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Stock Opinions by Bruce Campbell (1)

COMMENT
Still pockets of value? Not in large cap technology. But in a lot of the cyclicals, financials, and energy. In the runup to the election, there's a bit of a rotation away from the super high flyers. We're coming up to Canadian bank earnings in a couple of weeks. Decent chance they'll be better than last quarter, and so we'll see optimism. Stocks are trading at 10x earnings. Capital markets should have had a great quarter.
Unknown
COMMENT
Are you looking at "return to work" stocks? Yes, and the banks are in that group. For REITs, stay in retail instead of office. Not sure he wants to go out and buy Air Canada just yet.
Unknown
HOLD
With a 10-year time horizon, any of the banks are good investments. Low multiples, good dividends. Loan losses will be higher for a couple of quarters for sure. Dividends aren't being cut. You should have some banks in your portfolio. He owns it.
banks
HOLD

Prefers Enbridge, as the growth is higher and the dividend has become almost 7%. PPL is a safe place to be if we get a bit of a pullback. If you own it, keep holding.

pipelines
HOLD
Good company, yield is safe. Likes strategy going forward. He owns the preferred shares instead. Safe stock. Perfect for your TFSA as a senior. Yield is 7.4%.
electrical utilities
HOLD
In the grand scheme of things, a good yield with a decent strategy. Keep holding, though he prefers growthier names with corresponding dividend growth. Appealing because it's more renewable than the rest. Bit more quarter to quarter earnings risk, but no so that the dividend is in danger.
Utilities
BUY
He was zero energy for about 3 years. He now owns only Suncor. Impacted by price, but they're integrated. They make money in almost every situation. Free cash flow will be much higher in subsequent years with higher oil. Cut the dividend to be prudent. Good dividend yield. Probably a $30 stock a year from now.
integrated oils
HOLD

EMA vs. FTS Emera reported pretty good numbers. Both have foreign exposure. Both have growth to them and over 4% yield. Operating risk, but not political risk per se. Both are fine holds.

mngmnt / diversified
HOLD

FTS vs. EMA Emera reported pretty good numbers. Both have foreign exposure. Both have growth to them and over 4% yield. Operating risk, but not political risk per se. Both are fine holds.

electrical utilities
COMMENT

BAM has other deals in the works too, aside from this tender offer. Tendering your shares is safer, but if your time horizon is long enough and you can take a bit of risk, you can hang onto your shares. Obviously, BAM thinks there's some value there.

REAL ESTATE
PAST TOP PICK
(A Top Pick Jul 12/19, Up 0%) Still owns it. Most growth among the pipelines. Good recent quarter, and reiterated dividend and earnings growth. A good entry point today, down $1.50 from $45.
oil / gas pipelines
PAST TOP PICK
(A Top Pick Jul 12/19, Down 10%) Good earnings, but hurt by the perception and reality of low interest rates. Trading less than 10x earnings. A bit contrarian, but still a good entry point around $20.
insurance
PAST TOP PICK
(A Top Pick Jul 12/19, Up 11%) Still likes it. Trend to cashless society is getting more entrenched. Impacted by lower economic activity, but rebounded nicely. Trades more like a tech stock than a consumer stock.
other services
HOLD
Fine as a holding. But the majors are cheap enough, and they'll move first. Slightly higher losses coming to CWB because of the oil patch. It's a hold. Wouldn't worry about the dividend too much, but he'd prefer one of the majors at this stage.
banks
HOLD
Views the golds as a trade, not a 10-year hold. This one is doing well. Their margins are expanding. So still some upside movement, but we're running out of momentum. If you hold it, hang on.
precious metals
HOLD
Shouldn't be more than 10% in gold, given the volatility. As long as it's an appropriate percentage of your portfolio, you'll be fine.
Golds
COMMENT
Buy an ETF for gold exposure? The Canadian gold ETF is 20% Barrick and 20% Newmont, so you get 5 seniors and the rest are juniors. That's a fine strategy. You could also look for those that haven't moved yet. Argonaut Gold for example, up 9% today, is worth a look back at $2.50 or 2.60.
Unknown
BUY on WEAKNESS
Up 9% today, it's worth a look back at $2.50 or 2.60.
Mining
BUY
It's now cheap, trading at a discount to NAV. Sees it eventually getting back to $35, but maybe not in the next 6 months. Should catch a bid with the rest of the financials. This is the one time investing in Power Corp would make some sense on a catch-up basis.
mngmnt / diversified
COMMENT
Invest in a financial conglomerate or in a pure play like a bank or lifeco? For the one that's left in Canada, Power Corp, it hasn't worked. He'd prefer Manulife to Great West Life for growth. And he'd prefer banks for growth. This is the one time investing in Power Corp would make some sense on a catch-up basis.
Unknown
PARTIAL SELL
There are good stocks and good companies. Still not making money, trading at 40x sales. Beneficiary of the pandemic and stay at home trend. But don't think it's going to keep going. Dangerous. The first time there's a miss, there will be a big miss in the stock. If you've held it for a while, he'd take profits.
0
DON'T BUY
Spinning out the eyecare side. Better to go to the US with bigger, safer stocks or one of the ETFs.
Healthcare
BUY

