Latest Stock Buy or Sell? Make More Informed Decisions!
Today, Jason Mann and Bryden Teich commented about whether BAC, CVE.TO, CVS, BBU.UN.TO, VET.TO, WIR.UN.TO, WPM.TO, PXT.TO, ECA.TO, TRI.TO, BXMT, KEY.TO, ALA.TO, AMZN, TCN.TO, GE, AAPL, LB.TO, TD.TO, SU.TO, C, JPM, ARE.TO, GWO.TO, WN.TO, CPG.TO, META, TOU.TO, BAM.A.TO, RUS.TO, MRE.TO, WTE.TO, KXS.TO, CIX.TO, OSB.TO, ERF.TO, FTS.TO, CP.TO, TOY.TO, ACN, GS.TO, MEG.TO, AQN.TO are stocks to buy or sell.
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DON'T BUY
Considering the GM plant shutdown He held auto parts stocks for several years until the spring. He no lonege own this. This sector has had poor price momentum, and he sees continued pressure even after NAFTA being resolved. It's cheap at 5x PE. Has the weaker balance sheet vs. Magna and Linamar.
metal fabricators
WEAK BUY
Which Brookfield stock to buy? Tough call, because they're always priced at a premium and they are prolific stock issuers (which could knock down a stock). He'd choose BAM'A: stable with good price momentum. BPY is his second choice. To be honest, he sees better value in non-Brookfield REITS and infrastructure companies.
managementdiversified
WATCH
He owned it last year. It lost its price momentum but it cracked due to privacy issues and they missed earnings. All tech stocks have struggled since FB's earning report in the summer. But it's now reasonably priced. FB was never massively overvalued like, say, Netflix or Amazon. Great ROE at 28%. It's a little pricey at 18x PE, but it's expected to grow 30-40% in 2019. It's close to a level where he'd buy it again.
Technology
COMMENT
He had shorted it, but it's fallen too far, too fast. CPG's challenge is an asset base that isn't producing cash flow relative to debt (also facing many overlevered energy companies). Terrible price momentum and very volatile. He's neutral on this. He needs to cash flow return and momentum to stabilize to get interested.
oilgas
COMMENT
Interest rates: why do Feds keep referring to historical rates? Historically, back to 1947 interest rates in the U.S. were 2.7% on the 10-year (close to current levels). Rates went from 2.7% to 7.7% over the next 20 years. Traditional bonds fared the worst, but stocks did fine, annualizing at 6-7%. So, stocks can bear rising rates as long as it's not a shock. That's why Powell and certainly Trump want a pause to see hikes digested. Interest rate cycles are nothing new.
TOP PICK
He's playing defense, expecting more volatility. It's really a holding company with businesses in real estate (Choice Properties REIT), the bakery and Loblaw. Very stable. This is a cheap way to play Loblaw, which has had a good run lately. Loblaw shareholders received shares of Weston and have been selling them. This has opened a 13% discount to its fair value. Price momentum is its only knock, but he sees a catch-up trade here. (Analysts’ price target is $110.59)
Jason MannOwned
food processing
TOP PICK
As rates rise, lifecos do well. GWL is now a value pick with low volatility. He likes its middling price momentum and solid 21% ROE. 1.4x price to book (vs. historic 2x), and trades at 7x earnings. Pays 5% yield and deecnt payout ratio. But they need to show they can redeploy capital into growth--they got the balance sheet to do that. (Analysts’ price target is $34.50)
Jason MannOwned
insurance
TOP PICK
It had a rough ride lately, because Ottawa killed a Chinese deal earlier this year. It now scores in the top 2% of his valuation. It's picked up strong price momentum. They have a huge backlog of projects. Well-positioned. (Analysts’ price target is $22.15)
Jason MannOwned
contractors
COMMENT
The US Fed Reserve decision today puts the market on a different path for the rest of the year. Rates are just below the “neutral range” said the Fed, which caused a massive market rally. A rate hike in December is still probably priced in. He thinks the US Fed should be hiking with the state of the hot domestic economy. Trade tensions could heat up again with a weekend G20 meeting of world leaders. He thinks there have been positive statements out of the US ahead of the meeting that a deal might be struck with China – but expect the unexpected. He continues to like Canadian Financials and Industrials.
Bryden TeichUnknown
COMMENT
JP Morgan vs Citi Group – He likes the American banks. They took profit on JP Morgan a while ago although he thinks it is a more premium holding. CITI is a cheaper stock and he thinks they are planning to do a share buy-back. He prefers to own Bank of America.
Bryden TeichUnknown
Financial Services
BUY
He owns TD and it will report tomorrow. This along with Royal Bank are the two premium Canadian banks. He expects earnings in TD to be as strong as that for Royal relatively speaking. Yield 3.5%.
Bryden TeichOwned
banks
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