N/A

If you are not 100% certain that one of two stocks in a sector is better than the other then get half of both positions and think of them as one position. After a couple of months you may realize that the behavior of the two stocks are different. One may have more catalysts or is recognized more and then you may decide to go with the winner from there.

COMMENT

Chip Maker. You need to look at it as the inputs to secular growth trends like virtual reality, drones, and many others. You need to be careful of international trade policy revisions. You may prefer Intel as safer and get a half position in that as well.

BUY

He thinks it will get the same benefit as gold. It looks like it is finding a support level on the chart and it is probably not a bad opportunity to step in at that support level. It will be more of an inflation protection than anything else.

WATCH

He believes it will be headed upward because of the commodity and production growth. But there may be some more near term downside, based on technicals. You are going to see this move to a higher price point, but short term there will be some volatility.

DON'T BUY

A great company and a great business. They purchase in US$ for most of their inputs even though they are Canadian. Their input costs should be rising, but they should be able to pass that through into their end prices.

BUY

He was looking at this one as a potential, but he missed the opportunities when it traded off a bit. They are one of the biggest bus manufacturers for municipal transport. A lot of it will hinge on municipality budgets and spending on public transit. They are going to be susceptible to the timings on when approvals are granted. The trends are not broken, however.

TOP PICK

He sees more upside. There are several reasons to like it. The chart is scary. He is recommending it here. It stands to benefit after being handcuffed for nearly 10 years. They have gone the extra mile to streamline their product line up and reduce costs. They are going to benefit from being a more streamlined operator. They will get the tail wind of higher interest rates. (Analysts’ Target: $23.81).

TOP PICK

Exploration and production light oil production. They plan to increase from 45k to 55k barrels per day production by the end of this year. He likes that the balance sheet has room on it and they carry less debt than peers. They stand to benefit from a rising commodity. (Analysts’ Target; $14.80).

TOP PICK

They are a junior version of a BAM.A-T. They have a hot opportunity in the form of single family properties in the US sun belt. There are secular growth trail winds in single family rental homes. (Analysts’ Target: $12.56).

N/A

Market. The VIX is still at record lows, so he thinks the current market condition is just a little bit of steam coming off. He’s been getting much more aggressive in his portfolios, and his cash standing is virtually at zero now. Was starting to see positive data on corporate profit, S&P 500 earnings and PMI data before Trump won the election, and it was nice to see that cloud of uncertainty removed. Fully expects some volatility around the inauguration, but is staying Long throughout that.

COMMENT

Royalty plays. Great dividend yields, but doesn’t see a lot of reason to get constructive on these names. Sees better opportunity on dividend growth elsewhere.

DON'T BUY

This hasn’t been able to get anything going. Valuation looked compelling, but it turned out to be a bit of a value trap. They have fantastic real estate, but if retail sales are going into a secular decline, which seems to be happening because of Amazon (AMZN-Q), what is the real estate actually worth. They’ve loaded up their balance sheet with debt. They have attractive assets, but at what price can they sell those assets at. Wait for a bit of a turnaround or a catalyst.

COMMENT

Do pipelines get hit if interest rates go up? We now have a scenario where oil prices are rising and there is an issue with infrastructure in Canada and the US. Thinks pipelines are a good investment for a dividend portfolio. Prefers Enbridge (ENB-T), and has recently done a lot of work on Veresen (VSN-T) which offers a much higher dividend yield and are involved in some great projects which will come on stream in the next few quarters. IPL might do fine. You might lose some flows from interest rates. Also if oil does start to rally towards $60 flows might come out of the pipelines and into the ENPs. If looking for a nice dividend in something steady, this would fit that portfolio.

HOLD

No longer just a soda manufacturer. They’ve gotten heavy into the coffee and water delivery business around offices, homes and shops. A high free cash flow business, and they’ve been able to roll up that sector, both in Canada and Europe, on very, very cheap multiples. They’ve put a lot of debt on the balance sheet. While they are generating a lot of free cash flow, it seems the narrative has changed over the last few months. Part of it has to do with the British pound decline. There is a question as to how long they are going to be able to service their debt properly and how long will it take. Sold his holdings, but may look to enter again once they de-lever the business a little.

COMMENT

A recent spinoff from Element Financial. The stock has had a hard time getting anything going. However, the valuation of the business looks compelling and is something he is watching. It should improve if you believe in his thesis that the economy is improving in the US. This is a name that should do well in that environment. He is a bit cautious on this, but is following it.