Today, Paul MacDonald and Robert McWhirter commented about whether VTRB-N, ABBV-N, ZBH-N, CELG-Q, AZN-N, UNH-N, SYK-N, SNN-N, GSK-N, PFE-N, TEVA-N, SYK-N, MRK-N, CELG-Q, WSP-T, WCN-T, CCA-T, MX-T, EIF-T, OSB-T, ET-T, DYA-X, EFN-T, GIB.A-T, ALY-X, HLF-T, KEY-T, HEXO-T, MDT-N, WMD-X, GILD-Q, XBC-T, NFI-T, RTI-X, SU-T, PAT-X, NTR-T, ATD.B-T, SU-T, CNQ-T, JNJ-N, BAX-N, ZTS-N, BSX-N are stocks to buy or sell.
Market. He thinks interest rate increases in the US caused a pullback in utility stocks recently. Overall he sees an increase in defensive equities. There is a rotation towards value stocks and he expects interest rate sensitive sectors such as utilities, real estate, food and tobacco will face headwinds. He thinks the market is stretched and would expect a rotation into value stocks, which for Canada, he thinks, would mean mining stocks. They presently hold 18% cash and expect that to increase towards 25% at month’s end.
Will Provincial marijuana regulation give Canopy a shipping opportunity? A recent article by a market analyst suggested Canopy (WEED-T) has an advantage with multiple provincial locations and about 5.6 million square feet of space including a 700,000 square foot facility in Quebec expected to be in operation by May this year. He guesses their capacity will be 270 million grams per year, which should project $1.1 billion in annual sales beginning in September most likely. They are a monster in this space.
NAFTA auto talks converging between the US and Canada. Positive comments from US Trade representative on NAFTA auto talks progress is seen as good news for companies like Linamar (LNR-T) and Magna (MG-T). Also positive for North American automakers in general, where uncertainty over trade between Mexico, Canada and the US was causing some concern in that sector.
He does not know much of this one as it does not rank highly in their database. The challenge is earnings are down 53% on a combined basis. Their upcoming earnings in April are expected to be down another 39% from last year and with a P/E above 21 times it looks expected. Free cash flow is marginal at 1%. He sees better opportunity elsewhere.
He says their technology allows for a higher yield of cannabis oils by dramatically reducing crop drying time. This reduces working capital. They also have an interest in tobacco, where they are trying to extract nicotine without the same high tar yields. They may be a partner for Phillip-Morris in the future he thinks. Near term marijuana is the opportunity.
No dividend, focussed on cardiac equipment like pacemakers. Have made many acqusitions in past years. Fabulous management. Have driven cost synergies consistently. Beat estimates recently. Forward earnings are 20x. A solid hold.