BUY
The lifecos are attractive after this correction. Solid businesses. SLF has a big U.S. asset management operation. But she prefers (and owns) MFC which has a better valuation. In the past. SLF's earnings have outgrown MFC's, but MFC's should outpace SLF's going forward. MFC trades at a discount to SLF.
COMMENT
She doesn't invest in ETFs and isn't familiar with this. If you want to play US banks, then an ETF could work though this one is hedged to the CAD, which she doesn't like. She prefers individual U.S. banks like JPM.
DON'T BUY
She doesn't follow this closely. She owns nothing in auto parts, because the U.S. auto cycle has likely peaked and things in Europe are slowing.
DON'T BUY
She used to own it. They've had issues of reinforcing royalty payments in China, and now have a dispute with Apple. Too much uncertainty over how they protect their patents.
BUY
Will this correction in Canadian banks continue? They've all been down 5-10% this year. TD just reported strongly with earnings up 13% YOY. TD was questioned about energy and residential loans. The former are well-contained, and mortgage growth is in the single-digits. TD is attractively valued; all the Canadian banks are below historic price-to-earnings or -book. In 2019, she expects all the Canadian banks to catch-up to these metrics. All have increased their dividends. TD has a 45% payout ratio. This year, the banks have been reflecting a lot of bad news, but next year she expects them to catch up. She'd buy TD now.
COMMENT
POW or PWF for income? Owns PWF for the yield. Neither stock has done much. PWF owns Investors Group and GWL, a solid insurance company. IG had to disclose their fee structure, which was a negative, but is now slowly improving. You can own PWF for the yield, but there's been little price movement. POW owns PWF. The discounts to NAV are wide; she's unsure what the catalyst will be to narrow that. Both dividends are safe.
COMMENT
POW or PWF for income? Owns PWF for the yield. Neither stock has done much. PWF owns Investors Group and GWL, a solid insurance company. IG had to disclose their fee structure, which was a negative, but is now slowly improving. You can own PWF for the yield, but there's been little price movement. POW owns PWF. The discounts to NAV are wide; she's unsure what the catalyst will be to narrow that. Both dividends are safe.
DON'T BUY
She doesn't own this sector because of concerns (peak auto, tariffs, GM closings). But if she were to buy this sector, this would be her choice, because they have a global presence, especially Europe where they can improve their margins.
DON'T BUY
Transitioning from hardware to software and seeing some growth. The valuation is attractive, but other names in this tech space are better.
TOP PICK
A defensive play. They're well-positioned in western Canada even with the low oil prices; they're still drilling there. They operates pipelines, processing plants, midstream operations. This year, they enjoyed strong cash flow growth and they believe they can continue to grow that by 10% annually over the next few years, and grow their dividend by 10%. Strong balance sheet with a 53% payout ratio. (Analysts’ price target is $54.11)
TOP PICK
She bought it during the October pullback. Their cloud service is second only behind Amazon. They've transitioned their Office products to become a recurring revenue stream. Definite growth will continue. Strong balance sheet with $7 net cash/share. They can fund their growth without taking on debt. (Analysts’ price target is $125.63)
TOP PICK
A pure water player--transpor and treat water, a scare commodity. It's pulled back to a good entry point now. Good growth in the U.S. where they refurbish their water infrastructure Emerging markets are 20% of their revenues where they are still building their infrastructure, so that's another plus. (Analysts’ price target is $78.47)
COMMENT
Today, we gave back impressive gains in the morning after Trump had a closed-door meeting today. That rattled investors after the day opened strong. We finished flat or in the red. Investors are now amplifying any bad news and muting the good. That's in contrast to earlier this year. For investors, don't emotional. He holds a lot of cash, from 40-60%, though it isn't fun to hold this much cash. Markets are unnerving now. Breaking news: Huawei's CFO is granted bail. He certainly didn't like reading that Huawei news last week or today's news of a Canadian citizen arrested in China. Canadian companies like Lululemon could face serious resistance selling in Chinese markets. But he thinks this is all a lot of fury that won't stick, and creates buying opportunities.
COMMENT
Huawei CFO just released on bail; she must stay in Vancouver It doesn't help resolve US-China trade talks, despite White House denials that it is. This is already spilling over--Bell and Telus have invested a lot in the Huawei 5G wireless network and it could cost a fortune to rip out.
WAIT
He got into DOL a little late, then lost money right before the summer short report. He sold. DOL has been increasing prices very slowly, but so has Walmart. Bay St. is still positive on DOL. Wait until tax-loss selling is over and see what happens. DOL still has room to grow in Canada. He isn't worried about Dollar Tree being a competitor in Canada.