DON'T BUY

He owns two engineering companies – SNC Lavalin (SNC-T) and Stantec (STN-T). He keeps waiting for the actual infrastructure spending incentives from the Federal government to ignite these holdings. Aecon’s senior management does not impress him. He would prefer to hold the other alternatives.

HOLD

This is a regional US bank. The space has been on the bubble with concerns of rate increases on 10 year bonds breaking above 3%. He would continue to hold and sees a good future.

HOLD

He does not own any auto stocks. He says this has held up better than other competitors, like Linamar (LNR-T). He thinks it is because of its international diversity. It is a hold right now, due to the recent tariff rhetoric.

DON'T BUY

He has nothing against “sin” stocks. However, he sees the industry in its infancy and does not know what the future margins and earnings will be. The current valuations are too risky. Some players will survive, but would recommend waiting to see how things settle. The easy money has been made.

DON'T BUY

He does not presently hold any REITs today. It is consumer retail sales oriented and is interest rate sensitive. He is leery of both of these fundamental drivers.

DON'T BUY

He does not presently hold any REITs today. It is consumer retail sales orientated and is interest rate sensitive. He is leery of both of these fundamental drivers.

TOP PICK

This is the only Canadian bank they own. This is the most international bank in Canada, with more assets being owned outside of the country. These assets are not in the US. It has been hitting recent lows. When it sold its CI holdings, getting out of mutual funds, they have been buying a large asset manager and a private client business focusing on physician investors. The problem is the market feels they may have overpaid for these investments. Yield 4.4%. (Analysts’ price target is $86.40)

TOP PICK

Based on the merger of Potash Corp and Agrium. This is a commodity that he feels has upside potential – both potash and fertilizers. Earnings estimates on the street, he feels, are underestimating the potential. Yield 3%. (Analysts’ price target is $74.90)

TOP PICK

A French pharmaceutical company, who has been impacted by patent protection ending on some key products. They lost out on a couple of acquisitions, that the company felt was too expensive. He believes this is a long term hold that will pay off over time. Yield 4.4%. (Analysts’ price target is $46)

PAST TOP PICK

(A Top Pick July 25/17 Down 5%). This is the biggest logistics company in the world, based in Switzerland. They manage warehousing around the world and could be impacted by the current trade rhetoric.

PAST TOP PICK

(A Top Pick July 25/17 Down 19%). It is a BC based natural gas producer that has been disappointing due to the lack of takeaway capacity. There is a possible BC LNG facility being talked for the market and demand is growing in North America for natural gas. It is not the time to sell. He likes the yield.

PAST TOP PICK

(A Top Pick July 25/17 Down 46%). He has been killed owing this in his portfolio, he says. The CEO has been removed and the new one is being cautious to take time to study the long term strategy. The market has been impatient and has sold the stock down. GE has been removed from the Dow Jones 30.

COMMENT

Now, you have tailwinds vs. headwinds: solid economic data and corporate earnings from the U.S. vs. esclating trade tensions around the world. If there's easing of the latter, then we can see a longer bull-market ride. Be in cyclicals. The
defensives including telecoms have done well the past few months, but now he suggests moving into cyclicals. About 75% of his holdings are in the U.S., especially consumer discretionary. He's also being cautious by taking profits faster, and hecurrently holds 12-15% cash which is higher than his 5% norm. He holds FANG stocks like Facebook and Google and some semiconductor manufacturers. He has sold his Canadian oil stocks as the price rose. He's not sure that oil can continue to push higher.

COMMENT

It corrected in January, but is trading above its 200-day moving average. That said, its 50-day moving average is moving down, which is a concern. Its valuation is also high. Tariffs may hurt them, which could increase prices and limit revenues. He's neutral about this stock.

HOLD

He likes U.S. banks, his largest weighting. But the yield is curve is flattening. He's holding tight to these stocks. Expect more share buybacks and dividend increases. It pays a 1.7% yield and this will rise. Be patient with this.