If he was going to buy a silver producer, this would be it. The best of the Canadian producers. His preference is Wheaton Precious Metals as a royalty play.

management / diversified
COMMENT
It's the cheapest REIT right now. Cut the dividend, as they should have. Half retail, half office/industrial. He sold, to avoid office risk. You can own it for the yield, as the stock goes sideways. If you want growth, go elsewhere.
property mngmnt / investment
HOLD
It's after another acquisition in Australia, and if they do, the stock will hit $47-48, and then he'd trim. Hold it for now, as it's doing great.
food stores
BUY on WEAKNESS
Part of their growth is by acquisition, funded by equity issues. Stock treads water for a while, as new owners get comfortable. In next 6-12 months, they should do another acquisition with higher dividends and earnings, and the stock will go into the low $20s. Be a holder, and even a buyer on weakness.
electrical utilities
TOP PICK
Always looked expensive, but now is a rare opportunity. The food services side was impacted by the pandemic. Competitors are struggling, so acquisitions are coming that should boost the growth. Raised dividend. Yield is 1.98%. (Analysts’ price target is $39.11)
food processing
TOP PICK
Popeye's is still trending plus 20% Y/Y. Burger King is a small positive. Tim's is still minus double digits, but this should grow. A year ago, it was $105, and you don't get this chance too often. Yield is 3.78%. (Analysts’ price target is $83.38)
food services
TOP PICK
One of the largest device companies in the world. There's a lot of pent-up demand coming for surgeries. It was $120, and now it's around $100. Should see $120 again. Yield is 2.29%. (Analysts’ price target is $110.50)
biotechnology / pharmaceutical
COMMENT
Market Outlook He thinks everyone is of the belief the market will not be another 20% gain next year. Only twice since WWII, when the market had a gain of 20% in a year has the following year been down. In fact, it has averaged a 9% gain. He would be happy with a 4-5% return this year, plus returns on dividends. 2021 could be another story, following the US elections and other geopolitical events. The US attack in Baghdad on a high ranking Iranian official has resulted in oil and gold rallying. The US Administration has warned US citizens to leave the region to avoid repercussions. We will have to wait and see how things play out. Phase II of a Chinese deal is required for President Trump to be able to influence a market rally. He feels multiples on earnings were stretched in 2019 and there is still some value out there, but it is causing him to become nervous about tightening following the US Presidential election in 2020. This could be led by a market sell off going into the election.
Unknown
BUY
He owns this one. The recent financing has been pulling the stock down recently. This will allow the company to grow by acquisition in the US. He thinks there is no worries and sees a 8-10% earnings and dividend growth. A good place to be. Yield 4%
electrical utilities
BUY
The share price is rising with higher gold prices. They are adding production in Ontario to expand their holdings beyond Mexico. He likes the management team, but has not come back to buying them yet. If you like gold, the stock is pretty cheap here.
Mining
DON'T BUY
A junior oil company that has shown some recovery. He expects the seniors to move first and this group will likely lag. This would not be his favorite in the space. There are better opportunities.
oil / gas
HOLD
He owns this one. It is about 50% international -- almost all outside of the US. This makes it different from all other banks. The outlook is looking good. They have bought some wealth management assets in Canada. Q4 earnings were in the middle of the pack. He thinks the dividend will grow. He would continue to hold.
banks
DON'T BUY
They stubbed their toe on Q4 earnings and arrived late to buying assets in the US. In Canada, they have been very aggressive on mortgage lending. He does not own it presently. He is not a fan of the overall leverage to the Canadian economy.
banks
BUY
Brookfield has done well in general. This would be a good entry into a infrastructure company. Good diversification. He would be a buyer.
Energy Infrastructure, Industrials & Utilities
PARTIAL BUY
Time to take profit? It would be beneficial to the banks if interest rates went higher. Canadian banks dealt with higher loan losses last year and M&A activity was down. If that does not materialize again this year, this would be a good entry point.
banks
PARTIAL SELL
In technology, there are only a couple of stocks big enough for Canadian pension funds to own. This is one of them and it has not become very expensive. He would take some partial profits and buy back in on a pullback. On a market dip, this could fall more than the market average as a result.
consulting
BUY on WEAKNESS
He does not own this one, but holds their debenture. There was an issue with one of the subsidiaries and the holdings are doing better now. It is not approaching full valuation -- near $22-$24. He would buy on weakness -- somewhere around $19.
Financial Services
COMMENT

ENB vs IPL? A classic case, where he prefers ENB (due to its growth profile). Getting a higher yield on IPL will be overshadowed by a higher capital return on ENB. He owns ENB.

