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Has done a great job taking a huge market share away, from Sears in particular. It got to the $34-$35 range which was a little ahead of itself. Dips provide an opportunity. In Canada, there aren’t many choices in consumer that have the growth, but this is one of them. He has a Top Pick which is his choice. The company is well-managed and a good Hold here. Because of the multiple, you don’t get multiple expansion, you only get earnings growth. However, you could probably make 10%-20% profit on this. Dividend yield of just over 2%.
Just closed their US acquisition, which had been expected. There are instalments receipts that are going to get exercised, which is probably going to create some churn in the stock for the next month or so. This has a good dividend with a lot of growth from the US side. It has been hurt because it has been perceived as a utility play, which are now out of favour. If you are going to buy something in this group, you have to buy growth, and this has the best 12-month growth in the group.
This is at the bottom of the group, and it is a bit of an anomaly in that it is 50% US retail banking. In theory, if Bank of America is up 30%, shouldn’t this one be up 15% since the election? It is not. Thinks they are going to have better margins on the US side this year. They are going to be a big beneficiary of higher rates. Dividend yield of 3.3%. (Analysts’ price target is $66.84.)
This is off its highs. The group is a bit out of favour. It is growth by acquisition, and they are really, really good at it. If you calendarize their earnings, you get a 15.5 multiple, which is the cheapest it has been in almost a decade. It still has good growth coming from its European and US acquisitions. You don’t buy this for yield, it is a growth story. Thinks it will get into the low $70s, which will still give you 15%-20%. Dividend yield of 0.59%. (Analysts’ price target is $78.36.)
One of the very low cost gas producers. Gas is very swingy, and is down a fair bit today, and the stock is down which is a really good opportunity. Trading at 8X Cash Flow and has a really good balance sheet with less than 1X debt to cash flow. Under $9 is a great entry point. (Analysts’ price target is $11.86.)
This has the double whammy that it is consumer, which is out of favour a little, but this came down too much, and it is also basically a yield play. Over time, it has done relatively well, but there has been some profit taking. It has a near monopoly up north where its stores are. Not a big growth company, but you can get the yield plus a little over.
He is lukewarm on this as he has others that have better growth, however there is nothing wrong with this one. You own it for the dividend and you get a little bit of growth. It has a utility side to it as well as a power side. He is lukewarm because of a lack of strong growth. His favourite in the group right now, would be TransCanada (TRP-T). Dividend yield of 6.2%.
This is his largest energy holding. An oily play in Western Canada. Conservative management and excellent balance sheet. All the things you want if you think it is an uncertain world in oil. Yield of almost 5%. A nice place to have some yield as well as some oily exposure. A good safety play with some oil aspects to it.
This looks statistically cheap, but it looks like a value trap. The real estate alone is $25 a share, and yet this trades at $13. The market is essentially saying that the retail side will never make any money and is in fact a negative, and it is unwilling to detach the real estate from the retail. At $13, management will probably not let it linger here, but will probably do something, possibly splitting out some of the real estate.
Agrium (AGU-T) & Potash (POT-T)? If you hold these already, they are probably good holds. Sold this one about 18 months ago, so doesn’t own either. Had thought the outlook for the fertilizer side was going to be a little bit weak, so going into a weak cycle for a couple of years they’ll have a tough time. He had always liked the retail side on Agrium, but that is now going to be diluted down. He would consider this a Hold from here.
Agrium (AGU-T) & Potash (POT-T)? If you hold these already, they are probably good holds. He doesn’t own either. Had thought the outlook for fertilizer was going to be a little weak, so going into a weak cycle for a couple of years they’ll have a tough time. Had always liked the retail side on Agrium, but that is now going to be diluted. He would consider this a Hold from here.
He prefers Hudbay Minerals (HBM-T). Sherritt is nickel, which is finally perking up for the 1st time in quite a while. Their Madagascar mine has a cost of about $4.40. Nickel got over $5 recently, and this spent a lot of time below its breakeven point for quite a while. They have extended their bonds out 5 years, and have done a deal where they no longer fund their 40% of Ambitovy mine, they are only funding 12%, so the balance sheet looks okay. If you believe in the whole economy growing because the US is fiscal stimulating and these prices go higher, he still finds Hudbay safer with a better balance sheet with better zinc prices and a better copper price, and it could go to $10.
(A Top Pick Jan 4/16. Up 41.69%.) In 2015, this was the worst performer, the dog. Often, the ones that have outperformed, if they fix whatever the reason might be, which they usually do in Canadian banks, you can do well. It really had been lagging because the International side had been lagging.
