Latest Expert Opinions

Signal
Opinion
Expert
COMMENT
COMMENT
March 15, 2017

This has made a number of transformative deals, with Tim Hortons being the major one. Their strength is in cost cutting, and they’ve done a very good job managing that. There has been a little controversy lately of how far they go on costs. Not a cheap stock. Has a healthy amount of leverage. There are some well known catalysts including refinancing, a very expensive pref instrument, which will drive earnings growth and accelerate it heading into 2018. He likes this and would own more if it was cheaper.

This has made a number of transformative deals, with Tim Hortons being the major one. Their strength is in cost cutting, and they’ve done a very good job managing that. There has been a little controversy lately of how far they go on costs. Not a cheap stock. Has a healthy amount of leverage. There are some well known catalysts including refinancing, a very expensive pref instrument, which will drive earnings growth and accelerate it heading into 2018. He likes this and would own more if it was cheaper.

Stephen Groff
Principal & Portfolio Manager, Cambridge Global Asset Management
Price
$73.050
Owned
Yes
COMMENT
COMMENT
March 15, 2017

An outstanding business model. It is e-commerce resilient. The unit economics are very, very strong. A very durable moat type business. They make a ton of money on membership fees, and are about to increase them in July, which will be a nice earnings tailwind. However, it always comes back to what you want to pay for it. He is waiting for a better entry point. Dividend yield of about 1.1%.

An outstanding business model. It is e-commerce resilient. The unit economics are very, very strong. A very durable moat type business. They make a ton of money on membership fees, and are about to increase them in July, which will be a nice earnings tailwind. However, it always comes back to what you want to pay for it. He is waiting for a better entry point. Dividend yield of about 1.1%.

Stephen Groff
Principal & Portfolio Manager, Cambridge Global Asset Management
Price
$166.540
Owned
No
WEAK BUY
WEAK BUY
March 15, 2017

2016 was a tough year, and 2017 is a continuation of that. Railroad ties and utility poles. A business with a natural barrier, because they are heavy and can’t be transported too far. Also, they need a license to produce ties because of the type of wood preservative used. Railroad ties wear out over time based on age, train weight and how many times a train goes over that tie. In the latter part of 2016, there was some pressure as Class1 pulled back and effectively de-stocked a little which created pressure. Also, wood pricing moved, so that they knew pricing was going to come down, and there was a cost mismatch between inventory and what they could sell for. The back half of 2017 is going to get better. Not a bargain, but a reasonably fair price if you’ve got a 2-year time horizon.

2016 was a tough year, and 2017 is a continuation of that. Railroad ties and utility poles. A business with a natural barrier, because they are heavy and can’t be transported too far. Also, they need a license to produce ties because of the type of wood preservative used. Railroad ties wear out over time based on age, train weight and how many times a train goes over that tie. In the latter part of 2016, there was some pressure as Class1 pulled back and effectively de-stocked a little which created pressure. Also, wood pricing moved, so that they knew pricing was going to come down, and there was a cost mismatch between inventory and what they could sell for. The back half of 2017 is going to get better. Not a bargain, but a reasonably fair price if you’ve got a 2-year time horizon.

Stephen Groff
Principal & Portfolio Manager, Cambridge Global Asset Management
Price
$42.200
Owned
Yes
BUY WEAKNESS
BUY WEAKNESS
March 15, 2017

This is a powerhouse. A well-run company with significant management ownership via Woodbridge. He has a lot of respect for the team. Not a cheap stock. Free cash flow this tear will be a bit lower, primarily due to one-time items. He looks 2-3 years out and the amount of free cash flow they can generate. The free cash flow yield is fair, not great. It gets out to about 6.5%-7% a little farther out. This gives you a healthy dividend and modest share repurchases. They are very good at allocating capital. He would own more at a lower price. A lower risk/high quality business.

This is a powerhouse. A well-run company with significant management ownership via Woodbridge. He has a lot of respect for the team. Not a cheap stock. Free cash flow this tear will be a bit lower, primarily due to one-time items. He looks 2-3 years out and the amount of free cash flow they can generate. The free cash flow yield is fair, not great. It gets out to about 6.5%-7% a little farther out. This gives you a healthy dividend and modest share repurchases. They are very good at allocating capital. He would own more at a lower price. A lower risk/high quality business.

Stephen Groff
Principal & Portfolio Manager, Cambridge Global Asset Management
Price
$58.160
Owned
Yes
COMMENT
COMMENT
March 15, 2017

Hasn’t followed this closely. Make sure you understand the cyclicality. They have the water business and the oil sands business. The business is very much tied to CapX, and you have to really understand those cycles.

Hasn’t followed this closely. Make sure you understand the cyclicality. They have the water business and the oil sands business. The business is very much tied to CapX, and you have to really understand those cycles.

Stephen Groff
Principal & Portfolio Manager, Cambridge Global Asset Management
Price
$13.460
Owned
No
COMMENT
COMMENT
March 15, 2017

Doesn’t own any Canadian bank. Every stock he owns has to be attractive on an absolute basis. If there were incredibly low values on the banks, he would be interested. Looking at them today, he does not think their price is at a point where he has a positive enough risk/return skew.

Doesn’t own any Canadian bank. Every stock he owns has to be attractive on an absolute basis. If there were incredibly low values on the banks, he would be interested. Looking at them today, he does not think their price is at a point where he has a positive enough risk/return skew.

Stephen Groff
Principal & Portfolio Manager, Cambridge Global Asset Management
Price
$117.900
Owned
No
PAST TOP PICK
PAST TOP PICK
March 15, 2017

(A Top Pick April 20/16. Up 34%.) This tends to specialize on medium/heavy duty size automatic transmissions that go into things like school buses, refuse trucks, etc. This is a cash flow machine. It was very cheap a year ago and is still attractive, but not inexpensive. Still a great company.

(A Top Pick April 20/16. Up 34%.) This tends to specialize on medium/heavy duty size automatic transmissions that go into things like school buses, refuse trucks, etc. This is a cash flow machine. It was very cheap a year ago and is still attractive, but not inexpensive. Still a great company.

Stephen Groff
Principal & Portfolio Manager, Cambridge Global Asset Management
Price
$36.520
Owned
Yes