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BUY

Over the long term it is a great company. The entire group of larger cap banks in the US are very well positioned. They are as well capitalized as they have ever been. They are benefiting from a strong US economy and housing market. Loan losses have been very modest as housing prices continue to rise. They trade at a pretty low PE multiple. He thinks they will continue to do well.

banks
WATCH

It is in the packaging space. They just acquired a packaging company. The stock has weakened recently because of input cost pressures and a facility in South Carolina that gave them some issues. They trade at a fairly low multiple compared to peers. He is doing some homework on this one because it could be a potential buying opportunity.

packaging / containers
TOP PICK

It is a good defensive pick in a market like this. They have a fantastic long term investing track record. They have had a lot of cash historically and are now starting to invest that. Their insurance operations are operating as well as they have in a long time. It is only at 1.1 times book value. He has been buying as recently as last week. (Analysts’ target: $749.47).

insurance
TOP PICK

Sentiment is very low and it has underperformed recently. It is not the old hardware business. Mostly it is software and the cloud. They are investing in growth areas. Revenues are starting to grow again. He thinks there will be a significant rerating of the stock. The PE is only 10 times. (Analysts’ target: $166.67).

electrical / electronic
TOP PICK

A casino company. It is pretty defensive. They own three casinos in Alberta, where there are no new casino licenses being issued so there are very high barriers to entry. Oil prices have improved over the last couple of years and so is the Alberta consumer. They have a strong balance sheet. (Analysts’ target: $11.40).

merchandising / lodging
BUY

CP-T vs. CTC.A-T. CP-T is not as cheap as it used to be. The rails in general are benefiting from a strong North American economy. They have pricing power. It is a great business. CTC.A-T is basically only exposed to a Canadian consumer. He would be cautious on this one.

Transportation
COMMENT

Earnings season has been great, such as Thomson Reuters revenues up 20%. But these gains are already built into stock prices. Can the markets keep going up? Every August-September there's some geo-political event. These are usually the worst two months. Trump doesn't like that the U.S Fed will raise interest rates, though he's not the first President to put pressure on the Fed He thinks Powell will stay independent and won't buckle. It's difficult how Trump will manage trade, the dollar and China.

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