for a long time.

precious metals

Gold has always had an outsized place in Canadian investors' minds, even more than in the United States. However, gold now competes with other quasi-moneys, like crypto currencies. Many people prefer the newer alternatives, seeing gold as old fashioned, maybe even medieval. He has no use for gold in a portfolio and does not see it having much value as a hedging instrument. He has been zero-weighted in precious metals for a long time.

precious metals
David Baskin

President, Baskin Wealth Manage...

Price Price
$18.540
Owned Owned
No

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TOP PICK

GM is not just a 1910 masher of auto parts. It has great technologies that are likely to put Tesla out of business. They will sell many more electric cars than Tesla and this part of GM is not being valued by investors. At $40 the stock trades at 7x earnings with a 3% yield. It is tremendously undervalued. He thinks it should go to $60. (Analysts' price target is $50.41)

Automotive

GM is not just a 1910 masher of auto parts. It has great technologies that are likely to put Tesla out of business. They will sell many more electric cars than Tesla and this part of GM is not being valued by investors. At $40 the stock trades at 7x earnings with a 3% yield. It is tremendously undervalued. He thinks it should go to $60. (Analysts' price target is $50.41)

Automotive
David Baskin

President, Baskin Wealth Manage...

Price Price
$44.180
Owned Owned
Yes

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COMMENT
Intel(INTC-Q) 

June 12, 2018

This used to be the 800 pound gorilla of the chip business but then chips became more commoditized. Now, Intel is getting its mojo back. They have rediscovered innovation, new products are gaining market share and the stock has risen sharply after doing nothing for a long time. He doesn't expect them to ever regain the iconic status that they had before because too many people now know how to make good chipsets. However, he thinks the stock today is worth considering.

electrical/electronic

This used to be the 800 pound gorilla of the chip business but then chips became more commoditized. Now, Intel is getting its mojo back. They have rediscovered innovation, new products are gaining market share and the stock has risen sharply after doing nothing for a long time. He doesn't expect them to ever regain the iconic status that they had before because too many people now know how to make good chipsets. However, he thinks the stock today is worth considering.

electrical/electronic
David Baskin

President, Baskin Wealth Manage...

Price Price
$54.820
Owned Owned
Unknown

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DON'T BUY
Linamar Corp(LNR-T) 

June 12, 2018

He thinks this is an impressive homegrown auto parts company that has done a great job competing in the international market, but Magna has done a better job. He thinks that there is no reason to own both Linamar and Magna and he thinks Magna is the better choice.

transportation equip & components

He thinks this is an impressive homegrown auto parts company that has done a great job competing in the international market, but Magna has done a better job. He thinks that there is no reason to own both Linamar and Magna and he thinks Magna is the better choice.

transportation equip & components
David Baskin

President, Baskin Wealth Manage...

Price Price
$63.600
Owned Owned
No

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PAST TOP PICK
Magna Int'l. (A)(MG-T) 

June 12, 2018

(A Top Pick May 17, 2017. Up 45%). Magna is invested across many different manufacturing platforms. They are no longer just in auto parts. They do complete vehicle assembly and have a foothold in autonomous vehicles and AI. They have an integrated factory platform across North America with almost equal numbers of plants in Canada, the United States and Mexico. He thinks they are trading at a modest price to earnings ratio, like all other auto companies. They just aren't getting enough respect.

Automotive

(A Top Pick May 17, 2017. Up 45%). Magna is invested across many different manufacturing platforms. They are no longer just in auto parts. They do complete vehicle assembly and have a foothold in autonomous vehicles and AI. They have an integrated factory platform across North America with almost equal numbers of plants in Canada, the United States and Mexico. He thinks they are trading at a modest price to earnings ratio, like all other auto companies. They just aren't getting enough respect.

Automotive
David Baskin

President, Baskin Wealth Manage...

Price Price
$84.620
Owned Owned
Yes

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COMMENT
Vail Resorts Inc(MTN-N) 

June 12, 2018

He is very impressed by this company, which has become a consolidator of the ski industry. They offer a pass that lets customers ski at any of their resorts, which lets customers hedge their weather risks. The stock has done unbelievably well.

He is very impressed by this company, which has become a consolidator of the ski industry. They offer a pass that lets customers ski at any of their resorts, which lets customers hedge their weather risks. The stock has done unbelievably well.

0
David Baskin

President, Baskin Wealth Manage...

Price Price
$279.500
Owned Owned
Yes

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DON'T BUY
Netflix Inc.(NFLX-Q) 

June 12, 2018

This has been a huge success story but if an investor has been holding it for a while, it is wise to take some of the profits off the table. The questioner wanted to know what other FAANG stock to invest in with money taken from the sale of Netflix shares. Baskin owns Apple, Google and Facebook. He thinks Apple is the cheapest one and Google is the most interesting one because there are so many promising projects inside Google. It is like buying a profitable advertising business and getting a handful of lottery tickets as well, for free.

This has been a huge success story but if an investor has been holding it for a while, it is wise to take some of the profits off the table. The questioner wanted to know what other FAANG stock to invest in with money taken from the sale of Netflix shares. Baskin owns Apple, Google and Facebook. He thinks Apple is the cheapest one and Google is the most interesting one because there are so many promising projects inside Google. It is like buying a profitable advertising business and getting a handful of lottery tickets as well, for free.

Unknown
David Baskin

President, Baskin Wealth Manage...

Price Price
$363.830
Owned Owned
No

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