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Has never been a fan of airlines and he is more renting this position. Got into a big quarter in Q4. Earnings just reported were up over 200%. Stock moved up, but not as much is he would have thought. Expects next quarter to be very good and thinks the stock will move up. Possibility that they may institute a dividend or buy back stock. Will continue to hold if it looks like the winter season will continue to be strong for them. Very good balance sheet.
New management team came in about a year ago and effects are just starting to be seen. Cut some of their lower margin business and concentrated on the higher margin areas. Over the last quarter, the 2 highest margin areas are the ones that have been increasing revenues much higher than everybody else in that portion of their business. Thinks the street still doesn’t know the story. 4.2% dividend.
TSX. Before, the macro environment was making a huge difference and all stocks were moving in the same direction. Over the last 12 months or so, especially the last 6 months, companies that are doing well operationally have been rewarded with higher multiples and those that are not are getting entrenched. It is better now for “stock pickers” like him. He looks at fundamentals of each individual company, looking for growth at a reasonable price. When the market becomes more comfortable overall, it trickles down to the small caps and this has really been shown in the US where the Russell 2000 has really outperformed. In Canada, small caps have underperformed in the last couple of years. As the TSX moves higher, money is going to start to flow to small cap names. Likes Canadian small caps but, on the resource side, you have to be very, very picky because a lot of the companies in the resource sector may run out of money. Make sure that they are low cash cost and have a half decent balance sheet and able to fund themselves.
TSX. Before, the macro environment was making a huge difference and all stocks were moving in the same direction. Over the last 12 months or so, especially the last 6 months, companies that are doing well operationally have been rewarded with higher multiples and those that are not are getting entrenched. It is better now for “stock pickers” like him. He looks at fundamentals of each individual company, looking for growth at a reasonable price. When the market becomes more comfortable overall, it trickles down to the small caps and this has really been shown in the US where the Russell 2000 has really outperformed. In Canada, small caps have underperformed in the last couple of years. As the TSX moves higher, money is going to start to flow to small cap names. Likes Canadian small caps but, on the resource side, you have to be very, very picky because a lot of the companies in the resource sector may run out of money. Make sure that they are low cash cost and have a half decent balance sheet and able to fund themselves.
Was very disappointed with the results of the trial with Apple (AAPL-Q) yesterday. Expects they will appeal. Balance sheet looks great, which includes $1.40 per share in cash. Pays a nice dividend. There are not a lot of catalysts coming up in the next 6 months in other trials. Wait until it starts trading sideways for a while, or under $3 would be a good entry point.
A “go to” name in copper in Canada. It is big enough and there is good liquidity in the story. Mexican operations are low cost in terms of copper production. In Canada they are higher but the blended costs are still fairly low on a relative basis. There are not too many mid-cap names in the copper sector. Good management.
Linamar (LNR-T) or Magna (MG-T)? All of the auto-parts companies have done really, really well. Multiples still, look cheap because there is a lot of growth but you have to be careful of that because it might be peak earnings here. Both have beautiful charts. Thinks Linamar trades at a little bit lower multiple. There is more liquidity with this one and they have quite a bit of European exposure.
Linamar (LNR-T) or Magna (MG-T)? All of the auto-parts companies have done really, really well. Multiples still, look cheap because there is a lot of growth but you have to be careful of that because it might be peak earnings here. Both have beautiful charts. Thinks this one trades at a little bit lower multiple. There is more liquidity with Magna which has quite a bit of European exposure.
Could see this stock at $15 in 12 months. Really likes the earnings growth. Ford (F-N) came out with good numbers today and this company supplies for the Ford Fusion and Ford Escape and numbers have been quite strong on both of these. Multiple is fairly low and feels that larger cap managers are moving down into the space to try and get that growth.
(A Top Pick Sept 28/12. Up 133.42%.) Still likes the operations of the company. Made a couple of acquisitions that he expects will be quite accretive going forward. They continue to raise their dividends. There are no analysts following the story, but are a few other mutual funds that are moving into the story. Expect they will continue to grow their cash flows over the next couple of years.
(A Top Pick Sept 28/12. Down 66.67%.) An exploration company and they continue to come up with good results. Juniors have been decimated here because this is not a cash flowing company. They have proved up a few million ounces and he expects them to continue to do so. They are doing everything that he wants them to.
(A Top Pick Sept 28/12. Up 66.43%.) Had a very strong quarter but was mixed in terms of their guidance. They were exiting the BlackBerry business and people were really worried if they were going to be able to replace it. However, they have started to replace it with higher margin business. Going forward, he feels their margins are going to increase. Has exited most of his position but still has some in one of his funds.
Had it as a Top Pick July 11/13 and feels that everything is playing out the way he thought. Starting to grow their production. Had another well that is producing about 780 BOE. Production is now about 10,000. Net backs continue to increase as a lot of their oil they were producing was tariff oil, much lower margins. Over the next couple of months they are drilling up another prospect that we’ll hear about by the end of the year, which could be worth $1.75 per share. Also have 3 joint ventures with majors that are huge targets.