Latest Stock Buy or Sell? Make More Informed Decisions!
Today, Bryden Teich commented about whether CNQ-T, INTC-Q, MTL-T, BRK.B-N, CJT-T, GC-T, MTY-T, ATRL-T, LNF-T, SU-T, META-Q, ARX-T, CCL.B-T, BBU.UN-T, VET-T, WIR.UN-T, QSR-T, GIB.A-T, CTC.A-T, MFC-T, CM-T, AW-T, FSV-T, MSFT-Q are stocks to buy or sell.
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COMMENT
2019's broad-based rally impresses him, particularly the global nature of it with Europe making new highs. It feels different heading into past years. In 2020, the US dollar will struggle--Canadian investors are now very overweight the US dollar and US stocks, so they should reduce exposure heading into 2020, because he expects the US dollar to roll over. Meanwhile, the US deficit keeps growing. There's still good growth there, but they have expanded the deficit 5% to gain 2% economic growth. Investor sentiment is so bullish that we're not in an overbought market. Hold onto some cash for an opportunity in 2020--it's always great to buy when everything is negative. Shifts in sentiment can be big.
BUY ON WEAKNESS
MSFT vs. Intel vs. Facebook Facebook has performed well, but faces long-term regulatory headwinds. They will face more scrutiny. Intel has bigger headwinds reagrding where the technology is heading with microchips. Their legacy hardware chips will be under secular pressure. Don't buy. MSFT's cloud growth is impressive and will continue (he sold his shares already), but its multiple is really high. In the next pullback, buy MSFT. MSFT wins.
computer software
processing
WEAK BUY
A fine growth by acquisition story, buying in the US. Lots of insider ownership, too. Managers are great growing FSV. He sold his shares when the multiple rose; margins don't get high in this business. This is still a good long-term opportunity. A few weak quarters have made this worth looking at.
other services
PARTIAL SELL
Used to own it until the valuation got too high. They've done a great job spinning out the real estate into a royalty stream. But this has gone parabolic this year as its growth has slowed. Take some profits. There's limited growth, but they are benefiting from declining interest rates. This doesn't make the top of his list of income streams. Pays a good dividend. Don't need to sell this, but don't need to buy it either.
food services
DON'T BUY
CM vs. MFC They were late to get US exposure, which hurt them. Also, there's negativity towards CM's mortgage book. TD and RY remain the top Canadian banks, not CM. TD & RY are investing in tech, the future, which is smart. MFC: The lifecos have done well diversifying into asset management and into Asia. But with low interest rates, pricing insurance gets tougher and limits growth. You own lifecos for Asia and wealth management. Not CM, but buy TD and Royal.
banks
BUY
MFC vs. CM They were late to get US exposure, which hurt them. Also, there's negativity towards CM's mortgage book. TD and RY remain the top Canadian banks, not CM. TD & RY are investing in tech, the future, which is smart. MFC: The lifecos have done well diversifying into asset management and into Asia. But with low interest rates, pricing insurance gets tougher and limits growth. You own lifecos for Asia and wealth management. Not CM, but buy TD and Royal.
insurance
DON'T BUY
A short report recently has pressured shares and are now under 10x earnings, cheap. Their problem is that they were slow getting e-commerce. If you don't have good e-commerce, a store is treading water. But the bad news is already priced into the stock price. He prefers Leon's Furniture for buying the Brick and paying off most of that debt. Good return on capital and huge insider ownership.
specialty stores
DON'T BUY
Had a good run in mid-2019. They grew international presence with Popeye's and Burger King, a good job. The issue remains Tim Horton's weak same-store sales growth, though QSR is doing well upgrading Horton's stores and expanding food offerings. Another issue remains the franchise owners vs. the corporate head. QSR also trades at a high multiple. Considering buying if this falls $10. Otherwise, don't buy.
food services
PAST TOP PICK
(A Top Pick Nov 28/18, Up 16%) A great way to get exposure to US industrial and e-commerce (Amazon is a big customer). They've done a great job acquiring proprties in Chicago, Milwaukee and Minneapolis, the mid-heartland of American industry. It trades at close to book. Pays 5.5% dividend yield. He continues to buy at these levels.
0
PAST TOP PICK
(A Top Pick Nov 28/18, Down 27%) Sold it in June and bought Arc. Liked it because they were exposed to European natural gas prices, and are they're good at growing their dividend. But their multiple got too high. VET remains a good company. The dividend is near 14%, but he thinks the stock will rise if they reduce the dividend.
oil
gas
BUY ON WEAKNESS
Long-term in a non-registered account One of the better return-on-capital companies in Canada, and historically a strong performer. They've done well diversifying internationally. But CCL will get hit over fears of global growth. Also, a recent bad earnings report hurt the stock. Long-term, this is good to buy, now when the price is depressed.
packaging
containers
STRONG BUY
Arc vs. CPG A high-quality energy company. This used to be a $30 stock. A very well-run company, trading at historically low multiples and pays nearly a 7% yield. They operate in a great location, run by fine managers. Not too much debt. This remains a screaming buy at these levels. If there is a lift in oil sentiment, this will easily rise past $10. Better than CPG.
oil
gas
BUY ON WEAKNESS
Future growth as a long-term hold, despite regulatory risk? It has been volatile and under regulatory microscope, which won't change. But they've had some good quarters and impressive user growth. They still need to monetize Instagram and Whatsapp, which will amount to more revenues. He expects FB to turn more to the payments space. With shares around $200, buy this when FB stumbles under Congresional pressure, not at current levels--the positivity has been priced in. He prefers other tech stocks.
Technology
