Today, Brian Acker, CA and Paul Harris, CFA commented about whether FSV-T, CNR-T, BAC-N, RDS.A-N, BAM.A-T, GPS-N, TSLA-Q, LVMUY-OTC, QSR-T, BX-N, CVS-N, ACQ-T, HPQ-N, TD-T, F-N, BAC-N, CSCO-Q, INTC-Q, ENB-T, PAYX-Q, CRM-N, ACO.X-T, ALA-T, LNR-T, CNR-T, PM-N, INTC-Q, AAPL-Q, C-N, EMA-T, TIH-T, EW-N, WFC-N, PWF-T, DSG-T, META-Q, AMAT-Q, ARE-T, JNJ-N are stocks to buy or sell.
He would hold it. It is a great divergence between what the market is doing and what the fundamentals are saying. Everyone is predicting doom and gloom in the auto sector. They are right in the heart of Canadian auto parts. His model price is 102% from where it is. Once we get clarity on NAFTA and where we are in the auto sector, he would look at it.
Market Outlook. The US economy is doing well. The Canadian market is doing good. So, in general North America is doing very well. The yield curve is flat saying that there is no going to be a substantial amount of growth and relatively low inflation. He thinks that the Fed is increasing the rate but also reducing its balance sheet (down by $200 billion by the end of the year). This in the end is tighter monetary policy that is having an effect in the emerging markets. He thinks the Fed could not be doing both things at the same time. In 2019 the European Community and the European Central Bank thinking about stopping EQ there. He is not negative on the stock market but doesn’t see huge runs also.
How do you see gold? Real rates are positive in the US now and that is negative for gold. Gold had a run up because people believe that QE was going to lead to inflation and that didn’t happen. Gold is also now competing with other assets like Bitcoin for that preservation of value idea. There are other better places to put your money.
What happen to shares when they are bought back? Share buybacks are an economic decision that companies make. The problem with share buybacks is that sometimes companies use debt. When they buyback the shares companies retire them basically. If companies do it when they don’t have a better place to invest their money other than paying a dividend they run earnings per share higher basically.
It has negative equity of $12 billion. It trades on air. There are better opportunities elsewhere. Don't touch it.