Latest Stock Buy or Sell? Make More Informed Decisions!

A value investor’s dream and nightmare at the same time. If it broke up and distributed all assets, you would get $42 a share. Everybody thinks Investors Group is no good, mutual fund fees are too high, etc., etc. That may be true, but at the end of the day, he doesn’t believe management are dummies. Thinks they are going to make some smart deals with the cash flow coming up. Perhaps they will diversify and reduce their exposure to mutual funds. Trading at a deep discount to breakup value, and you are getting a nice dividend, plus the exposure to Great West Life (GWO-T), which hopefully will turn around.

The road ahead is uncertain. This is a disaster to say the least. We don’t know what is going to happen, but thinks that the issues are fixable. They are trying to transform their business into a low-cost provider of food. Sales aren’t that bad, and that will continue until Alberta turns around.

Will the Donald Trump presidency significantly impact?He assumes some of the policies, perhaps deregulation, will assist. Definitely the rising US interest rates will help. This is a wonderful bank and they are terrific operators. Their balance sheet is primed and ready to make another acquisition. He expects pretty good years going forward for all Canadian banks. Everybody now loves them, so you shouldn’t be running out buying them at the moment. Wait for a pullback.

(A Top Pick Jan 28/16. Up 43%.) They’ve been very active in 2016. Have been buying toll roads, cell towers, as well as cell towers in Brazil. There was an 11% distribution increase in 2016, and probably should expect more in 2017. Pretty much the only infrastructure company you can buy in Canada, with such diversified assets. Not cheap, but there is a moat around that kind of business. The scarcity value of the assets make it attractive. He would look to buy this on pullbacks.

(A Top Pick Jan 28/16. Up 9.26%.) Looks like 2016 movies are going to be on par with those of 2015, and it looks like 2017 is going to be even better. He likes their capital allocation. They are diversifying out of movies. They’ve now got the Rec Room, digital signage, videogame competition, and are now one of the biggest providers of gaming units for other companies.

(A Top Pick Jan 28/16. Up 14.7%.) Had felt the selloff last year was too dramatic. People had worried about what was going to happen in the Western economy. You are going to get an 8%-10% dividend yield over the next few years. Still reasonably valued.

A few months ago, every analyst came out and said this company was finished. That was followed by a good quarter where they gave very nice guidance going forward, and that ESPN was not a problem. Now everybody likes the stock again. One of the most fabulously run companies. They have wonderful assets and are very smart guys. Bob Iger will probably retire next year, which will create some problems. You aren’t paying very much for the stock. The company has to make some smart acquisitions going forward to make sure that it is on the right side of the media trend.

You probably shown own anything with a Brookfield name. The team at Brookfield are such shrewd operators. This one is an interesting collection of assets. Construction, private equity, etc. Very hard to analyse. There is an incentive play on this stock. If the stock stays above $25 a share, the Brookfield asset management team collects a higher incentive fee, so he thinks this is incentivized properly to get the stock price higher.

This didn’t do anything until it looked like they were going to make an acquisition to assimilate Miller Coors, so now it is a huge company. Wonderful brand. The problem is, beer is not a sexy growth business anymore, so the company is going to be a cost cutter, and hopefully they will be out to get a lot of synergies with their new acquisition. It’s expensive here, and generating a ton of free cash flow. He expects them to reduce debt in the next 1-2 years, and then be in a position to increase dividends or make more acquisitions. There is a 25% chance in the next few years that it gets acquired by Heineken. The stock is worth $125 at least, and maybe $150 if they get the cash synergies proper.

Still buying this for clients. The acquisition of Visa Europe was a brilliant acquisition. Their North American margins are 60% and Europeans are 30%, and are not going to stay at 30% for long. Visa is going to improve those margins, and you are going to see a robust earnings growth. The runway is just massive for them. People are still using cash, and we are heading towards a cashless society. Not cheap, but it is never going to be cheap.

A wonderful shareholder friendly company. Always increasing the dividend and always buying back stock. They think about smart capital allocation before making an acquisition. There is a wonderful big runway of growth for them. Not cheap, but good stocks are never cheap.

He is all over the healthcare sector right now. They remind him of the US financials 2-3 years ago. Everybody hated them, too much regulation, etc., etc. It might get worse before it gets better. If you have a 2 to 4 year timeframe, it is now time to look at a number of healthcare names. He likes this one as well as Express Scripts (ESRX-Q), Zimmer Biomet (ZBH-N), etc. Very cheap valuation.

H&R Reit (HR.UN-T) or Canadian Apartment Properties (CAR.UN-T)?On REITs, it is not the front-page story that kills you, but the story you don’t know that kills you. Everybody knows interest rates are probably going to go up, which may already be priced into some. A lot of them benefit from rising interest rates because it means the economy is improving. These are 2 of the best along with RioCan (REI.UN-T). These are great investments, but are not his best investment idea. If he had a list of 30 stocks, 29 and 30 would be a REIT. You don’t get a lot of dividend increases or capital appreciation. You own them for the income. A younger person’s portfolio should not have a REIT.

H&R Reit (HR.UN-T) or Canadian Apartment Properties (CAR.UN-T)?On REITs, it is not the front-page story that kills you, but the story you don’t know that kills you. Everybody knows interest rates are probably going to go up, which may already be priced into some. A lot of them benefit from rising interest rates because it means the economy is improving. These are 2 of the best along with RioCan (REI.UN-T). These are great investments, but are not his best investment idea. If he had a list of 30 stocks, 29 and 30 would be a REIT. You don’t get a lot of dividend increases or capital appreciation. You own them for the income. A younger person’s portfolio should not have a REIT.

Interest rates may already be priced into this. We know that at some time rates are going to go up and make utilities and REITs less attractive. At the end of the day however, this has a lot of growth projects in the hopper. Also, don’t forget, this is a regulated utility. As bond rates rise, they are allowed to go back to the regulated board and ask for higher returns on capital, which means they can increase their pricing. Feels the best years are behind this company, but you probably can still earn an outsized return owning this, versus a bond, cash or preferred shares. He would definitely hold this or buy on dips.