COMMENT

Preferred Enbridge shares: If you're looking for a preferred energy stock that pays a big dividend, then look at this. The preferred share market is complicated, some being extremely interest rate sensitive. Others are called "rate resets" which temper the impact of rate increases. ENB preferreds will never go much above $25 (nor fall from it).

PAST TOP PICK

(Past Top Pick Oct. 18, 2017, Down 13%) This hasn't worked out yet. Interest rates have taken a bite out of the valuation of interest-sensitive stocks, and their Line 3 replacement pipeline faced more opposition than he expected. Also, the US Federal Energy Regulatory Commission invalidated the cost of capital advantage that ENB was getting from a complex structure of listed limited partnerships. At least, this will now clean up that messy corporate structure. They are integrating their Spectra Energy deal. The dividend is safe and will grow. Also, the rotation into defensive names like this may be a tailwind.

PAST TOP PICK

(Past Top Pick Oct. 18, 2017, Down 10%) They have a large presence in Latin America in a time when emerging markets are under pressure. But this is also a secular growth opportunity. It now lags the Canadian banks, but the laggard in one year often leads it the next.

PAST TOP PICK

(Past Top Pick Oct. 18, 2017, Up 17%) They do IT outsourcing and consulting. They offer modest, but accelerating organic growth. It's very profitable and generates a lot of cash flow. It does some small tuck-in acqusitions. Continues to like it. A lower-beta stock than its tech peers.

BUY

Likes it. It's the biggest crop nutriens player in the world, specifically potash and nitrogens, segments which are improving rapidly, and phosphates less so. As a condition of their merger, $5 billion assets were sold and those may be re-deployed into retail network expansion in South America like Brazil, a huge market. There's also $500 million in synergies to be captured which they are doing ahead of schedule. Expect dividend growth, acquisitions and share buybacks.

DON'T BUY

He's wary about all cannabis stocks. He buys stocks with real cash flows and earnings, and that pay dividends, instead. How much success is already reflected in the stock prices? The profit margins likely won't evolve like they do in big tobacco (35-50% operating profit margins) or in liquor. Cannabis may evolve to become agriculture growers like corn or soybeans--capital intesive and low margin. There could be more bloodletting in this sector. One day, the dust will settle and these stocks will have a sensible valuation. Until then, own a producer with a unique strategy like medicinal or one with brand building which he doesn't see yet. Too much risk still.

TOP PICK

Sometimes people run for cover when there's a short-seller. In this case, the short-seller has picked up on a lawsuit over a 20-year-old insurance policy which he thinks doesn't have merit. The market has sold first and asked questions
later. After the pullback, the stock has regained 15% and has created a great entry point now. Trading at 1x book value, deeply discounted. 12% ROE, so profitability is solid. Geographically diverse between Canada-U.S.-Asia. Their
welath and asset management division is their golden child, growing nicely. The only weakness is their US legacy business, but they're cleaning it up. The stock should be much higher. (4.36% dividend, Analysts Price Target $29.59)

BUY

Many have been betting that Amazon will crush every brick and mortar retailer, which he thinks is far too simplistic. Shorting a REIT is an expensive carry. Riocan has whittled down their portfolio and made it high grade, including their biggest, a massive $3-billion project in downtown Toronto. They're re-purposing retail space into better use, which will drive up share prices and the dividend yield now around 6%.