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He used to own it to get exposure to Canadian natural gas. Assets and management are superb, and pays a fine dividend. However, at the start of March, he changed his outlook given how tough a sector energy was and gas demand was uncertain. He sold all his energy stocks and put his money into CNQ. Arc is still a good company. If you hold, be patient. When energy improves, so will Arc's stock.
Suncor vs. CNQ Both great Canadian energy stocks. He has owned Suncor and currently owns CNQ as his only energy stock. CNQ maintained its dividend throughout the lockdown, while he believes Suncor lowered theirs to protect their balance sheet. He likes CNQ in energy---you still get a nice yield. Suncor and CNQ will do well long term. Suncor will do well if the energy space improves. He owns 3.5-4% energy on the low side, but you don't want to own too much or too little energy. About two years ago, SU's refining assets were doing really well and got a premium valuations, so maybe that's why the stock has unwound recently.
He has owned CVS instead in the past. This and WBA have been hit hard in recent years from a lingering concern over pressure on drug prices in the U.S. So, both have expanded into drug distribution, not just drug retail. The multiple that the market will pay for either has compressed. So, he prefers other stocks in this space, like Loblaws (which owns Shoppers Drug Mart) Drug. Traditionally, drug retailing is a stable business, but in the U.S. the pricing issue remains an overhang.
The residential sector of real estate is still in a good spot with high occupancy. The concern in March-April feared renters wouldn't make payments, and this concern is still priced into these stocks. But cash flow is still one of the best performers in real estate. Likes BEI's exposure to western Canada and have great assets. Capex spending will be lower in years to come. He also own Interrent which owns properties in Ontario and Quebec. Also own WPT REIT in the industrial space. BEI is trading at a big discount to NAV.
In the past year, the shares have gone parabolic along with the Tesla rally. Too volatile and speculative for him. He prefers predictable cash flows.
It'll continue to benefit from work from home. Cloud computing will remain important. It'll be more and more important for them to upsell higher services to their customers. He prefers, likes and uses (in his office) CTXS which offers more office functionality than Dropbox currently. CTXS is also in the cloud business. Dropbox is seen as a platform to share documents, but the companies that will do well in this space are those that enhance office productivity.
Bought it in March after they bought a videoconferencing company. He'd been watching this stock and their great track record of purchases. They're a Canadian tech consolidator, though smaller than CSU in market cap. They have incredibly consistent cash flow that they deploy well with purchases. The shares are being re-rated because of their videoconferencing exposure. Enghouse will continue to benefit from work from home. He sees a lot of organic growth ahead. Really likes it, enjoying great tailwinds. (Analysts’ price target is $89.67)
