BUY

Insurance companies have held up much better than the banks, and this company has knocked it out of the park in the past few quarters. Stock price has really done well. All the lifecos in Canada are doing the right thing by trying to grow the wealth management side of the business. Interest rates going up will help the lifecos, but it doesn’t look like that is happening anytime soon.

BUY

Continues to make acquisitions and has become the 3rd largest waste management company in North America. He believes there is still room for growth. The waste management business is very fragmented in North America. The company generates a lot of free cash flow and have done a great job of improving operations. In a defensive market, this is the type of company you want to own.

HOLD

Fundamentals have improved a lot since they went public. They sell branded tissue in Canada and private label tissue in the US. They have clearly laid out a roadmap of how their growth is going to happen and have delivered on that. Pays a very nice dividend. Got hurt by a rising US$ and input pricing. Better times are ahead. An excellent dividend which is fully covered. Expects that in the next 1-2 years, the company will be flush with cash and will either increase the dividends or launch another manufacturing plant to get a bigger share in the US. Dividend yield of 5%.

PAST TOP PICK

(A Top Pick Aug 5/14. Up 17.48%.) Half of its business is making fine paper and the other half is making filtration products, labels and packaging. Generating a lot of free cash flow and are making more acquisitions. They continue to raise their dividend. Still a Buy.

PAST TOP PICK

(A Top Pick Aug 5/14. Up 2.32%.) Facing tough competition from craft brewing, and beer is facing competition from other types of alcoholic drinks. Beer drinking is not going to grow any more but is going to slowly, slowly decline over time. But this company compounds capital. They charge $3 for sugar water and are able to use that to generate a lot of free cash flow to buy other brands and make acquisitions. The jewel in the crown is its 42% ownership in Miller Coors. At some point in time, something is going to have to happen with that joint venture. He is still buying under $70.

PAST TOP PICK

(A Top Pick Aug 5/14. Down 46.21%.) Has been hit really hard lately, but feels it has been overplayed and overdone. They get 50% of their revenues from advertising and 50% from affiliated fees. Thinks the assets are worth double what the stock is trading at. Trading at only 6X next year’s earnings, which makes no sense.

COMMENT

If you have done your research and you think it is a good quality company and that the runway of growth is going to continue, then you want to buy the stock. Pick a valuation where you are comfortable owning it.

COMMENT

For a long-term investor, this is probably a reasonable entry point. It has been a tough couple of years for them, but he thinks they are making all the right moves to improve the earnings pace. They keep buying back a lot of stock and raising the dividend every year.

HOLD

Continues to miss analysts’ expectations and he is glad that there is an activist in there to shake things up. They continue to generate a lot of free cash flow. There are concerns of legal issues in China. Have wonderful products and wonderful assets, but it is not being managed properly. A more reasonable level for the stock would be $55-$60, and if they are able to execute on some of the issues they are working with the activist investors, he thinks it could go back to the $80 range.

COMMENT

There is an opportunity here. The stock has really pulled back. It has been hurt by the slowdown in the Canadian economy, and demand for commodities has really hampered the business. For a long-term investor, there is upside. Businesses are cyclical. Has a low operating ratio. Always generates a lot of free cash flow.

COMMENT

Made a transformative deal. They pretty much sold their aftermarket products and then used the cash to buy back stock. This is a changed company and he would have to do more research before he could form an opinion.

COMMENT

Everybody is using credit cards and shopping is going mobile. You can’t pay for your online shopping with cash. Stock has popped recently because there is an opportunity for it to acquire VisaEurope. Beautiful balance sheet. Valuation is expensive, but they just compound capital. There is still more runway to grow its business. Dividend yield of 0.7%.

COMMENT

He thinks highly of the grocery chains in Canada. This is one of his largest holdings and has been very pleased with its performance and its management. There is still lots more opportunity for them. They are almost finished the Safeway acquisition and there is still excess capital for them to continue to grow the business.

BUY

What they have earned over the past year has been tremendous. They have a triple whammy. They are buying back stock, reducing debt and increasing dividends. Insurance is a black box and very hard to figure out, but with this black box he knows that the NAV is $75-$80 a share. With the stock price at only $60, he is going to continue to buy until it is trading well above BV.

TOP PICK

In his opinion, this has fallen to the lowest price book level since the financial crisis. They continue to grow their BV. Once the Kraft-Heintz deal closes, that is going to add earnings power. He likes the safety and security of owning good quality companies within their holdings. Also, has a giant equity portfolio. He could easily envision this stock getting back to the $150-$160 level.