COMMENT
S&P 500 dividend yields have recently moved above the 10-year bond yields. Very significant and is telling you that if you can stand the volatility, you have to at least consider equities as being overly cheap. If you extend back and look at where earnings yield is, it hasn't been this high in 20-30 years. When you are buying companies, you are buying their earnings power. You should consider large-cap dividend stocks, those with reasonable balance sheets.
BUY
Natural gas processor and its byproducts. They are in a very good spot. Feels there is even more room even though it has hit 52-week highs. They benefit from a low natural gas price and the byproducts. Could see $55 in the next 1-1.5 years. Yield of 4.2%.
COMMENT
Last couple of earnings reports have disappointed the street. Trade at around 2X book. US strategy has failed. Have been impacted by being a beta for the global market. Doesn't expect it will do anything for the next 6 months. Needs the global markets to recover. This is a 2012-2013 story. (See Top Picks.)
DON'T BUY
6.46% strip bonds expiring May 2042? Normally he does not give money longer than 7 years because the business cycle is 3-4 years. You not getting paid enough to extend that far out. He owns 2016 bonds.
BUY
Likes that it trades very cheap on a cash flow basis. Their copper assets and the new mines that are going into production will really add to the bottom line.
HOLD
Really interesting at this point. Their business has not fallen that drastically. They are a beta for the financial markets and specifically track the bank indexes. Their financial products are highly sensitive to a cut in spending for a lot of the banks. However, they also have legal, medical and marketing data. Trading at 5X EBITDA versus their normal 7X.
BUY
Has the wind at its back that not only does it have the capital, but their strategy is being deployed (being accretive in the US). Dividends will go up, but probably not for the next 2 quarters.
TOP PICK
Purchase and refurbish old apartment buildings in Alberta where vacancy rates are dropping. Starting to get some pricing power. Really cheap on NAV value. Don't pay out anything but use their free cash flow to continue growing the bottom line. Management owns 30% of outstanding stock.
TOP PICK
7% bonds due 2014. Pristine balance sheet. Almost have no debt. Not looking to have it converted into equity.
TOP PICK
(A Top Pick Sept 1/10. Up 12.37%.) Senior care is a really complicated space. This one is so much each year because it has all its retirement/nursing facilities in Ontario. Getting into more higher end real estate and are getting CMHC financing..
PAST TOP PICK
(A Top Pick Sept 1/10. Up 21.43%.)
PAST TOP PICK
(A Top Pick Sept 1/10. Up 7%.) 7.75% bonds maturing October 2015.
SELL
Very good company but they’ve had their issues. Bulk of their funds historically where in equities, which have high margins but because of their conservatism they are shifting into bonds with lower margins. Although the ROE is high, it is starting to compress. Growth in assets is starting to plateau. There is nothing in this sector that gets him excited.
SELL
Not a big fan of what you are getting here. You are not getting a fantastically or terrifically managed company.
COMMENT
Prefers Mosaid (MSD-T), which this company is trying to acquire as they have a bit of a profit hole they are trying to fill. Doesn't think this deal will go through. If it goes through, he likes the combined entity and would buy it.