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(Past Top Pick on August 30, 2017, Up 55%) It hasn't been an easy ride, especially if you use stop losses. He's been in and out of it the past year, but remains a big fan. Clients include Facebook and maybe Alibaba. The CEO owns 8% of the company. Their big issue is a short seller questioning the health of their accounts, but the core of their business remains strong. The only headwind is Adobe buying Magento as a direct competitor.
Ontario Premier Ford fulfilled a campaign promise to get rid of Hydro One's CEO and did so today by getting rid of the board--then the CEO retired. He doesn't know how this will effect tomorrow's stock price or on markets in general, but points out that the Ontario government owns 50% of Hydro One. Good revenues and yield, but the question is what wil the severence packages be? It could cost $10 million. He thinks this is a good step in the right direction to bring down executive compensation. Ontario must reduce its debt. US-China trade tensions today: the surprise are tariffs will hit consumers in their bedrooms and bathrooms, but also China doesn't have enough imports to retaliate against the U.S. What may happen is it will make it really hard for American companies to do business in China.
What will be the impact of the trade war and tariffs on Canadian rails? He doesn't know, but wouldn't worry too much. Note that in the past month CNR has gone up while CP has gone down. CP may be more impacted, but it's also dealt with a strike. He prefers CNR and still likes it. They have the Chicago Advantage with their line running through Chicago without getting stuck in that huge hub. CNR is a great proxy on the Canadian economy.
What will be the impact of the trade war and tariffs on Canadian rails? He doesn't know, but wouldn't worry too much. Note that in the past month CNR has gone up while CP has gone down. CP may be more impacted, but it's also dealt with a strike. He prefers CNR and still likes it. They have the Chicago Advantage with their line running through Chicago without getting stuck in that huge hub. CNR is a great proxy on the Canadian economy.
A big holding of his. There's a sea change in businesses in how they're embracing technology that stretches beyond the big tech names, so this is a massive growth area. You can buy the hedged or unhedged version (he buys the hedged) and buy these big U.S. tech names without worrying about the Canadian dollar. They also do some covered calls. Pays over 5% yield.
He loves this stock and was happy to see it rise today. Great management. They fell into tough times the past 18 months and that's when he pulled out. Today's move encourages him to re-buy it. A Canadian success story in Europe and the U.S. Growth through M&A, but they needed a break from this, which is why the stock went sideways. He think they will resume buying.
Do you prefer Canadian or American banks, and which Canadian bank? Disclosure: he works for Scotiabank. Banks on both sides of the border are a little undervalued. Canadian banks aren't benefitting from rising interest rates over concerns over the flat yield curve. He thinks it's more complex. There used to be a negative on Canadian banks because of housing fears. Now, he prefers American banks. Regulations and tax cuts give them more of a tailwind. He likes BNS and RY here.
It's 40 micro-businesses in software enterprise in areas such as healthcare planning and legal professional services. They have negative working capital which he always believed is a bad thing, but here they're generating cash in their business and never need to consume cash. They can react to change quickly. (Analysts' price target: $300.55)