Today, David Burrows and Douglas Kee commented about whether FTS-T, CNR-T, TD-T, NTR-T, BIP.UN-T, RCI.B-T, TD-T, NPI-T, MFC-T, CCO-T, IPL-T, ENB-T, BMO-T, WCN-T, CPG-T, H-T, BNS-T, RBA-T, TECK.B-T, HBC-T, AQN-T, SJR.B-T, CNQ-T, PWF-T, MSI-T, ALA-T, IR-N, ADBE-Q, BAC-N, SCHW-N, IRTC-O, SIVB-O, VET-T, CCL.B-T, KKR-N, CPX-T, MG-T, MIC-N, ATD.B-T, BABA-N, IPL-T are stocks to buy or sell.
This is an alternative asset manager. Their exit strategy is to sell these alternative assets to the market. When the market has a correction, it raises concern about their exit strategy. As this was a short-term market correction, this company should benefit from a recovery. It has out-performed over 85% of the S&P500 stocks over the past 12 months. He would buy it right here. It is only 9-10 times earnings and they will have opportunities to monetize its assets.
He thinks that technology is disrupting the market and this company is a regional bank in Silicon Valley. It has been banking early stage tech companies for about 15 years and has a very loyal customer base. The book value has grown by 13% per year for several years. Deposits continue to grow and it is the fastest growing regional bank in the US. Yield 0%. (Analysts’ price target is $277.63 )
He likes the financial sector. This company has used technology to make the customer experience better. Over 40% of their earnings come from simple net interest margins on deposits. Asset management fees account for another 40% and it grew by 56% per year. This company is able to drop prices, but still increase earnings. Yield 0.7%. (Analysts’ price target is $60.78 )
Lately, the share price has been challenged. He thinks the WGL acquisition in Washington will happen likely by mid-year, though may get delayed. Their recent quarterly report and dividend were both fine. But they did announce they didn't sell their California assets. This is in an iffy market as interest rates rise. Dividend is okay. They have lots of good assets.
When interest rates are rising, you want a company with a growing dividend and this one has it – although it is not growing rapidly. The dividend has been growing at about 6% per year. The share price has been falling and he does not see the power sector improving. If you own it for the dividend, it is safe. You could be passing up on better opportunities.