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Latest Stock Buy or Sell? Make More Informed Decisions!
Today, Paul Gardner, CFA and Hap (Robert) Sneddon FCSI commented about whether XLB.TO, HSE.TO, XEG.TO, POT.TO, FGE.TO, CVE.TO, OSG, MFC.TO, FEL.UN.TO, VRX, CNE.TO, NGL.TO, CGL.TO, BA.TO, QTRH.TO, TCW.TO, AEM.TO, PM, UUU.TO, CNR.TO, YRI.TO, AVR.TO, SIA.TO, KMP.UN.TO, CSCO, SC.TO, TD.TO, LNF.TO, MEQ.TO, REI.UN.TO, AAPL, Y.TO, BTB.UN.TO, CGX.TO are stocks to buy or sell.
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N/A
Markets: Markets should take a breath after 4 months of rally. He is driven by a chart showing earnings yield vs. bond yield. There is now a real gap. The public systems are bankrupt (sovereign debt, bonds) but the private systems (equities) are not. Conservatively balanced companies are raising their dividend. On a balance sheet they are less levered and payout ratios are lower. This is favorable for equities.
DON'T BUY
Held it for a year and a half but sold it based on valuation. It did as much as he could possible see. They are earning great margins out of 3D even though it has come off. Their loyalty program is paying off. Digitization of films, which is happening, will help increase their margins. He would get excited again in the low $20s.
other services
BUY
85% of free cash flow is paid out so dividend probably won’t go up. It is possible Bell could want to take them out. IT all comes down to fiber. They are doing fiber to the home. It is the first time they will be able to compete on the TV space. He owns the debt and the stock. Likes the company, but it is early days.
Paul Gardner, CFAOwned
Utilities
BUY
Just did some equity financing. He thinks it is a consistent player. It trades at a slight discount to NAV. Good enough portfolio to get you an 8% yield.
Paul Gardner, CFAOwned
income trust
RISKY
Bonds maturing in the next 3 years. He has recently engaged into the bonds. Thinks the rest of it is worthless. He thinks they will go into receivership. The bondholders get to take the asset. When it comes out of restructuring, you will have a company at 2.5 times EBITA. He thinks he is getting compensated for the risk and will get paid in full.
Paul Gardner, CFAOwned
communicationsmedia
BUY
Is the largest retail strip mall REIT. Can’t grow more in Canada so are growing into the US. They will probably add value because you avoided the wipe-out over the last 3 years. Thinks it could go as high as 25% US. He owns the debt.
Paul Gardner, CFAOwned
property mngmntinvestment
TOP PICK
No dividend, but it is so incredible. They take buildings in Alberta and refurbish them and then re-lease them. Hot economy there. Trades at a discount to NAV. Will eventually pay a dividend. CMHC financing is used.
Paul Gardner, CFAOwned
property mngmntinvestment
TOP PICK
Management is so solid. There is no debt on the balance sheet. Even if the economy falls off you still have to renovate your home to stay in it. You are almost getting the on going business for a really cheap valuation.
Paul Gardner, CFAOwned
specialty stores
TOP PICK
One of his largest positions. Likes the deployment of capital in the US. When US economy finally straightens itself out, they will do well. They are probably going to make a good return on equity with the US investments.
Paul Gardner, CFAOwned
banks
PAST TOP PICK
PAST TOP PICK
(Top Pick Feb 23/11, Up 25.95%) Likes the space. Shipping contract that Irving got out of the gov’t will cause a lot of migration out east into their properties.
Paul Gardner, CFAOwned
property mngmntinvestment
BUY
Has been his top pick in the past. He likes the consistency of it. Nursing homes and senior care homes in Ontario specifically. Don’t have to deal with the US like the other companies. You are, in a sense, subsidized by the province. Payout ratio is conservative and 14x price to AFFO.
Paul Gardner, CFAOwned
other services
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