BUY ON WEAKNESS

Just reported yesterday, and beat on subscriber additions, on both wireless and wireline. This is a wireline company and they beat on that, partly due to Manitoba Telecom synergies. Thinks that is something that can continue, and is just in the early innings. He is only modelling a 2.5% EPS growth over the next couple of years, but not a bad valuation compared to its peers. Strong dividend and good dividend growth. You can buy more of this on a little bit of a pullback.

PAST TOP PICK

(A Top Pick Oct 21/16. Up 20%.) This has been a Top Pick for several years.

PAST TOP PICK

(A Top Pick Oct 21/16. Up 1%.) He chose this because of its cheap valuation and its long-term Alberta leases. The balance sheet has gotten slightly worse, but is still pretty good. Payout ratio is still pretty good at 81%. Trading at 12.7X 2017 versus its five-year average of 13.5X and its peers at around 13X.

PAST TOP PICK

(A Top Pick Oct 21/16. Up 41%.) Had felt this was a good play on the mobile rebound that was set to happen. He still models 12% EPS growth. The balance sheet is in good shape and the dividend is still safe. It has hit the level he had expected, so it is not cheap anymore. Trading at around 24X, which is in line with its five-year average.

DON'T BUY

Q2 earnings were up 10%. Trading below its five-year average by about 2 multiple points. Food inflation is up for the 2nd month in a row after a year of deflation. Minimum wage escalation is bad for them. Have to do a lot of heavy lifting here for their EPS to grow at 7%, and to keep their margins up at around 8.5%. He would not be a buyer.

BUY ON WEAKNESS

Just had a tougher quarter last quarter with Private Bank Corp results coming in a little bit messy. Their balance sheet isn't as good as the other banks right now. For a 3-5 year hold, he is seeing 4% EPS growth. Trades at a 15% discount to the rest of the banks. Banks are at overbought levels, but are still relatively cheap. On a little bit of a pullback, you could buy this.

COMMENT

You should be scared of the 8% dividend. 145% payout ratio in 2018. It is very tempting. This is a company that has not shut down production because of ECO prices being so poor. The bad quarters that they have had should reverse itself through the rest of this year. All things being equal, it is probably a buying opportunity, at least for a pop.

COMMENT

Just had their quarter recently, and beat by 8%. Their commodity exposed businesses were weak, but should really be good in Q4. Their Veresen assets were performing very well. He is modelling very brisk growth of 18% over the next few years. 60% payout ratio. Likes this name.

COMMENT

This is probably way too cheap. Trading at around 5.8X. Doing a good job of selling their non-core assets. One of the prominent light oil producers in Canada. They've had really strong production growth over the years. However, he models very low growth over the next couple of years. Has 126% payout ratio, so the dividend is not safe. Trading at 3X 2018 and 2019, which has him not being a buyer.

BUY

An all retail REIT. However, they are doing a good job of filling up their Target vacancies, which should give them a bit of tailwind for 2018. Last quarter, their occupancy was trending higher. He models decent growth of around 2.5% compounded annually over the next couple of years. Has a strong balance sheet. Cheaper than its retail peers, and is trading cheaper than its five-year average. This is at a level that is buyable.

COMMENT

He doesn't cover this, but does cover Agrium (AGU-T). Thinks the combined entity will bear fruit for shareholders. This is a market that is fairly depressed and will probably turn up over the next several years. It gives you the cost cutting that will create some shareholder value.

COMMENT

Is the high-yield sustainable?As he understands it, this is a corporate finance, where they will take the common and preferred shares, and lever up the common 2 for 1 in terms of growth, and the preferred shares just get the yield. A very concentrated play on the direction of the underlying basket of common. If you believe those 15 stocks are something to be owning right now, you are going to get some good capital appreciation and the yield is safe. If you go into a bear market with the 15 stocks, your yield is not at all safe. This is not without risk.

TOP PICK

Has underperformed its peers for the last 2 years. Trading at a bit of a PE discount because they have had rising Cap X, lower cash flow, concern about their dividend payout ratios. They've really been building out their fibre, but believes that is going to reach important milestones in 2018-2019 and CapX is going to start coming down. By mid-2018 they will have completed 50% of their targeted footprint. By the end of 2018 it will be 60%. This should lead to rising free cash flow and multiple expansion. Dividend yield of 4.2%. (Analysts’ Price Target is $48.50.)

TOP PICK

Just pulled back because of near-term concerns on upcoming European regulations, but believes that will ultimately create a tailwind as clients need to adapt a system to manage these new regulations. Trading at a 4-year low. He models a 6% EPS growth. They have an active Buy-back. Good balance sheet. Dividend yield of 3.1%. (Analysts’ Price Target is $49.)

TOP PICK

A TSX answer to a Yum Brands or McDonald's. A play on global growth with excellent management. Trading at 33X earnings which is not cheap, but it never does get cheap. He is modelling 24% per share growth. 3 to 5 years out this could be double, and ultimately double again from there. Dividend yield of 1.2%. (Analysts’ Price Target is $74.50.)