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COMMENT

Rates sensitivity of the stock has affected it. He prefers BCE Inc. (BCE-T) as it is more diversified and has put a lot of fiber in the ground and that will drive growth for a while.

Cable
BUY

Owned it for a long time. Technology moved from enterprise to consumer and now going back to enterprise. The cloud is still very small compared to other aspects. Still lots of companies can move and this company is well positioned for that. Generating lots of cash. Good profitability. They are in a sweet spot and continue to do well. They have a lead on the cloud.

computer software / processing
BUY

Very well-run. They owned and sold it. Great business. Can’t go wrong with this.

Financial Services
TOP PICK

Much cheaper than other dollar stores trading at 16 times earnings. No dividend. They bought Family Dollar and that didn’t go that well and affected the stock price. They continue to do well. Good growth profile. (Analysts’ price target is $102.31)

merchandising / lodging
TOP PICK

Great Canadian company. California Closets, College Pro Painters are some of their brands. The other business is the property management business. Stock trades at 28 times earnings but it is a very capital light business with no fixed assets. Generate very high free cash flows. They can grow. Very good exposure to the US. (Analysts’ price target is $94.75)

other services
TOP PICK

High barriers to entry. Pricing power. Rational competition. Yield 1.6%. not paying a lot for it. They are solving the customer service problems they had. (Analysts’ price target is $111.28)

Transportation
COMMENT

Market. Stock piles are nearing record low levels. Lack of available inventory within OPEC and lack of investment in OPEC and non OPEC countries. Inability to meaningfully grow production after 2019. USA has a pipeline bottleneck until 2020. With continued demand growth, we see inventory continuing to drop. See inventories approaching all time lows by the end of next year. Demand will only decelerate in today’s economy at $120 oil.
40% underperformance by Canadian energy stocks relative to index. A lot are trading at 4X multiples instead of normal 7.5 to 8X. He sees a minimum of 50% upside and if he is correct at $80 oil, he sees 100% upside in Canadian energy stocks.

Unknown