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Google (GOOGL-Q) or Apple (AAPL-Q)? Given this choice, he would pick Google. On a balance sheet level, etc., they are very similar. Google is a software company whereas Apple gets about 60% of their revenue off of one product, the iPhone. There has not been a real product from them for a long, long time. Also, this company has gone up a lot more, but that has to do more with financial engineering, as opposed to anything else.
Spun off Cenovus (CVE-T), which he thought was foolish. The gas market fell apart, and Encana went through a very difficult time. This is very much more of a restructuring story in the last little while. Have new management which is doing a good job. It’s going to be a much slower process now. Would prefer others.
Power Financial (PWF-T) versus Power Corp. (POW-T)? Power Corp. is a holding company, so it is always going to trade at a slight discount. If you really want upside, you should just own the underlying assets. Conglomerates tend to trade at a discount because people are not going to give you full value for all the assets you own. Owning either of these will do well for you.
Power Financial (PWF-T) versus Power Corp. (POW-T)? Power Corp. is a holding company, so it is always going to trade at a slight discount. If you really want upside, you should just own the underlying assets. Conglomerates tend to trade at a discount because people are not going to give you full value for all the assets you own. Owning either of these will do well for you.
This is a real estate company, not a REIT, and does not pay a dividend like REITs do. Management feels it is best to keep on reinvesting, as opposed to paying it out to shareholders. Had a nice little run in the last little while, and will continue to do well. Management buys its assets cheaply and re-develops them.
Trades at a discount to the rest of the banks because it is considered more of a Quebec bank. They have done a lot of acquisitions in the last little while. It will never give you the full multiple that all the other banks give you. Feels there are better growth opportunities in Toronto Dominion (TD-T) or Royal (RY-T), but you are fine to own this one. 4.2% dividend yield.
What is the advantage of owning this, rather than owning a good Canadian bank? Canadian banks are incredible businesses to own at these levels. From a multiple perspective, Canadian banks trade at 12 or 13 times earnings, and are over 2X book. From a valuation perspective, US banks are trading at much cheaper multiples. Also, people perceive growth opportunities to be much higher.
US telecom sector is cheaper than the Canadian one. You are not going to see a tremendous upside in the stocks. They are much more fairly valued, so you are going to get the dividend plus maybe 5%-6% growth in the stock price. This company has some potential good growth opportunities because they now own all the wireless assets. You should get a nice 10% rate of return on this.
One of the largest investment banks in the US. He is very bullish on banking in general, but feels investment banking is a very good ROE business. Lots of pressure on the capital side for these companies, but this one trades at 1.1X Book, and he could see it trading at 1.5X Book. Has a great franchise in the asset management business.
European banks? Thinks banks globally are going to do better because the economy is turning around. Deutsche Bank (DB-N) is highly levered to the capital markets as opposed to retail. Because of this, you are playing a capital markets bank, and if that’s the case, he would rather buy Goldman Sachs (GS-N). There are a lot of European banks that are trading at a very large discount to their BV.
Fairly cheap and cheaper than all the Canadian financials. Has lots of capital, and pays a nice dividend. Has an excess of capital because they are not sure what is going to happen in the regulatory environment. If they are put in a situation where they can keep less capital, they will definitely be increasing dividend and buying back shares. Also, trades at a much cheaper multiple than the Canadian lifecos.