oil / gas pipelines
COMMENT

ENB vs IPL? A classic case, where he prefers ENB (due to its growth profile). Getting a higher yield on IPL will be overshadowed by a higher capital return on ENB. He owns ENB.

oil pipelines
PAST TOP PICK
(A Top Pick Jan 03/19, Up 9%) It has underperformed since the prospect of interest rates has changed. It continues to trade as the only REIT at a discount to its NAV -- the cheapest REIT out there. Its largest single building is in Calgary, so if oil prices could rise they will rise faster than the rest.
property mngmnt / investment
PAST TOP PICK
(A Top Pick Jan 03/19, Up 4%) He holds it as he believes farmers will continue to play catch up on plantings. Yield 4%
agriculture
PAST TOP PICK
(A Top Pick Jan 03/19, Up 7%) An improving balance sheet and using cash to pay down debt and buy back shares. He expects a double digit return this year. Yield 6%
integrated oils
HOLD
A well run company that has a blend of oil and gas. It has rebounded in price nicely. This is one of his five go-to names in the energy space.
oil / gas
BUY on WEAKNESS
Dividend safe? When the yield gets this high, the market is telling the company the dividend should be cut. In this case, he thinks it should to shore up the balance sheet. Their exposure to Europe makes it advantaged. He would be a buyer when they cut the dividend. Yield 13%
oil / gas
COMMENT

He owns ENB and TRP instead. He sold this to reduce his exposure in the area. Nothing wrong with the company, he just sees better dividend and capital growth opportunities with the others. Yield 5.3%

pipelines
BUY on WEAKNESS
Parent or the Subs? It has done well -- up 46% in one year. It won't repeat this again this year and the NAV may be fairly valued. Over 3-5 years this would be a good holding. If you are holding for one year, he would wait to buy on weakness -- about 5-7% weaker.
management / diversified
HOLD
They had become over leveraged in Canada. The fall from $30 has yet to recover. Permian production in the US could fall, but it is not enough to drive natural gas prices to drive back to $4 per mcf. This is a hold right here.
oil / gas
DON'T BUY

In a way the new company will become an orphan. It is still thought of as mostly a natural gas play. The new ticker will become OVV in the US. He would prefer ARX, instead.

oil / gas
BUY on WEAKNESS

A value stock that has been much higher in the past. It looks cheap today. CIBC analysts expect the takeover value to be $40 per share. He would be a buyer at $27 and has been doing so for his own account.

Automotive
COMMENT
Alberta curtailment impact on differentials? The Alberta government is trying to help smaller producers with the regulated curtailments. It costs $12/bbl to rail barrels to the US gulf coast. He thinks the differential should trade between $12-$18 per barrel. He believes the Alberta government will continue the strategy to avoid the differential reaching $23 or more.
Unknown
DON'T BUY
Dividend safe? They did a convertible debenture that he participated in. This is an Edmonton based land bank company. A longer term play. What tends to happen is goes quietly along for a while then they sell off an asset, which causes a spike up. It does not have a large enough dividend to hold investors in long enough. That is why he bought the debenture instead.
REAL ESTATE
HOLD
Like the other Canadian telcos, the stock has bounced back as the outlook on interest rates changed. Telus is fine here and he expects a high single digit return, including the dividend.
telephone utilities
HOLD
They have not been able to totally establish themselves following the debacle with their phone technology. At this price level it is a hold. Nothing to attract him to buying.
electrical / electronic
TOP PICK
Parent of Tim Hortons. A stock that has under-performed relative to its peers. A recent new purchase for them. Popeye's is doing great in the US as well as Burger King. The stock is not cheap, but he likes the yield here. Yield 3.12% (Analysts’ price target is $101.75)
food services
TOP PICK
In the fall, Suncor actually lagged the performance of the energy space, so he sees there is opportunity to play catch up. Free cash flow is up to $1 billion per year. He expects higher dividends and greater efficiency. Yield 3.91% (Analysts’ price target is $49.53)
integrated oils
TOP PICK
It had a rare miss in Q4 on earnings. He has the most confidence of any Canadian bank that they will be able to recover. Over 50% of their business is in the US retail space. He expects a dividend increase as early as February. He thinks it should be trading about $80 next year. Yield 4.05% (Analysts’ price target is $79.00)
banks
COMMENT
The U.S. is doing better than we are, because Canada has a resource--and now, a gold--drag. Gold has pulled back recently like yesterday. Some TSX sectors are cheap. Financials are fine, for instance; Canadian banks do well in recessions as they manage risk well. So, you will do well with banks, long term though they haven't done well in the past 18 months due to flat rates and mortgage worries.
Unknown
BUY on WEAKNESS
A long-term hold. He's been buying around $28, though has moved above $30 today. A profit warning last quarter led to a pullback and buying opportunity. They've had a checkered past 12 months, but it's okay moving forward. It's a play on iPhone's continued growth. Now, it's a dollar away from an entry point.
misc industrial products
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