COMMENT

It was just announced that the company is cutting orders as unsold merchandise piles up in the US. US economy is not exactly swimming along at a good pace. This company is probably the premier company globally at managing inventory. If they have made a bad bet on inventory, there are others who are even worse.

COMMENT

Arguably Canada’s best managed and safest bank but, because of that, it is also one of the slowest growing because ROE is not as much as any of the others. He would choose to invest in other banks over this one, such as Bank of Montréal (BMO-T), Bank of Nova Scotia (BNS-T), CIBC (CM-T) as well as Royal Bank (RY-T), which has the highest ROE, but you are also paying the most as compared to the other 2.

COMMENT

Very nice ROE. If he were projecting most of the banks out a year from now and looking at balance sheet growth, he would see 10%-15% in dividends across the board. If we get some valuation increase (price to book), the numbers could be better than that.

COMMENT

This still has balance sheet issues. Stock keeps drifting higher as time goes on with the market hoping that those balance sheet issues are slowly getting behind it. It needs time to heal. Thinks it can drift higher from here.

N/A

Energy. Is the volatility a sign that the market does not know what it is doing or is there something to be read into it? Part of the answer is that the evaluation of the stocks are sort of high enough so that you can see some optimism in them, but low enough so that is some value comes in, they can go. However, in the last couple of years we haven’t seen anything there at all and they have just been fluttering.

COMMENT

Has done so well that it has almost drifted back up again to its usual long-term high in price to book terms. There has been virtually no growth in the balance sheet for some period of time. He would guess the dividend is what is driving the company. It could go a little bit further than here, maybe a couple of dollars.

HOLD

Historically it has drifted down to these kinds of levels, and then had enormous runs as things have picked up again. There has also been some balance sheet erosion because they are paying out too much in terms of dividends. Given the yield that they have, the dividend should be cut somewhat.

COMMENT

Has been recovering after the catastrophe of 2008-2009. Had a great run, but it hit his initial target of about $18 and has been setting back ever since. Has a downside target of about $15 where it would hit some good solid support and he would be interested in coming back to the stock at that time.

COMMENT

(Market Call Minute.) Had a big pullback from about 4X Book to about 2X Book. He is intrigued at these levels.

COMMENT

(Market Call Minute.) Stock is at a nice high level, but then all of the building stocks and paper stocks have had enormous runs. They are at cyclical highs and he would be cautious on a long-term hold.

COMMENT

(Market Call Minute.) Got up to 2.5X Adj BV and he put out a Sell on the stock. You couldn’t miss. Another $2-$3 down and it will be a nice time to Buy.

COMMENT

(Market Call Minute.) With this one, you are now riding with Loblaw’s (L-T). ROE is fairly modest on Loblaw’s and he didn’t think either one going to go any further.

N/A

Energy. Every data point he has received up until now has been very encouraging. There has been very strong gasoline consumption and crude oil demand in the US. Price of oil has been over $100 for the last 15 months during which there have been many worries. None of these worries ever came to fruition. A very, very recent data point in the last 2 weeks indicates US investors are turning back to Canada. 2014 is shaping up to be a really good year for Canadian oil producers. There is still too much natural gas. Average rig count on rigs drilling for natural gas is down about 60%-65% from its highs. At the same time, gas is off 25%. He sees a ceiling price of about $4-$4.25 for several years.

BUY ON WEAKNESS

Sold his holdings at around $30. Stock is weak on concerns Q3 is going to be weak. Have been guiding for a level of production ahead of where they will be coming in. If it drops another dollar or so, he thinks he will re-add to his holdings.

HOLD

Going through a turnaround process. Prefers Encana (ECA-T) over this. Good quality assets but probably not the best execution in terms of costs to bring on new production. Balance sheet is a little stretched at 3X debt to cash flow. They are intending to sell more assets into what is already a very bloated asset market.