Today, James Telfser commented about whether MTY-T, HNL-T, RME-T, NPI-T, BNS-T, BBD.B-T, CSU-T, GUD-T, VII-T, CLR-T, CAE-T, BDGI-T, BB-T, VSN-T, CJR.B-T, CXI-T, SJ-T, TFII-T, JKPTF-5, ITP-T, WPK-T, TCN-T, SVC-T, DIV-T, PD-T, MAXR-T, ECN-T, BCB-T, IPL-T, HBC-T, AD-T are stocks to buy or sell.
Has been following this name for years, but hasn’t been in it for the last couple of years. He is watching very closely in the $60s. Remember, this is a business that has an incredible amount of human capital and intellectual capital. They make some of the biggest and best satellites in the world. The problem with satellites is that it is a very lumpy business, and they are going through one of those tough periods right now, and it really squeezes the margins. It is probably not a bad time to Buy the stock if you are a long-term investor.
His energy outlook is quite bullish. A lot of the skepticism around OPEC will come to pass, and that is what is really holding back the oil price. Doesn’t think it is unrealistic to see a $60-$65-$70 barrel of oil this year. There is a reason why OPEC wanted to cut production out of left field, as they felt it was really important with non-OPEC members. They want the price to normalize. This is one of the names with more torque. If you think oil prices are going to hit $60-$65, this one is still cheap and has a lot of upside.
Of the 3 royalty businesses, this is the one that he would gravitate to if he were going to invest. It has a nice dividend yield which attracts investors. The one issue with these companies is finding good investments that are going to yield and feed that 10% dividend. In the last year, they have been divesting assets, but they have Mr. Lube as well as another real estate asset, which are good assets. He is on the sidelines until he sees something that they actually do. There are better places to get dividend growth.
(A Top Pick Jan 6/16. Down 15.85%.) One of the more frustrating names in technology that he has looked at. Has always liked what they do and the valuation always seems reasonable. Generates a lot of cash. Has really scaled back his position in this. At the current price, you are building in pretty much all the downside, and not giving them any opportunity for upside. Security is a big thing they are getting into. Thinks there are better days ahead for them.
(A Top Pick Jan 6/16. Up 1.36%.) This is flat, and it really speaks to one of the themes he is seeing in the portfolio. What would be great for them is that they could make some kind of acquisition or get acquired. They’ve got a very highly desired business. No debt. Generates tons of cash. They make packaging for food. A great business.
A great business with a great dividend. They are a bit of a price taker with 3M, which is his only knock against the company. However, they are offsetting that with a lot of operational improvements and some of the new plants they are putting into operation. They’ve made a few acquisitions including a recent one in India.
A great stock, and he is looking at it very, very closely. It ranks really well in his model. He likes that it makes acquisitions that the market isn’t fully appreciative of. Trading at about 12.5X forward expectations. The US transport stocks have really rallied, and some of them are trading at 15-18 times earnings. Feels this has pretty good upside here.
The chart shows this hasn’t really done much over the past year. They’ve missed some expectations, especially in the last quarter. Believes there is some news coming out about railway ties that aren’t selling is much as they used to. However, that should start to pick up again. This could be in for another rocky year or so.
An extremely interesting business. They do a lot of wholesale currency. Now they can get funds cheaper. They can go to the Fed or the central bank to get funds. Getting that kind of volume on currency may allow them to get some bigger clients. Just starting to prove the model out now. If you own, he would continue to Hold until you see the model prove out. He likes the business.
This is in a bit of a decline. Media assets are not exactly thrilling assets to hold right now. There is not a lot of growth. Their dividend is pretty well covered, so it is pretty safe. You are just not going to get the multiple expansion. Think of this as just a dividend payer, and hope that earnings turn around. The dividend yield is going to keep a bit of a floor under the stock, so you don’t really have to worry about that. Hopefully the media cycle can turn around a little. He sees better income opportunities elsewhere. Dividend yield of 8.7% may be a little rich.
Just looking at the numbers, you might think the dividend is not covered and that they have a lot of debt on the balance sheet, but a lot of this has to do with timing. They put a lot of new projects in place. Has a big joint venture with Encana (ECA-T) that is going to come on stream in the next couple of years. Management feels very certain that they are going to sell their US power plant assets, which will create another big cash flow inflow for them. He is not worried about the balance sheet. The dividend is well covered. A very attractive stock to own on the dividend growth side.
One of those “Hail Mary” stocks. You can see where the deep value is in this name and there are a lot of changes going on. Looking at their last quarter and some of the moves they’ve made over the last few quarters, it is definitely encouraging. But you really have to see that translate into numbers. He is still a little skeptical.
Great story and a well-run company. If you think about all the trends that are happening with oil and infrastructure spending, it is hard to say that this company is not going to be pretty active. They definitely have the fundamentals to back them. The problem he has always had is that they always trade at very lofty valuations. Part of that is because of ROC that they make from their truck. He looks around and sees a lot of trucks that are not theirs. They don’t have a high barrier to entry like they used to. Prefers other names, but wouldn’t be too worried given the turnaround, and there is more room for multiple expansion.