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Has done relatively better this year than some of the others. Feels they have less growth potential because they are Canadian domestically oriented. She is more positive on the US economy. The Short interest on the Canadian banks has been relatively high, and that is really coming from American investors that are very negative on the Canadian economy.
(A Top Pick May 12/15. Up 8.04%.) The largest movie operator in Canada. They can’t control the film slate, but it has been very good so far this year. They are very good at driving concession spending which has been growing. In addition to their movie operations, they are going to open up Rec Rooms, entertainment centres offering pool, bowling, upscale dining, etc. Still a buy.
Car companies? She doesn’t own any of the OEMs. They are very cyclical, and as a group tend to trade at single digit multiples. Through the cycles they can lose a lot of money. For the group as a whole, the overhang is that US auto production may have peaked out. If rates start to move up, that is going to hurt auto demand in the US. Her preference would be to buy a high-quality auto parts supplier, who supplies into all of the companies.
The market is questioning their future growth, but their balance sheet is very strong. They have lots of cash. They aren’t going to run into any financial difficulty for a long time. Product innovation seems to be waning a bit. They will be launching a new phone later this year, which may be a catalyst. Their phones are very expensive, so demand is not keying up as quickly. If the markets get shaky, this is a stock that is going to hold.
Share price performance has been disappointing. Had some headwinds in their investment portfolios through their energy exposure. She likes their position in Asia which gives him about 32% of their revenue. It is trading at 1X Price to BV. Longer-term this will have a higher core earnings growth profile. Dividend yield of about 4%.
The whole group has underperformed the market because of overhang on US auto production. This one has had a couple of issues, including the diesel problem with Volkswagen, and they are still in the process of correcting that. Also, had some operational issues in November at 3 of their North American plants. Those operational issues will be resolved. This is on her watch list. Dividend yield of 2.5%.
This has had a nice jump with the recent rally in crude. A well-managed company with good assets and low costs. Longer-term this is a good name to hold. She is not sure she would put money into energy right now, because the sector has done so well on the supply disruptions. If there is strength in the US$ there might be a pullback, and that would be an opportunity.
She had initially bought this because of its exposure to China, which is a very strong secular growth area for fast food and quick serve restaurants. They’ve had some issues with supplier problems and the competitive nature in China. Feels this has largely been resolved. They will be spinning off Yum China. Executing quite well in the US.
