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This has been diversifying into other beverages including water and new age beverages. Prefers PepsiCo (PEP-N) which can do foods with snack foods where their focus on growth is. In the short term, both are going to be a little weak. The consumer staples group has done well, but now people are looking to get a little more cyclical, so these 2 are running out of favour in the short term.
Has owned this for some time. Bought it during the financial crisis when people were basically giving away shares of financial companies. It has diversified, being almost more of a money manager than a lifeco. It is growing its life business both in Canada and the US as well as in Asia. Like most financial stocks, this responds to higher interest rates. The 10-year US bond is starting to have strength, which is positive for lifecos. He is positive on this company.
Recently weakened following its 2 major acquisitions. A growth by acquisition company. Recently acquired Ultramar in eastern Canada and Chevron’s Canadian refinery and gas station business in Western Canada. It has become a “show me” stock, and is a great, long term buying opportunity. Dividend yield of 4.4%.
Loblaw (L-T), Empire (EMP.A-T) or Metro (MRU-T)? Loblaw has proven to be the best run grocer in Canada. This company has had its challenges but under the new CEO, it is showing that it is starting to come back. If you are a turnaround person, even though it has had a big run already, it is starting to outperform off a very bad low, and has the most turnaround potential.
Prefers regional US banks. When you go with the regional banks, you are getting pure banking and exposure to loan growth with exposure to higher interest rates helping them. With the centre moneyed banks, you are also bringing capital markets into play, which is an area he doesn’t want to play in right now.
Which FAANG stock would you choose? As a value investor, he wouldn’t touch any of them. It looks like they have peaked as money is moving out of them temporarily, into more cyclical stocks, financials and even energy stocks for now. Because of that, he wouldn’t own any right now. If he had to pick one, this one seems to really dominate what they do.
(A Top Pick Nov 8/16. Down 19%.) The whole energy complex has come down. Despite the fact that this is 70% natural gas and only 30% oil, it traded like an oil stock. In spite of being the best capitalized, one of the best run, and with great properties, especially in the Montney region of BC, it got sold off. The new BC government is against fracing, LNG, etc. It seems to have bottomed, which is a great buying opportunity.
(A Top Pick Nov 8/16. Up 20%.) This is an engineering company, not construction. They recently made a major acquisition in the US to get them more into the water engineering business. Earnings came through very, very well. They will be a beneficiary once the North American governments start spending money on infrastructure, rather than talking about it.
This is interesting because it is basically Canadian only, mostly in Québec and a larger capital markets operation than other banks on a relative basis. The fact that it is not over exposed to the mortgage market in Ontario and BC has been viewed as a positive. The lack of exposure to the US has hurt them, but offsetting that they have a lot of energy exposure in Alberta. Dividend yield of 3.9%.
