They will be benefiting for decades to come so it is a good time to buy Telcos in Canada in general. T-T is a pure play and BCE-T isn't a pure play but he owns both. BCE-T have the best assets in Canada. He shied away from Rogers (RCI.B-T). There is churn and customer service that has to be improved. When it is beaten up it is probably not a bad time to buy it but he prefers the other two companies.
(A Top Pick Jun. 26/17, Down 3%) They have been investing heavily in new plant and equipment. This is a great entry point. They are lowering their costs. They have 30% of the Canadian market and the next biggest player is very weak. There are one time start up costs. This is when you want to invest in these kinds of companies. This is a great entry point and he added to his position recently. You get a great dividend while you wait for higher margins.
(A Top Pick Jun. 26/17, Down 5%) They are now the largest in the industry. They are extremely well managed. They had record results and raised the dividend several times since he recommended it. It is trading below book value. It is a great value investment and is growing well despite the new mortgage rules. Customers wanting to take mortgages elsewhere are subject to the new stress tests.
A core holding for him. He participated in the new issue. They have market share estimated at 40%. A very well managed company. They have much higher customer loyalty and lower customer turn than others. They are managing their costs. They are spending a lot in marketing. They are investing in the growth of the business to get greater market share. It is cooking for dummies. He thinks they will do very well and could get acquired by a big grocery chain.
He sold not that long ago. He is concerned about the sector. These are extremely volatile stocks. It has been punished by its own results and uncertainty due to NAFTA. These companies ride the cycle of new vehicle sales and launches. You want to buy them really cheap when nobody wants them. Stay out of the sector right now.
e looked carefully at it but it got away from him. It is related to the semiconductor industry. There is cyclicality to it. It is hard to understand what they do. You want to buy when the multiple is cheap. It is a great turnaround story. They generated good growth. Sales can be lumpy. It is richly valued and he would trim at this level.
Market. Valuations multiples in the US are very expensive compared to the tepid growth there. There are high debt levels and trade wars affecting them. There is a lot of uncertainty out there for companies trading at rich multiples. Marijuana stocks are indicating market tops, typically. We are in that zone so be a little more cautious at this time. There can be opportunities in Canadian stocks. Smaller and mid-sized stocks have been neglected for the last two years. ETFs require a liquid stock in their portfolio so demand for those ETFs push up those large caps. People will scramble at some point for the exits.