Latest Expert Opinions

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PAST TOP PICK
PAST TOP PICK
May 13, 2016

(A Top Pick June 5/15. Up 37.16%.) There was a lot of pessimism priced into this company, and they have had a few things go their way. The main one is Steve Eastbrook who took over the business, and understands that the company needs to have a clear identity, as opposed to just being a generalist. Don’t expect the same upside. Pays a great dividend. Has a low beta.

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McDonalds (MCD-N)
May 13, 2016

(A Top Pick June 5/15. Up 37.16%.) There was a lot of pessimism priced into this company, and they have had a few things go their way. The main one is Steve Eastbrook who took over the business, and understands that the company needs to have a clear identity, as opposed to just being a generalist. Don’t expect the same upside. Pays a great dividend. Has a low beta.

SELL
SELL
May 13, 2016

Sell or hold? This has been a tough one, and every quarter there are so many reasons that the shares should go up, and they just haven’t. They moved their business to becoming more focused on wealth management, which provides reoccurring revenues. Did a great acquisition of Standard Life and picked up instant clients that they could sell more cross products to. Also, have been able to penetrate in China where 30% of revenues come from now. Look at your portfolio and see what weighting you have in financials. If you are not overweight, that money would be better served in other financials such as Canadian banks.

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Sell or hold? This has been a tough one, and every quarter there are so many reasons that the shares should go up, and they just haven’t. They moved their business to becoming more focused on wealth management, which provides reoccurring revenues. Did a great acquisition of Standard Life and picked up instant clients that they could sell more cross products to. Also, have been able to penetrate in China where 30% of revenues come from now. Look at your portfolio and see what weighting you have in financials. If you are not overweight, that money would be better served in other financials such as Canadian banks.

COMMENT
COMMENT
May 13, 2016

Many retailers suffer, but overall some of them are actually doing well. If there was too much optimism priced in, or a lack of recognition of how much online was going to take from their business, that is when the stock really gets hammered. This has economy of scale with over 11,000 stores. Part of the challenge is that they operate with very thin margins, which doesn’t leave much of a buffer to cut prices when they start to sit on inventory. To combat online shopping, they are using price matching. Also, getting into the organic space in groceries. He wouldn’t be in a rush to buy this, because it is still unclear how the disruption in the retail space is going to take place.

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Walmart Inc (WMT-N)
May 13, 2016

Many retailers suffer, but overall some of them are actually doing well. If there was too much optimism priced in, or a lack of recognition of how much online was going to take from their business, that is when the stock really gets hammered. This has economy of scale with over 11,000 stores. Part of the challenge is that they operate with very thin margins, which doesn’t leave much of a buffer to cut prices when they start to sit on inventory. To combat online shopping, they are using price matching. Also, getting into the organic space in groceries. He wouldn’t be in a rush to buy this, because it is still unclear how the disruption in the retail space is going to take place.

BUY
BUY
May 13, 2016

He likes the company and is looking for an entry point. There is some sort of stability or base building at these prices. Have executed on what they said they were going to do in getting rid of their financial assets, which means they can give up their FDIC insurance which required them to hold back capital. Great dividend.

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He likes the company and is looking for an entry point. There is some sort of stability or base building at these prices. Have executed on what they said they were going to do in getting rid of their financial assets, which means they can give up their FDIC insurance which required them to hold back capital. Great dividend.

DON'T BUY
DON'T BUY
May 13, 2016

Concerned about their ability to sustain their dividend. When they cut it earlier in the year, that was the time to do a proper cleanup and cut more than what they did. It is not going to be well received if they have to cut it again. Looking at their CapX spend and the rate at which they are paying out cash flows on the dividend, it is not a very compelling ratio. Doesn’t believe there is going to be a significant improvement in the space overall. A strong US$ is going to continue putting pressure on the company. Also, China is sitting on stockpiles of potash.

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Concerned about their ability to sustain their dividend. When they cut it earlier in the year, that was the time to do a proper cleanup and cut more than what they did. It is not going to be well received if they have to cut it again. Looking at their CapX spend and the rate at which they are paying out cash flows on the dividend, it is not a very compelling ratio. Doesn’t believe there is going to be a significant improvement in the space overall. A strong US$ is going to continue putting pressure on the company. Also, China is sitting on stockpiles of potash.

DON'T BUY
DON'T BUY
May 13, 2016

Has done better than some of the other big money centred banks in the US. He is fairly cautious on the big banks in the US. Doesn’t think all the bad news is priced in. This bank missed expectations in Q1 by about 5% year-over-year. A big part of that was growth in the loan loss provisions because of oil and gas. Prefers regional banks such as Columbia Banking System (COLB-Q) and City Holding (CHCO-Q).

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Wells Fargo (WFC-N)
May 13, 2016

Has done better than some of the other big money centred banks in the US. He is fairly cautious on the big banks in the US. Doesn’t think all the bad news is priced in. This bank missed expectations in Q1 by about 5% year-over-year. A big part of that was growth in the loan loss provisions because of oil and gas. Prefers regional banks such as Columbia Banking System (COLB-Q) and City Holding (CHCO-Q).

COMMENT
COMMENT
May 13, 2016

Held this until recently, but sold earlier this month because he had been overweight in the utility space and wanted to take some profit. He owns Emera (EMA-T) which owns 25% of Algonquin. They recently did a large acquisition, and already had quite a bit of debt, so that added to their debt load. Because of this, their ability to raise their dividend is going to be somewhat impaired in the coming months and years. Thinks the dividend is safe.

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Held this until recently, but sold earlier this month because he had been overweight in the utility space and wanted to take some profit. He owns Emera (EMA-T) which owns 25% of Algonquin. They recently did a large acquisition, and already had quite a bit of debt, so that added to their debt load. Because of this, their ability to raise their dividend is going to be somewhat impaired in the coming months and years. Thinks the dividend is safe.