He doesn’t own this. Airlines are very cyclical and are traditionally poor capital allocators. WestJet has been better with capital, but there are concerns after the pushing out of their CEO. The underlying issue might have been labor relations and perhaps the new CEO can manage this better. However, airlines are getting late in their cycle, so the sector has a lot of risk. WestJet is trying to grow internationally, which is inconsistent with their original focus on the local market using one type of plane.
He doesn’t own this. Airlines are very cyclical and are traditionally poor capital allocators. WestJet has been better with capital, but there are concerns after the pushing out of their CEO. The underlying issue might have been labor relations and perhaps the new CEO can manage this better. However, airlines are getting late in their cycle, so the sector has a lot of risk. WestJet is trying to grow internationally, which is inconsistent with their original focus on the local market using one type of plane.
(A Top Pick December 27, 2017. Down 2.09%). It’s currently in a bit of a limbo period, waiting for regulatory approval of a large acquisition (they bought The Linde Group, which is a peer of Praxair) to close. Praxair is a very good operator but the industrial gases business raises monopoly concerns, so the regulator will have make decisions about which businesses Praxair will have to divest. He expects the business to do well after the regulatory decisions are made. [Note: There was no table for this stock at the end of the end of the segment to show whether he owns this stock or not.)
(A Top Pick December 27, 2017. Down 4.49%). This is a player in restaurant equipment. They have done a great job deploying capital into complementary kitchen equipment businesses. They do a great sales job, explaining the value of new equipment for water savings, energy savings, etc. Their margins have been under pressure but he believes this will improve over the year.
(A Top Pick December 27, 2017. Down 10.29%). This is a natural gas stock. There is a cloud of negative sentiment around Canadian energy. He believes that the cloud of issues that plagued Canada in 2017 are resolving themselves. He sees this as a low-cost operator and disciplined. He expects this company to do well at the end of shakeout. Tourmaline added a dividend, which shows a lot of self-confidence in the company. They have very strong management, very high insider ownership, and is committed to the shareholders.
Buffet has put together a strong collection of consumer and industrial businesses. However, he is having difficulty in putting capital to work. He has 120 billion in cash on hand and is having trouble finding good places to put it. The company has a good succession plan and they have diversified their operations which will ease the transition to new management after Buffet is gone.