Latest Stock Buy or Sell? Make More Informed Decisions!

Markets. There is not a lot of reason to have a lot of interest rate sensitivity in your portfolio. If you have some utilities and REITs, offset those with lifecos or rate reset preferreds. That gives you a bit of a barbell that will even its way out over time. If rates go up 25 or 50 basis points, a portfolio will be isolated. He only buys dividend paying stocks, and it is very important that those are companies that will grow their dividends. Looks for businesses that have free cash flow yield, pays some of the yield in dividends, has growth in the business and at the same time do some buyback of their shares. About 80% of his portfolio is rate agnostic, i.e. rates don’t matter; it is all based on earnings growth. He is expecting a nice rally before the end of the year.

A really boring business. Water heaters, water furnaces, rentals with almost a door-to-door sales style of business. This generates a lot of free cash flow. What is really interesting is their meter system. They go to large apartment blocks and install meter systems, and get a meter feed for every person on a monthly basis. That has a lot of torque to the upside. This is a new part of their business and you should see this coming in over the next 4-6 quarters. He likes the stock here. He doesn’t own it, but does own their debt. Dividend yield of 5.5%.

Power Corp. (POW-T) or Power Financial (PWF-T)? Doesn’t like either. Power Corp. owns Power Financial, but at the end of the day, you really own Power Financial as that is the only asset that is in there. The underlying assets of Investors Group and Mackenzie Financial are a bit of a challenged market going forward. He would prefer owning just Great West Life (GWO-T) which is part of Power Corp. also.

Power Corp. (POW-T) or Power Financial (PWF-T)? Doesn’t like either. Power Corp. owns Power Financial, but at the end of the day, you really own Power Financial as that is the only asset that is in there. The underlying assets of Investors Group and Mackenzie Financial are a bit of a challenged market going forward. He would prefer owning just Great West Life (GWO-T) which is part of Power Corp. also.

He holds gold only as an inverse correlation to the equity markets. Technically it should mitigate risks and should do well as equity markets do badly. This is one of the largest producers and has the best costs. Volatility is very high, so he sells Covered Calls on his holdings. His holdings on this company are very small.

There has been quite a bit of talk because of possible infrastructure spending in Canada. Thinks this is the best way to get the infrastructure spending of the Liberal government and/or the NDP government in Alberta. This is pretty well diversified across Canada. Valuation is not expensive at under 6X cash flow. They keep outperforming every quarter. There is probably another $4 upside to the stock with $18 being a fair price target for it.

An interesting stock. They buy royalties on different businesses. They have 3 holdings, a restaurant franchise, Sutton and Mr. Lube, and they get overriding royalties on these. He likes the model of the royalty business and thinks it is very solid. They are going to be able to recycle capital to other businesses, and eventually build a very stable royalty stream. Dividend yield of 8.3%.

Have made an offer to buy Canexus (CUS-T), which might run into a few regulatory hurdles. If they do manage to get the deal through, it is going to be very accretive. Have 2 other businesses, propane distribution and a consumer’s products division, (drywall and sheet wall that they sell.) The propane distribution is excessively stable. The dividend yield of 6.9% is very safe.

(A Top Pick Sept 11/15. Up 7.52%.) In September there was a lot of concern about China. As soon as this happens, people sell the stock. In reality, only about 2% of their business is mainland China, the rest being Hong Kong and Japan. When rates start to move, that will be a positive. Also, a significant amount of business outside of Canada is going to be positive on currency translation.

(A Top Pick Sept 11/15. Up 8.12%.) Had felt that the market was going to turn around, so he looked for solid businesses. Last quarter they grew sales per store by 5% on Tim Horton and 6% on Burger King. Very smart management team. A good place to put some money.

Stock fell because of a Short report. The report did not talk about fraud, but a little bit about aggressive accounting and capitalizing expenses on the R&D side. It also acknowledged that 50% of the business was rock solid. He would be a buyer at these levels. There is upside and there is growth. Financial technology is a part of the market where you want to be invested in.

He prefers Canadian National (CNR-T). Canadian Pacific had a little bit of a Hunter Harrison valuation baked into it. The stock has been growing into that valuation slowly, so the shares have been underperforming.

This is a key holding for him. If you are a dividend investor, you want to own some regulated utilities. Has a good stable yield. Also, diversifying outside of Canada into the US.

Clean balance sheet, but the stock is not reflecting that. He is a little confused on why the stock has been so soft. Thinks this is a stock that is going to perform well when oil prices start to move. This is going to be an okay investment going forward.

A very volatile stock and trades a lot with commodity pricing. They also have the retail franchise which has about $9 billion in assets, but doesn’t seem to generate too much cash. This is going to move a lot with the S&P 500 and the TSX. It is also going to move along with the sub indices of energy and materials. Soon as you start seeing that turn around, that is when you want to start making an investment.