It took a huge beating after the IPO last year and then came back. He has difficulties with their forecasts because they are often more optimistic than they should be. They are moving into the states which will be costly. They are building a new distribution center but they take a while to ramp up. He thinks they will have tough sledding going forward and will not hit their profitability goal so there won't be a dividend any time soon. Their same store sales went up and their revenues went up, so that is positive.
The energy sector has moved up somewhat. Gas has not done as well as oil. He made tremendous money in the past with this one but has recently been killed with what he still holds. They make promises and never come through. He is very wary of it. It could go up 10 times or go bankrupt. It is the definition of high risk / high reward.
Pipelines have been front and center. What the Feds are doing is stupid. They should have waited. There is a chance that the government of BC will change in the next few years and the majority of the population wants the pipeline. We know we need more pipelines to get more oil to market. West Texas pipelines will be exhausted in 4 months, they say. The question is how many pipelines are needed. The energy we use is changing dramatically as well get into alternative energies. Will pipelines become white elephants in the future?
(A Top Pick Aug. 14/17, Up 8%) It had moved up a lot further at one time. They pay a lovely dividend. They operate in numerous companies. He does not like that they had been buying numerous companies but this had slowed recently. It could potentially be a triple. Hopefully it has just started to get going.
He owned it years ago before it went private. He did very well. They did poorly over the last few years and then approved a huge pay package for the CEO. He does not like buying into companies where management is going to be paid too much. Retail is having difficulties. He prefers RET.A-T for retail exposure.
He usually does not buy stocks over $10 but he did this one. They have a lot of problems. There is a question about dividend sustainability. They just got kicked out of the DOW. Two other companies went up greatly after being kicked out of the DOW and taking a dip. He is being conservative on this one because there is a lot of risk. Don't buy more. They have a big pension liability to deal with as well.
Market. He sees governments running big deficits and worries about it. When employment is high, that is when governments have to run surpluses to pay down the debt. Politicians don’t want to lose voters so what is good for the economy is bad for voters. There's going to eventually be a recession and the only way to fight it is to spend and increase the deficit.