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When the economy gets fragile, one of the 1st things to go is the valuation on airline stocks. The oil price and the low Cdn$ have been really hard on airlines. However, this is a regional and feeder airline for Air Canada (AC-T), so it is going to be insulated from some of those things. His last research on this indicated that the 7.6% dividend was pretty safe. You are probably okay, barring a major downturn in the economy.
Likes turnaround stories. An old business and has been around for 40 years, therefore you have lots of annual financial statements to look at to get comfortable as to where this company can go. An engineering and architecture company, specializing in urbanization, construction, transit lines. Urban economies grow a lot faster than national economies. He likes that they have a lot of debt, because in a turnaround, if you get it right, you get a lot more leverage on the stock price. Also, likes to see signs of a turnaround plan getting traction, and this is in this stock. Thinks that in a couple of years this will be an $8-$9 stock..
Always likes to own some gold because something always goes wrong in the world, and gold goes up. This has a $250 million market cap and is not a producer. A little riskier, but they have an outstanding deposit in Nevada with ability to improve the deposit. You have to think there is a bidding war coming for this asset, because there are 2 producers who are already in there. They have tons of cash and there are some major investors in this. Thinks this will be gone next year.
He is not comfortable with the stock market. Valuations are high in spite of all the selloff. Seems that there are more and more negative interest rates. When rates are negative, that money has to go somewhere, and it is going to go into stocks. That tells him that even though they are expensive, they can get more so. He is 70% cash right now.
