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COMMENT

Markets. He thinks the equity market looks decent for the next year, but acknowledges that the declining prices of copper and zinc would traditionally be interpreted as signalling a potential recession. He thinks the U.S. economy is still growing and that Canada’s will grow with it, at least for the next 12 to 18 months. In contrast, economic indicators for Europe rolled over almost a year ago. As the U.S. dollar rises, the cost of servicing US-denominated debt is rising for European and emerging-market businesses. The yield curve is close to being inverted (short-term interest rates higher than long-term): this usually indicates a recession is coming, sometime in the next 14-34 months. Typically, equities continue to rise, by about 15%, for about 18 months after the yield curve inverts, before the recession hits. In addition, there are reasons to expect the yield spread to widen, with long-term rates rising significantly in the next few months.

Unknown
DON'T BUY

This stock ranks well in the 700 stocks in his dividend-stock database, but its near-term cash flow is negative, in comparison to 3-year and 5-year cash flow growth which have been OK. In contrast, Rogers ranks as an OK-to-buy stock in his system.

telephone utilities
COMMENT

He met with them a month ago. They have a trial underway in Northern Ontario, delivering packages that are less than 10 pounds. The stock has been going sideways while people wait to see whether the trials are successful. He thinks success is a sure thing. They’re also moving to much bigger drones that can carry a skid-sized container (up to 2500 pounds) for long distances. Thus they will be able to provide delivery services for a company like Amazon, of mail for Canada Post, and of medical or food supplies to remote communities.

Transportation
BUY

Comparing Canadian Tire (CTC/A-T) and Dollarama (DOL-T). He sees Dollarama as the one you throw in a box and look at it 3 years later. The stock is expensive, but it continues to show 11% sales growth and 12% earnings growth. They have more room to grow in Canada and their international division provides further significant growth opportunity. Over a long-term time frame, he expects Dollarama to do quite well.

Consumer Products
COMMENT

Comparing Canadian Tire (CTC/A-T) and Dollarama (DOL-T). He sees Dollarama as the one you throw in a box and look at it 3 years later. The stock is expensive, but it continues to show 11% sales growth and 12% earnings growth. They have more room to grow in Canada and their international division provides further significant growth opportunity. Over a long-term time frame, he expects Dollarama to do quite well.

specialty stores
BUY

This company is an antenna specialist. It just acquired two other companies in its space. He sees great opportunity for Baylin in the 5G telecom rollout because it requires a huge number of small devices with sophisticated antennas.

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BUY

He has worked as a consultant for this company for over a year. They continue to work on their CapitalCube service, which is doing well, and on improving their AI-based offerings. They can provide automated analysis of small companies that are underfollowed, which makes them attractive to Thomson Reuters. They have fintech opportunities with some very large banks around the world. They acquired a Boston-based company that is growing well. They have also developed extreme interest in a workflow product for dispatching workers and vehicles, to improve workforce efficiency.

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