Latest Expert Opinions

Signal
Opinion
Expert
COMMENT
COMMENT
January 30, 2015

Would you Short this for CGI (GIB.A-T) or West Fraser (WFT-T)? He wouldn’t Short a bank, even if he believed the banks went $5 lower. He would maybe Sell a Call. He doesn’t want to play the negative yield. This is a dangerous game. Banks have a tremendous ability to make money over the long term. This one has 24% of its earnings from the US and will benefit from a weaker Cdn$.

Toronto Dominion (TD-T)
January 30, 2015

Would you Short this for CGI (GIB.A-T) or West Fraser (WFT-T)? He wouldn’t Short a bank, even if he believed the banks went $5 lower. He would maybe Sell a Call. He doesn’t want to play the negative yield. This is a dangerous game. Banks have a tremendous ability to make money over the long term. This one has 24% of its earnings from the US and will benefit from a weaker Cdn$.

Greg Newman
Director & Portfolio Manager, Scotia Wealth Management
Price
$50.600
Owned
Unknown
BUY
BUY
January 30, 2015

This has growth and this is a consolidated market, and they are really likely to capitalize on that and grow by acquisitions. He has been buying currently. Still trading at 8.9X 2015 EV EBITDA, versus its 5 year average of 9.3.

CGI Group (A) (GIB.A-T)
January 30, 2015

This has growth and this is a consolidated market, and they are really likely to capitalize on that and grow by acquisitions. He has been buying currently. Still trading at 8.9X 2015 EV EBITDA, versus its 5 year average of 9.3.

Greg Newman
Director & Portfolio Manager, Scotia Wealth Management
Price
$50.350
Owned
Yes
BUY WEAKNESS
BUY WEAKNESS
January 30, 2015

Doing very well. Their Q3 same property net operating income growth is 2.6% and he expects this momentum to continue through 2016. Have been selling their non-core and investing in their core developments. That is pretty well done now and will be turning to developments. He models 10% AFFO growth over the next couple of years. Trading in line with the rest of the REIT sector. The balance sheet has been improving. Payout ratio is reasonable at 69%.

Doing very well. Their Q3 same property net operating income growth is 2.6% and he expects this momentum to continue through 2016. Have been selling their non-core and investing in their core developments. That is pretty well done now and will be turning to developments. He models 10% AFFO growth over the next couple of years. Trading in line with the rest of the REIT sector. The balance sheet has been improving. Payout ratio is reasonable at 69%.

Greg Newman
Director & Portfolio Manager, Scotia Wealth Management
Price
$12.640
Owned
Unknown
COMMENT
COMMENT
January 30, 2015

At $50 oil and $3.25 natural gas, cash flows per share fall 40%. Their balance sheet does get worse and goes from debt to cash flow at 5.4 times. If commodity prices stay as low as they are, they are going to have to cut their dividend and their CapX even more.

Encana Corp (ECA-T)
January 30, 2015

At $50 oil and $3.25 natural gas, cash flows per share fall 40%. Their balance sheet does get worse and goes from debt to cash flow at 5.4 times. If commodity prices stay as low as they are, they are going to have to cut their dividend and their CapX even more.

Greg Newman
Director & Portfolio Manager, Scotia Wealth Management
Price
$15.540
Owned
Unknown
SPECULATIVE BUY
SPECULATIVE BUY
January 30, 2015

Trading at 6.4X versus 11.4, its five-year average, so it is cheap. Have just restructured, so that is complete and it can derive cost savings. Its debt to EBITDA is pretty low at 2.1, well below its debt covenants. What is sad is the weak outlook for oil and gas, and for miners. The payout is very generous. This is worth a shot for somebody who doesn’t mind taking a little bit of a risk.

Wajax Corp (WJX-T)
January 30, 2015

Trading at 6.4X versus 11.4, its five-year average, so it is cheap. Have just restructured, so that is complete and it can derive cost savings. Its debt to EBITDA is pretty low at 2.1, well below its debt covenants. What is sad is the weak outlook for oil and gas, and for miners. The payout is very generous. This is worth a shot for somebody who doesn’t mind taking a little bit of a risk.

Greg Newman
Director & Portfolio Manager, Scotia Wealth Management
Price
$24.250
Owned
Unknown
PARTIAL BUY
PARTIAL BUY
January 30, 2015

Caterpillar (CAT-N) came out with a weak outlook recently, which hit this company. His numbers are even more negative and assumes new equipment sales fall 20% in Canada, 10% in South America. Even with that, given their strength in product support, he sees their overall earnings actually rising by 5% in 2015. If his assumption is right, it means they earn a $2.29 free cash flow, which gives them about 11% free cash flow yield. If you are looking long-term, the dividend is safe with a 34% payout ratio and the balance sheet is strong. This could be accumulated down at these prices.

Finning Int (FTT-T)
January 30, 2015

Caterpillar (CAT-N) came out with a weak outlook recently, which hit this company. His numbers are even more negative and assumes new equipment sales fall 20% in Canada, 10% in South America. Even with that, given their strength in product support, he sees their overall earnings actually rising by 5% in 2015. If his assumption is right, it means they earn a $2.29 free cash flow, which gives them about 11% free cash flow yield. If you are looking long-term, the dividend is safe with a 34% payout ratio and the balance sheet is strong. This could be accumulated down at these prices.

Greg Newman
Director & Portfolio Manager, Scotia Wealth Management
Price
$20.950
Owned
Unknown
TOP PICK
TOP PICK
January 30, 2015

One reason he likes this is the real estate play, but the big reason is that 63% of their business mix comes from the US. He thinks you will benefit from a stronger US consumer and lower oil. They report in Cdn$, so are going to benefit from the US dollar exposure. Have been doing well in Q3 on their top line growth, bottom line growth and margins. Yield of 0.85%.

Hudson Bay Co. (HBC-T)
January 30, 2015

One reason he likes this is the real estate play, but the big reason is that 63% of their business mix comes from the US. He thinks you will benefit from a stronger US consumer and lower oil. They report in Cdn$, so are going to benefit from the US dollar exposure. Have been doing well in Q3 on their top line growth, bottom line growth and margins. Yield of 0.85%.

Greg Newman
Director & Portfolio Manager, Scotia Wealth Management
Price
$23.420
Owned
Yes