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COMMENT
Markets. He is looking at 10% earnings growth this year. Sees some positive upside for the market in the form of high single digits, including dividends. Wouldn't be surprised to see a little pullback when markets digest earnings growth. Sees pretty good upside potential in the energy space. Expecting some decent upside in financials, especially the banks.
DON'T BUY
Has always been a really well run bank. The only issue he has is that on the last conference call, senior management was a little more cautious on their outlook. Also, with the low interest rates, the bank margins will be compressed. Long growth is going to be better-than-average compared to some of the bigger banks but the market has already recognize that. Very little upside potential so he prefers other banks. (See Top Picks.)
banks
TOP PICK
Highest dividend yield of all the banks. Good chance they may give some thought to increasing dividends. Made a fairly significant acquisition in the US Midwest, which will be a very good platform for growth through 2012-2014. Expect there earnings will be slightly better than other Canadian banks. Trades below 10X earnings.
banks
BUY
(A Top Pick Feb 10/11. Up 5.01%.) Incredibly well-positioned Canadian-based company. The big knock is that it primarily produces natural gas, which has put the stock in the penalty box. A low-cost producer. Have a million acres of land. If interested in gas, this would be the one to own. Will stay weak for the next 6 to 9 months.
oil
gas
COMMENT
Has being a really hot stock since its IPO last year. Has looked at the fundamentals and a company in an industrial business like this one that is generating 85% EBITDA margins, is not a sustainable business model. Have captured an unserved market in a very short period of time but he is sure that at some point there will be competition.
