COMMENT

He used to be a “Long” shareholder and lost money. Eventually got fed up with management and got out of the stock.

COMMENT

Has a long term Short on this. Looking back to the last downturn in 2008-2009, it took 17 quarters for them to get back to pre-recession provisioning levels. The current downturn in Alberta has been a lot longer and more protracted, so thinks the time horizon for provisions will probably be even longer than 17 quarters and doesn’t think the street is factoring that in.

TOP PICK

Going to be reporting in March. There are so few listed toy companies globally. It is not inconceivable that this company gets taken out by one of the bigger players. (Analysts’ price target is $37.86.)

TOP PICK

*Short* A very crowded short, and he generally doesn’t like to participate in crowded trades, but makes an exception in this case. There are a lot of Shorts on this, because the US hedge funds use it as a proxy for the Canadian housing market. His view is actually quite neutral on the Canadian housing market. There is a lot of runoff in their portfolio, so just to stand still they have to get at least 14% growth in terms of their number of mortgages. This is because banks have gotten smarter at catering to new immigrants to Canada. Dividend yield of 3.91%. (Analysts’ price target is $29.73.)

TOP PICK

*Long* A pairs trade with Cineplex (CGX-T). This is about twice the size of Cineplex in terms of their screens.

TOP PICK

*Short* A pairs trade with Cinemark (CNK-N). This is trading at twice the valuation of Cinemark.

N/A

Market. Looking back over the past 15 years or so, last year was the 2nd year since 2002 that we have had negative returns in healthcare. The other was in 2008, but it was the best performing sector. There is a lot of noise around the politics in the US about the affordable care act. His view is that the election was a critical pivot point. Given where valuations are right now, if you have a longer-term perspective, the fundamentals for the sector are intact over the medium term. The healthcare sector currently is very inexpensive. The forward multiple on the S&P Healthcare is 2.5 multiples below the market. We haven’t seen that in the past 15 years. That means that the price you are paying for the earnings for the companies is significantly below where it has been, compared to the market over the past 15 years.

COMMENT

If looking to be exposed to all the positive attributes about global healthcare, this is not a company he would be focusing on.

DON'T BUY

Wouldn’t be a buyer of this today. He expects generic drug prices today would be on a downward trend. He still sees 5%-8% growth in branded drugs. The current trend for generic drugs is -9%. He is going to stand on the sidelines until he sees where generic prices level out.

COMMENT

One of the top 3 distributors of drugs in the US. A very high volume, low margin business. They indicated they were transitioning into the retail side by acquiring 2200 retail pharmacies in Europe as well as IDA in Canada. They are exposed to the generic drug pricing, so he opted to stand on the sidelines.

COMMENT

This is the company that found the cure for hepatitis C. It has been a very challenging stock to own, and very much a value trap for the past couple of years. They are seeing price pressures and competition from many competitors over the next year on hepatitis C. They have cut their guidance sufficiently that they can meet it. A great balance sheet and are buying back tons of stock. An OK dividend. Thinks they have some hidden assets in their Nash portfolio and expects to see some results towards the end of the year. He uses covered call strategies to help generate some extra income.

COMMENT

Likes the valuation. Trading at around 13X next year’s earnings. This has a history from 2010 to 2015, subject to a big patent cliff, where they had significant declines in revenues. They’ve filled out their pipeline. Has 140 drugs that are over $100 million in revenues. 8 are blockbusters with over $1 billion in revenues. Likes the valuation and the yield.

COMMENT

This is sitting at around 17.5X forward earnings. The St. Jude acquisition was a big one for them. It expanded their balance sheet. They still have the Alere acquisition overhang. Have some things to chew through this year in order to get the multiple expansion up to something like 21X, where its direct competitors would trade at. If a longer-term holder, you do have some upside on this.

PAST TOP PICK

(A Top Pick June 22/16. Up 17.47%.) He knew we were coming into some volatile times back in June, and this is one of the dominant biotech companies. Really likes their PCSK9 cholesterol drug, which is going to be a blockbuster.

PAST TOP PICK

(A Top Pick June 22/16. Up 16.19%.) The one thing he liked about this was the diversified pipeline, but really it was their immuno oncology drug that has been the front runner.