Linamar versus Magna. He likes this space and owns Magna (MG-T), which looks much more attractive on safety issues and overall business plan. He would sell Linamar (LNR-T) in favour of owning Magna.

Linamar versus Magna. He likes this space and owns Magna (MG-T), which looks much more attractive on safety issues and overall business plan. He would sell Linamar (LNR-T) in favour of owning Magna.

The dividend was cut today, which he thinks is positive. He wonders how safe cash flow is going forward and is having a hard time pinpointing what their business strategy is. He would be cautious having the dividend be the reason to buy this stock. He is staying away.

The chart makes this a rock star, although it has paused recently. This business is a pure momentum growth stock that always trades at a rich multiple – it is always expensive. He tends to stay away from these stocks as the risk is too great of buying at the wrong time. It only pays less than 0.5% yield.

Their business model is unique as the profit margin is only half of their competitors. Their memberships are a nice recurring revenue stream. If the economy slows, they do not have the ability to cut prices. He has stayed away because of the high multiples. The P/E ratio has not traded below 25 times for the past 10 years.

The underlying components of the mutual fund side of the business have been under significant pressure, he says. The market is looking forward and sees the mutual fund business lacking the ability to create growth. Yield 5.6%.

This is down about 15% this year. From an entry perspective, it is looking more attractive; however, the P/E is still around 19 times. The yield is also supportive. The company has been focusing back to its core brands and this will take time. He would price in some further downside, but sees this as a time to step into 1/3 of your target holding. Yield 3.5%.