COMMENT

Prefers Union Pacific (UNP-N) in the US, and Canadian Pacific (CP-T) in Canada. There is not much difference between the 2 Canadian rails, but CP is trading a little cheaper. Union Pacific is trading at 16X. The trouble with the Eastern rails is that they are shorter hauls. Efficiencies in rails come with longer hauls. All US rails are beset with coal. Intermodal is where they have tried to grow the business.

COMMENT

Just completed their SAP. You are still seeing pretty rational environment in Canada of square footage growth. The issue with the grocery tillers (?) has been the West, and this company is very well positioned with a discount banner out west. They also have Shoppers which is doing a great job. Integration will continue to do better than what is forecasted.

COMMENT

A US dollar store? This one is coming into Canada, especially out West. He likes the sector. They did the Family Dollar acquisition, and are digesting that right now. There will be lots of synergies coming out of that. Opening 900 stores this year and 1000 next year and have 15,000 stores, so there is lots of opportunity for growth. Has a $92 target price.

COMMENT

The sales of cell phones obviously starting to decline. You have to look at this company in 2 year increments. Definitely the replacement demand is there for the next generation. The next iteration, iPhone 7, is not expected to be all that spectacular. It’s when we get to the next generation, when they have these OLED devices, flexible plastic. Likes the name and feels it is trading very, very cheaply, and still has high single digit growth.

BUY

He likes this. Trading at 3 or 4 times earnings. Load factors are good. They are controlling their revenue per available seat mile and are driving down their costs. Also, taking advantage of their international routes. Feels the stock is stupidly cheap.

TOP PICK

Has strong growth and is monetizing it through ad spending, and is obviously going more digital. They also have their other bets, such as curing aging through Calico. They are getting into the public cloud as well. Also, has 70% market share of Core Search. Growing at 20%. He has a $1000 target on this.

N/A

Market. Earnings season has just wrapped up and the earnings recession continues. There was a 7% blended earnings decline, for the 4th consecutive quarter. This hasn’t been seen since Q4 of 2008, so he feels growth continues to be anaemic. 2016 started off pretty rough. Now that there is some stability in China and in oil prices, the market is reflecting that. Expects we will continue seeing volatility over the summer. He went to 25% cash in the 1st week of January, and started to put some of that back to work over the last few months. Currently has 15% in cash and is looking for some attractive entry points.

N/A

Energy. There might be a pullback before there is a firm price on oil. Markets and commodities do not go in one direction. Given that we have had quite a bit of good news with oil in the last 4-6 weeks, it is just a matter of time before some bad news starts to creep back in. The good news is that we have consensus that we have reached a bottom in oil prices, but he wouldn’t translate that as stability in the share prices of oil companies.

BUY

Until recently this has been a pretty tough ride with the concerns around “pick and play” that have surrounded these media type names. This has had a nice turn around and is up about 20% year to date. Part of that is because of the acquisition of the Shaw (SJR.B-T) assets. The restructuring over the last 12 months has provided them with some focus on where the business is going to be moving forward. This has close to 5 of the top 5 kids channels. With the acquisition, their other business line is going to have some of the top channels as well. These are going to be 2 areas that are less disrupted.

COMMENT

This is really an umbrella of other businesses. Feels the 5.5% dividend is safe. There are multiple revenue streams, so not only is the dividend safe, but there is some potential for modest dividend growth. This is what has been attracting some of the capital into the name. He is skeptical on where future growth is going to come from. McKenzie is in this umbrella, and mutual funds are going to be under a lot of pressure with the CRM tool that is rolling out, which will allow retail investors to fully understand what they are paying in fees. For share price appreciation, there are probably better places.

PARTIAL BUY

This has been on fire, up over 40% in the last year. When looking at the sector as a whole, the names that have a large percentage of the revenue coming from North America has really been focused on increasing their awareness and product line-up in terms of healthier foods. This company has done that well. Made some acquisitions and are focusing more on the organic side of things. 75% of their revenues come from the US. He wouldn’t be opposed to buying this, but because of the run it has had you might consider buying a half position and adding more on weakness.

BUY

Acquiring Manitoba Telecom (MBT-T), and will essentially give BCE 500,000 new subscribers if the deal goes through. The “average revenue per user” is considerably lower than the one for BCE. Once those clients come online, with the wider variety of products and services BCE has, the revenue per user can go up as well. 4.5% dividend yield.

SELL

Generates 50% or so of revenue from OEM GPS units in Chrysler and Jeep. Have been spending a lot of money on innovation. That is a good thing if the innovation works, but is a bit of a wildcard. A lot of the innovations they are coming out with are wrist wear type of devices, but a lot of that can be done with your smart phone. 5% dividend yield.

PAST TOP PICK

(A Top Pick June 5/15. Down 29.24%.) Thinks people are really starting to get worried about innovations. Feels they are going through a transition from being an emerging company, aggressive innovation that continues to grab market share. That strategy is now saturated. Pretty much everyone that wants an iPhone has one. We need to look at this more as a mature company. If they paid 3.5%-4% in the form of a dividend, the street would probably be more patient with them.

PAST TOP PICK

(A Top Pick June 5/15.) At that time he had about a 15%-20% weighting.