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COMMENT
Veritas saying get out of Canadian banks. We've heard this "cry wolf" for over a decade. Veritas tend to be short analysts. Bank sector is slowing down, but to predict a precipitous drop is really sticking your neck out. Mortgage lending is slowing, interest rates are lower. But they're still making money and have attractive dividends. Doesn't expect big surprises in loan losses. It's fear-mongering. But growth is muted for sure, so he doesn't own any. Plus, they're expensive price to book. There will be loan losses with oil and gas, but sees no ticking time bomb out there.
WATCH
Tough business, and they've navigated well, but there's only so much you can do. Now they've pivoted into packaging. Big learning curve. Made a few acquisitions that they're trying to integrate. They paid a hefty price to get in, and there are some big players. May take a few years to hit their stride. It's a show me story. Watch results to see things stabilize.
publishing
printing
BUY
Cutting dividend was symbolic. Stock buyback stopped, he's not sure why. There's a turnaround taking place. Bit of a mountain to climb, as it's a global market with big players. They have a valuable asset. Closing unprofitable plants. Hopefully we'll start to see the fruit. Solid balance sheet. World leaders in many segments. Hang on, especially at this price, and he'd be buying more.
INDUSTRIAL PRODUCTS
HOLD
Long-term holders of it. Really like it. Excellent track record in investment management returns. Acquiring assets to diversify out of Canada. Distribution business for mutual funds and insurance, which is extremely profitable. His valuation is in the low 30s. Rock solid balance sheet. No debt. One of the asset managers that's performed the best in this market.
investment companies
funds
HOLD
Excellent operators, but are they also excellent allocators of capital. Underlevered, overcapitalized. Pay a special dividend. Sold it recently, and moved into CCL, as it's more global. North American-centric. Will generate lower revenues and profits from new K-cups process. Organic growth has slowed down. Facing more competition. Hold on if you're a long-term investor, as there may be a catalyst at some point.
packaging
containers
BUY
Leaders in North America. Ridiculously cheap. Management's done a great job over the years. Institutional managers have been bailing because growth has slowed. Value investors are slowly coming in. Hang on at this price. He'd invest at these prices. Really good dividend, huge buybacks. Basically an oligopoly. Steady business over the long run, though lumpy between quarters.
Automotive
COMMENT
PAST TOP PICK
(A Top Pick Mar 27/18, Down 45%) Speed bumps recently. Chinese exports came down. Has regained shelf space at LCBO. Thinks we've seen the bottom. Sales growth has been phenomenal. Biggest market share in grocery channel. Dirt cheap. They're long-term shareholders. They're doing all the right things.
PAST TOP PICK
(A Top Pick Mar 27/18, Up 13%) Second biggest after Chartwell. Safe, defensive play in a volatile market. Attractive growing dividend in low interest rate environment. Trading at a huge, unwarranted discount to the apartment sector. Conservative stock for your portfolio, reasonably priced. Demographic tailwind. Not too much government regulation.
other services
COMMENT
What sector would you put money into now for income? He doesn't normally invest by sector. He looks for opportunities and value. Avoids resources, oil and gas, mining, biotech. Loves renewable energy, energy infrastructure like pipelines, senior living. Tech, consumer staples, and industrials are company-specific. Stay on the conservative side and keep a long-term perspective.
