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Energy. From a technical analysis perspective, oil hit a bottom in June at $42. Despite that oil can be found for less than $40 in a lot of US oil sands locations, this is more of a general economic reflection. The stock indices of emerging market countries, have broken a six-year downtrend, a reflection of an improved economic activity. With that comes a rising demand for commodities, including energy, and he thinks oil has bottomed at $42. This is in a band of roughly $42-$56. Whether it goes to the top end of that band or not, it is a significant percentage change and would be very beneficial to a lot of energy companies on the TSX. If we get an increase in overall world demand, that should help with the overall tone and hopefully with the price of oil.

Print media continues to struggle. This company had a digital division that was attempting to turn things around, but hasn’t. They are expected to lose $.22 on earnings this year, and $.22 next year. It is still facing a struggle with regards to the stock price. He would look elsewhere.

Recently announced they are going to consolidate the stock, which typically means they are optimistic about the future. This revolves around 2 things. They have black box flight recorders operated through a satellite system as to where the plane is, so it is always on and always available. There is a new 2020 change in legislation that basically says that if there is an airplane in distress, you have to know where that airplane is and be able to receive a signal at least once a minute. This is the only company globally that has the capability to do that. Their device is installed in about half of the Airbus A320 planes. They have an installed base of 1000 units in those planes, and are going back to the owners of those planes, explaining they can get huge benefits from efficiencies of reduced fuel consumption, maintenance, etc. The boxes are in about a 3^rd of the Chinese fleet, which has a mandate that by 2017 they have to know where a plane is. Theoretically this has the potential to double the size of their active base by signing one of these Chinese companies in the next couple of years. There should be progress by the end of this year.

An approximate 7% dividend yield, indicating there might be some risk. The most recent 4 quarters of cash flow was 76%. Historically that is high, but is also typically maintainable. Earnings is expected to be $1.50 this year, growing to $1.64. His ranking out of 720 stocks is 124, which is an acceptable risk.

He owns no marijuana stocks. This company recently put out their earnings, and as far as he knows, it is the only cash flow positive marijuana production company in Canada. Their cost of production is about $1.11 a gram, and low cost these days is $2 or less. They are also taking some of their product and producing oil, which is important. If you end up with mold and run it through a distillation process, you can quite happily extract the THC and CBD, giving you a product that gives you no concerns. Also, the oil has a 5-year shelf life, so it can be used in future applications such as edibles, vape pens, etc. What happens to the industry in the summer of 2018 and will the consumer be there?

The recent decline in sales is because of the uncertainty of NAFTA. There was also the impact because of potential changes in tax legislation about writing off taxes faster. That seems to be behind them now. This is an investment on a long-term basis as they take machines on the shop floor figuring out which ones are producing, to get rid of bottlenecks. The payback is about a 400% return on their investment. The company has spent about $3 million over the last 3 years upgrading their product. This is a stock you can buy, throw in a box, and 2 years from now you will be very pleased.

Canadian banks are starting to appear in his “okay to buy” list, but lifecos have not shown up yet. His ranking is 122 out of 720, but when looking at earnings and cash flow, both have been negative on a year-over-year basis.

(A Top Pick Nov 4/16. Up 19.88%.) A dearth of pilots makes this a great catalyst, and will probably be so for the next decade. There is a huge number that will be retiring, and demand will be significant. There is also a massive expansion in China. This continues to rank very high in his model. Dividend yield of 1.4%.

(A Top Pick Nov 4/16. Up 9.44%.) This does not pay a dividend, but has a significant free cash flow generation. They also own property near the Science Centre which has been re-permitted for multiple use. A low, flat building that has been used for manufacturing, probably the largest chunk of real estate in Toronto. The underlying business is quite good. They are moving away from physical telephones and servers to medical and aeronautical devices giving higher profit margins.

(A Top Pick Nov 4/16. Up 18.42%.) The real question becomes do you expect Apple (AAPL-Q) and Google (GOOGL-Q) to end up bending metal like Tesla, or do you expect them to use this company instead. He thinks there is a great opportunity as the current supplier.

Higher interest rates should be positive for Canadian banks. This ranks 78 out of 720 in his rankings. All the banks are basically clustered in the top 15% of his database. This may end up being the unloved child amongst the big 5, but generally speaking, a package of Canadian banks over the next few years should do fairly well. Thinks you will be happy with this over the next couple of years.

Manufactures buses that are slightly smaller than a regular bus, as well as costing less. They have a huge backlog. A niche product because of the shorter turning radius, less expensive, and qualifies for “made in the US”. There are good opportunities both in Canada and the US. Earnings growth is expected to go from $.05 in 2017 to $.15 in 2018 against a stock price of $2.63, which gives you about an 18X PE multiple. Expects you would be happy with this investment.

Earnings estimates were $1.59 for 2016, and dropped to $1.14 for 2017, and then goes to $1.39 for 2018. There is reasonable year-over-year growth from 2016 of 12%. It ranks 308 out of 720 stocks in his model. On a near term basis, year-over-year cash flow has declined by 16%, and year-over-year earnings growth is -12%. The upcoming quarter is even worse at -16%. Dividend yield of 3%. He would look elsewhere.

This ranks 413 out of 720 in his model. Payout ratio is pretty modest at 5%. It looks like oil has bottomed at $42. If it headed to $56 at the high end of his estimated band, then it will get a lift. There are probably better opportunities elsewhere. Dividend yield of 1%.

If the underlying commodity price improves, that should be beneficial. At the moment, earnings estimates are for $.04 in 2017, a pretty pricey PE multiple. This is expected to improve to $.27 in 2018 which gives a 12 multiple, and a $.53 multiple for 2019 giving a 7 PE, which becomes interesting. It looks like a reasonable bet.