Latest Expert Opinions

Signal
Opinion
Expert
DON'T BUY
DON'T BUY
September 4, 2018

Ford has discontinued most of its sedan models for North America. More significantly, Moody’s has downgraded Ford’s credit rating and put it on negative credit watch. He has seen this movie before. He thinks Ford will survive. He thinks the debt level is not onerous. However, Ford has eliminated its dividend in the past to survive and he thinks a prudent management will want to cut its dividend now, before a recession that really hurts this company. He thinks that at this time, there are better industries and better places to be. No auto makers show up in his screens at this time. Majors like Toyota would be a better bet than Ford, but at this time, this is too tough an industry. A recession will be a big negative for all these companies, but the stronger ones will survive. He thinks that in major cities, car sharing is making the two-car family a thing of the past. Millenials are also not owning cars to the degree that earlier generations did, partially because of car sharing and partially because of scooters and bikes. Global auto demand is declining.

Ford Motor (F-N)
September 4, 2018

Ford has discontinued most of its sedan models for North America. More significantly, Moody’s has downgraded Ford’s credit rating and put it on negative credit watch. He has seen this movie before. He thinks Ford will survive. He thinks the debt level is not onerous. However, Ford has eliminated its dividend in the past to survive and he thinks a prudent management will want to cut its dividend now, before a recession that really hurts this company. He thinks that at this time, there are better industries and better places to be. No auto makers show up in his screens at this time. Majors like Toyota would be a better bet than Ford, but at this time, this is too tough an industry. A recession will be a big negative for all these companies, but the stronger ones will survive. He thinks that in major cities, car sharing is making the two-car family a thing of the past. Millenials are also not owning cars to the degree that earlier generations did, partially because of car sharing and partially because of scooters and bikes. Global auto demand is declining.

Lorne Steinberg
President & Portfolio Manager, Lorne Steinberg Wealth Management Inc
Price
$9.470
Owned
No
BUY
BUY
September 4, 2018

Everything is going right for ING. It is growing earnings by 10% and it offers a healthy dividend yield. European financials have been under pressure, but ING is extremely well capitalized and it is benefitting from the European recovery. They are a retail bank with no exposure to investment banking. There are no messes at ING. This is a clean company trading at less than 10x earnings. He sees it as an extremely compelling long-term investment.

ING Groep NV (ING-N)
September 4, 2018

Everything is going right for ING. It is growing earnings by 10% and it offers a healthy dividend yield. European financials have been under pressure, but ING is extremely well capitalized and it is benefitting from the European recovery. They are a retail bank with no exposure to investment banking. There are no messes at ING. This is a clean company trading at less than 10x earnings. He sees it as an extremely compelling long-term investment.

Lorne Steinberg
President & Portfolio Manager, Lorne Steinberg Wealth Management Inc
Price
$13.400
Owned
Yes
DON'T BUY
DON'T BUY
September 4, 2018

Still has way too much debt, as they have had for too many years. He likes the new management changes. The CEO has been doing a good job. Aircraft is in a good place now. They have raised some cash recently, by a building sale or a sale-and-leaseback. This is probably a good time in the cycle for Bombardier, but the only way this company can create long-term value is to figure out how to get their debt down and generate free cash flow. If he owned the stock, he MIGHT hold it, especially because of rumours that they might sell a division (transportation), which could create shareholder value.

Still has way too much debt, as they have had for too many years. He likes the new management changes. The CEO has been doing a good job. Aircraft is in a good place now. They have raised some cash recently, by a building sale or a sale-and-leaseback. This is probably a good time in the cycle for Bombardier, but the only way this company can create long-term value is to figure out how to get their debt down and generate free cash flow. If he owned the stock, he MIGHT hold it, especially because of rumours that they might sell a division (transportation), which could create shareholder value.

Lorne Steinberg
President & Portfolio Manager, Lorne Steinberg Wealth Management Inc
Price
$4.200
Owned
No
DON'T BUY
DON'T BUY
September 4, 2018

This is a big player in recycle paper products and tissue. This is, historically, a very well run company. It is a cyclical business. They have a manageable level of debt, but a cyclical business should have a stronger balance sheet. They are currently suffering from tissue prices and not getting enough from recycled products, so they are facing margin pressure. He likes the company but there are better places to invest.

Cascades Inc (CAS-T)
September 4, 2018

This is a big player in recycle paper products and tissue. This is, historically, a very well run company. It is a cyclical business. They have a manageable level of debt, but a cyclical business should have a stronger balance sheet. They are currently suffering from tissue prices and not getting enough from recycled products, so they are facing margin pressure. He likes the company but there are better places to invest.

Lorne Steinberg
President & Portfolio Manager, Lorne Steinberg Wealth Management Inc
Price
$13.170
Owned
No
BUY WEAKNESS
BUY WEAKNESS
September 4, 2018

He would not buy this because the stock has done incredibly well. A slowdown in housing in Canada will affect all the banks. There is not much negative to say about ScotiaBank. They have investments in emerging markets, especially Latin America, which could cause them a bit of pain, but this would create opportunities for investors rather than taking down the bank. Scotia has a strong retail presence in Canada. It will ride up and down a bit with the economy and currency. He sees this company as a well-balanced operation. He just wants a better entry point.

Bank of Nova Scotia (BNS-T)
September 4, 2018

He would not buy this because the stock has done incredibly well. A slowdown in housing in Canada will affect all the banks. There is not much negative to say about ScotiaBank. They have investments in emerging markets, especially Latin America, which could cause them a bit of pain, but this would create opportunities for investors rather than taking down the bank. Scotia has a strong retail presence in Canada. It will ride up and down a bit with the economy and currency. He sees this company as a well-balanced operation. He just wants a better entry point.

Lorne Steinberg
President & Portfolio Manager, Lorne Steinberg Wealth Management Inc
Price
$75.190
Owned
No
BUY
BUY
September 4, 2018

This is a large European insurance company with large US operations. It has a healthy dividend that is well-covered by its cash flow. They are suffering from the flat yield curve but they are the cheapest among the major global insurers. Trades at half of tangible book value. The company has survived through bad times, it operates conservatively and he sees it as having significant upside potential. His target valuation is double the current share price.

Aegon N.V. (AEG-N)
September 4, 2018

This is a large European insurance company with large US operations. It has a healthy dividend that is well-covered by its cash flow. They are suffering from the flat yield curve but they are the cheapest among the major global insurers. Trades at half of tangible book value. The company has survived through bad times, it operates conservatively and he sees it as having significant upside potential. His target valuation is double the current share price.

Lorne Steinberg
President & Portfolio Manager, Lorne Steinberg Wealth Management Inc
Price
$6.010
Owned
Yes
BUY
BUY
September 4, 2018

This is one of the largest South Korean banks. Like Canada, there is a small number of very large banks. The Korean economy has been improving, but the banks are dropping. This bank sells at about half of book value. They all benefit from a decent Korean economy and are major banks to the large Korean companies like Samsung.

KB Financial Group (KB-N)
September 4, 2018

This is one of the largest South Korean banks. Like Canada, there is a small number of very large banks. The Korean economy has been improving, but the banks are dropping. This bank sells at about half of book value. They all benefit from a decent Korean economy and are major banks to the large Korean companies like Samsung.

Lorne Steinberg
President & Portfolio Manager, Lorne Steinberg Wealth Management Inc
Price
$45.450
Owned
Yes