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Has always admired management. It’s important to understand that they don’t make movies, so if Hollywood makes lousy movies that no one wants to see, this company suffers. They have figured out something to do about this and have basically diversified their revenue. Created Rec rooms, which are basically man caves for millennials with a bar and a restaurant and a lot of great games to play. They’ve been brilliant in establishing new revenue lines. However, at the end of the day, people have to go to the movies and they have to be good movies. He is looking for a very strong 4th quarter with strong new releases. Dividend yield of over 4%.
Likes this for its international platform, and its exposure to basically every major car brand in Europe and North America. They are very well positioned for both electronic vehicles and autonomous vehicles. The stock has always traded at a very low PE multiple, generally under 7X earnings because of the cyclicality.
Artificial Intelligence is something that almost everybody is interested in. This company is in that business. They made their bones as the first big hardware company when mainframes were the thing. Also invented the PC. In recent years, this has become a software company, almost like a utility in terms of managing existing infrastructure.
Sitting on a very good property in the Montney, and everybody is excited about shale now in Canada. He is not big on fossil fuels, and doesn’t own any. If he were going to own any, it might be this company because of the quality of the real estate they are sitting on, and that gas is the future of energy.
Canadian dividend paying ETF? He doesn’t do ETF’s for dividends. Prefers buying stocks one at a time. You can’t go wrong buying good stocks. He would be looking at 1 bank, 1 utility company, and 1 REIT. He would buy BCE because of its very high dividend yield, Fortis as a Canadian utility, and probably National Bank of Canada as well as H&R REIT. This will probably outperform an ETF, but you will have to pay attention.
There are some certainties in life, and one of them is toilet paper. They are going to commission a new machine at their plant in Memphis Tennessee, which will increase output. It’s a competitive business. They do private label branding for the big box stores. Thinks earnings will come up and distribution will come up. Dividend yield of 4.8%.
(A Top Pick July 7/16. Up 3%.) People were concerned about ESPN, so-called cord cutters and carriage contracts. He is still a believer. They have a lot of intellectual properties in their film library. They’ve announced their own streaming service, so are going into competition with Netflix.
(A Top Pick July 7/16. Up 48%.) Had thought the stock was undervalued and was quickly growing. Although listed in Toronto, 90% of revenue comes from the US. They do everything from cutting grass to painting houses to providing security services, primarily for gated communities. There is a big runway for growth, because it is a very fragmented industry. Well-managed.
He is wary about retail in general because of Amazon. However, you would think people would buy their tires in person rather than online. A lot of the stuff that you buy in stores could be bought through Amazon. Online retail is less than 10% of the market, but has had a dramatic effect, primarily on margins. He doesn’t think he would be buying this company.
Very bullish on Canadian banks in general. Believes you can pick and choose rather than owning an ETF. He likes Bank of Nova Scotia (BNS-T) for its international exposure which gives it greater growth potential. National Bank (NA-T) for its lower multiple. Toronto Dominion (TD-T) for its big US retail exposure.
$100 billion in sales. Has an order backlog for about 3000 737 jets. Air travel is growing globally, particularly in Asia and this company has a tremendous capability, although China is starting to manufacture its own jets. Traditionally, it has not been a well-managed company. They have quite aggressive unions. However, the more research he does, the more he thinks travel and mass market tourism are going to be growth industries going forward, and he has to find ways to participate.
They now have more than one type of aircraft, and instead of just a North American company, they are flying to Europe and want to fly to Asia. Looking at the possibility of ultra low-cost carriers coming in. In the US, the constraining factor is gate capacity at the airports, but it is not as limited in Canada. This company and Air Canada are vulnerable to a well financed ultra low-cost competitor.
Among the big 6 Canadian banks, either this or Bank of Nova Scotia (BNS-T) is the best performer. Traditionally it has been seen as having a more limited scope than the others. They’ve done a reasonably good job of broadening their platform. However, remember Canada has the fastest growing economy in the developed world, so it is not a bad place to be a banker. This one continues to have the best dividend yield. Still trading at a bit of a discount to the others. He still believes in it. Dividend yield of 3.9%.
Market. World markets are at near record highs. The Purchasers Managers Index shows there is synchronized growth globally, such as we have not seen during this century. It has been a tough year for Canadian investors to make money, because they have been hit by the strong Cdn$ which has been going up as well as having one of the worst performing stock markets in the developed world. If you bought the S&P 500 at the very worst possible time, the peak in 2007, you have now doubled your money.