Today, Douglas Kee commented about whether RCI.B-T, TD-T, NPI-T, CCO-T, LIF-T, AEM-T, BAM.A-T, POW-T, PEY-T, ARX-T, DH-T, RECP-T, ARE-T, MFC-T, L-T, AQN-T, RY-T, ENB-T, CVE-T, MG-T, CPG-T, MSI-T, SLF-T, TECK.B-T, BNS-T, MFI-T, NFI-T, CHR-T, HBC-T are stocks to buy or sell.
About half the banks’ revenues and businesses are retail in Canada, which is a cash cow. This bank’s strategy is international retail in Mexico, South America, etc. International retail is a higher margin business than domestic retail, but it is also more volatile. This is a core holding for him. (See Top Picks.)
He doesn’t own this, because it is a commodities/materials stock, and he would rather own energy in his economically sensitive sectors. This is a survivor, and is leveraged to coal, and then zinc and copper. They definitely came through the last 2 years, selling off some assets, and repairing their balance sheets. If you believe we are going to get an inflationary environment over the next couple of years, $27-$28 is a reasonable buy.
As a consulting business, this company is all about assets, which are the people. There is not a lot of capital need in the business. Their cash flow covers the dividend and whatever they need to spend on R&D, etc. They are not going to grow a whole lot, but are pretty good about turning out cash flow. The 4.08% dividend is safe.
This had been hurt. It was poking its head up and was starting to outperform, and then they did an equity issue which hurt them again. He cut his position in half last year. Expects the dividend will come back. As the year goes on, if oil prices stay at the $45-$55 area, the company does a good job at finding oil and bring it on cost effectively. He is going to continue to Hold. It will probably yield between 3% and 4% in dividends.
(A Top Pick Oct 8/15. Down 6.95%.) During this last year, it actually reached $14.50, so it has had a nice recovery. This outperformed when oil companies were getting creamed, because it had the best balance sheet. The attraction is that they have good growth coming. They expand their SAGD operations in the oil sands in chunks, so he believes they have 2, maybe 3 50,000 barrel chunks they can do over the next 3 years or so.
Has a very small position in this. A well-managed company. The Shoppers acquisition is going along very well. Typically, these food retail companies do very well when inflation is going up, so if we get a rise in inflation in the next couple of years, it will be good for them. However, money is coming out of consumer stocks and going into the more commodity oriented stocks.
In the short term, they are going to do well because of their wealth management business and rising interest rates. Longer-term, the money coming out of the life insurance side, the cash flow, is being reinvested into life insurance businesses in Asia, which is the only growth market in life insurance that there is. He will be buying this for new clients.