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Has held in remarkably well given the manufacturing slowdown in Canada. One of his largest holdings in one of his funds. One of the 2 cheapest stocks in the universe that he covers. A really strong ROE at 23%. Trading at 4.5X Price to Free Cash Flow, so is really cheap. Dividend yield of 6.5%. Pristine balance sheet.

Just did an equity raise, because of their Maple bank that got shut down in Germany recently, where they took a loss. Thinks the market got a little too fussed about that, as it is not too material for this bank. Just over 7X PE. 5.8% dividend yield. A good stable company that is not going anywhere.

What he would call a battleground stock. A hedge fund hotel that has really hurt a lot of people. Purely speculative at this point. Has just about as bad a price momentum as you can get. Doesn’t cash flow at all and has a ton of debt. There is bankruptcy risk here.

Still a Sell for him. Has a Short on it in all 3 of his funds. It has never been there from a valuation perspective. The retail operation continues to struggle. Occasionally gets a pop because of their real estate asset that is supposed to be spinning into a REIT, but never seems to materialize. Too much debt. 11X EBITDA. Trading at 30X earnings. Very low ROE at about 5%.

Energy. In general, stocks are cheap and a lot of them are trading below BV. For a 10 year hold, from a sector perspective you want to be rotating into them. However, on a case-by-case basis, some may not make it. A lot have far too much debt and will have to do some restructuring, whether it is issuing equity which will dilute you, reducing or eliminating the dividend, or the worst-case scenario, the bondholders becoming the new equity holders. You are probably better off getting into something like iUnits S&P/TSX Capped Energy ETF (XEG-T), and at least you’re balancing your exposure between the good and the bad. Or look for the strongest balance sheets that can at least generate cash flow somewhere in the 30s or 40s. Be very selective.

A well-run company with a good yield of 5.7%. Scores in the top 20% for price momentum. Despite its recent pullback, it is still relatively stable. A relatively low volatility stock. They’ve also been acquiring other Brookfield assets, and will probably continue to do so, giving them some built-in growth. Valuation is the problem. Trading at 30X EBITDA, and carries a fair bit of debt. However, a solid operator. Would have no problem owning this for its stability and yield.

Was short this a couple of years ago based on its high valuation, but has recently covered it. This has poor price momentum. Price momentum matters because it can become a self-fulfilling prophecy. Valuation is still not supportive even at this low price. Trading at 10X cash flow and 46X EBITDA and 28X PE. Despite how much it’s dropped, it has too much debt, and he would question if the 14% yield is sustainable.

(Canada is cheap from a cyclical basis, so his 3 Top Picks are ones that fit that theme and are cheap with good price momentum.) Canada’s largest software company and a leader in management software. A growth through acquisition story. Scores in the top 10% on price momentum. Had a big drop a couple of quarters ago when they warned on earnings, and then went ahead and beat on earnings. They do a very good job of managing growth and earnings expectations. 14% ROE and 20X PE. Dividend yield of 1.68%.

(Canada is cheap from a cyclical basis, so his 3 Top Picks are ones that fit that theme and are cheap with good price momentum.) An oil stock that you can hold and that will survive. Best in class in terms of adding resources. Growing their reserves even in this environment. Trading at 3.3X cash flow and 1.3X BV, and most importantly have no debt. Have cash on their balance sheet and a $200 million line of credit, so have room to grow if oil prices move higher. At around $40 Brent they can actually grow. Trade on a flowing barrel of around 37,000, versus its peers at around 60,000.

(Canada is cheap from a cyclical basis, so his 3 Top Picks are ones that fit that theme and are cheap with good price momentum.) Transports led the market down, however at this point they are starting to lead. He is seeing a divergence between transports and the broad market. This is best in class. Great set of assets. Valuation has always been strong. Scores in the top 20% for low volatility. This is one to hold for the long-term, and will benefit from a cyclical recovery. Dividend yield of 1.96%.

Gold. This rally looks very sustainable. Gold and precious metals in general do very well right through until the prospectors’ convention Mar. 6^th to 9^th this year. That is a typical period of seasonal strength and it looks like we will have continuing follow-through. Just be aware that you will have only 5-6 weeks to go.

Markets. They’ve been brutal since the beginning of January. Earnings on the S&P 500 companies have been down 4% on a year-to-year basis. That’s the bad news. The good news is that we have just completed a volatility spike. Historically, when you get a spike in VIX-N, once it is over it sets the stage for markets to move significantly higher. The TSX Composite since Jan 21 is already up 7%, so we are already starting to move to the upside. Seasonality is positive right through until the beginning of May for both Canada and the US. In the last 2 weeks, markets have been choppy, but have been forming a nice little base. Today we had a very, very strong bounce from some very critical levels technically. So the stage is set for US and Canadian equity markets to significantly go higher until May.

There has been no establishment of a support level yet. Technically it is clearly in a downward trend and trading less then its 20 day moving average as well is underperforming the market. There is no indication that this has stopped going down. There are no signs of support.

Historically US banks bottom right around this time of year. What you want now are the technicals to support that. There are some early signs that this might want to be bottom at around current levels. Has been slightly outperforming the market, which has been going down. Probably slightly higher than its 20 day moving average, and momentum indicators are probably starting to show early signs of bottoming. Probably a good time to be considering this as an interesting seasonal play right through until approximately May.

Normally forest product stocks do very well from the middle of October right through until April of each year. Recently came back to its low of October. Technically it has come back to support which is a good sign. A bounce from these levels implies that you are going to get a test of the previous high, and if you got a breakout above that level, that would be very, very bullish. There is still some time for the seasonal trade. Probably a good Hold at these levels if not a good Buy for a trade into April.