Today, Robert McWhirter and Bruce Murray commented about whether NIF.UN-T, AC-T, BMW-GR, AVGO-Q, SYMC-Q, DR-T, RCL-N, NWL-N, NWL-N, IP-N, UTX-N, SBUX-Q, CGX-T, ATS-T, RCI.B-T, META-Q, SW-T, HIVE-X, MRE-T, WFG-T, CNQ-T, EMP.A-T, CP-T, ATS-T, MRE-T, MDX-X, H-T, PHO-T, VMD-T, GUD-T, SCR-T, WSP-T, WCN-T, CCA-T, AD-T, ROI-X, ALY-X, BYL-T, CTC.A-T, DOL-T, FLT-X, T-T are stocks to buy or sell.
Provides extremely precise temperature measurement systems for semiconductor construction/manufacturing. All 5 of the large semiconductor makers are clients. New management streamlined the company. They have increasing orders, lots of cash and high expected future earnings. However, semiconductors are a cyclical business and cellphone sales have been slowing significantly. They are being brought into more aspects of the manufacturing process and their benefit is making the manufacturer more efficient, so their opportunity is still significant going forward. They will probably make an acquisition with their cash but he doesn’t know what they might buy or how it will help them. (Analysts’ price target is $2.95)
The market doesn’t like the uncertainty associated with this company, which includes a change of management (in progress) and delay of approval of their planned acquisition of another business in the USA. He thinks the stock is overpriced relative to expected earnings growth. It has negative free cash flow. Dividend coverage is good but with negative cash flow, he doesn’t expect dividend growth.
All three of the auto parts makers--Martinrea, Linamar (LNR-T) and Magna (MG-T) are at significant risk if the US imposes its auto tariff. Setting aside the risk, MRE ranks better in his database than the other two. He sold MRE and LNR in order to lock in his profits as the price declined. He may soon sell Magna. He will not consider buying them until their prices start to improve.
Comment on Utilities versus Telecoms. In a rising interest rate environment, stocks in both industries come under pressure. Research by Ned Davis suggests that dividend stocks can still perform well in a rising-rate environment if their underlying earnings are improving. He owns more utilities and fewer telecoms but in general he thinks there are better opportunities than appear in either industry at this time.
They design and build turnkey manufacturing and test systems. Doesn’t pay a dividend, but he thinks it is coming out of a long sleep with great opportunities as many companies bring manufacturing back to North America. They had a big earnings surprise this quarter and analysts’ forecasts have been revised significantly upward. Looking at the technical pattern, he thinks there is a possible 50% upside. (Analysts’ price target is $22.40)
Daniel Farb resigns from the board of Meg Energy, unhappy with its direction. He agrees, unhappy with their direction. Also, energy is a sector you want to be in only a short time. He thinks we're in one of the great bull markets. Other than Trump, the world is a great place. Commodity prices are high. Inflation is low. The stocks that rose, did, as seen with current earnings reports. Trump creates a lot of noise and some of that he makes into policy that is destructive to a degree to Canada. However, Facebook, Mastercard and other U.S. companies are doing well. We're moving away from factories to automation, and those who used to vote Democrat feel left behind. He doesn't know anyone cancelling Facebook and he expects their earnings report to be strong.
The best large-cap energy company in Canada. However, Iran, Iraq, Russia, Libya and other big oil producers are being constrained to sell oil. Canada, too. We need better politics to make our energy sector more attractive to investors. He fears a revolution in Venezuela in five years where they want to bring Exxon. Other countries, like Iraq, need oil revenues, too. That said, the world is reducing fossil fuel consumption. This is a tough business
Of the three Canadian auto parts makers, MRE is #3. After some struggle, MRE has been running well the past five years. It lacks the leading edge technology of its peers. All three are being effected by politics (Trump's tariff threats). He owns Linamar instead. MRE is cheap now, but these companies are fighting current headlines. That said, he likes the stock. It has good fundamentals.