Latest Stock Buy or Sell? Make More Informed Decisions!
Today, The Panic-Proof Portfolio (Stockchase Research) and Brian Madden commented about whether ONEX-T, MX-T, GIB.A-T, FNV-T, BEI.UN-T, ATD.B-T, EIF-T, TRZ-T, REI.UN-T, CNQ-T, OTEX-T, PXT-T, CAR.UN-T, NPI-T, BYL-T, ENB-T, HRTG-N, MTG-N, UVSP-Q are stocks to buy or sell.
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Premium content
TOP PICK
Stockchase Research Editor: Michael O'Reilly The company is a regional bank and trust company operating in Pennsylvania. It’s recently posted earnings and stock price put the PE at 12.5, well under sector and market levels. It is also trading at less than 70% of book value. Earnings for 2021 are expected to grow by over 40%. We like the dividend yield, which has only a 65% payout ratio. We would trade this with a $14 stop-loss. Yield 5.07% (Analysts’ price target is $19.75)
Financial Services
Premium content
TOP PICK
Stockchase Research Editor: Michael O'Reilly MTG provides mortgage insurance in the US, Puerto Rico and Guam. The company released an operational update to end-August indicating the inventory of delinquent loans continues to decrease, with the % of new delinquency notices dropping by over 25% since June. It trades at 69% of book value and EPS is expected to grow to $1.50 per share from $1.44 this year. While still levered to an economic recovery, we make this a Top Pick. The yield is supported by a payout ratio of less than 10% of cash flow. We would trade buy this with a $7.00 stop-loss. Yield 2.69% (Analysts’ price target is $12.43)
finance
leasing
Premium content
TOP PICK
Stockchase Research Editor: Michael O'Reilly The company provides personal and commercial residential insurance through the Atlantic coast and Alabama and expanding into Mississippi. Recent annual earnings showed a 10% increase in revenues and EPS has grown to $0.42 per share from a 2019 average of $0.02. Analysts look for EPS to grow over 40% next year. It trades at 83% of book value. It pays a small dividend that is well supported by cashflow. We would trade this with a $11.50 stop-loss. Yield 1.94% (Analysts’ price target is $17.00)
insurance
COMMENT
The recent sell-off Historically, September strikes fear in investors. We some tremors mid-last week in tech stocks. There are three meanings: 1) the ghost of September is haunting us and foretelling volatility in the COVID year and amid U.S. elections; 2) the cracks in the tech stocks foreshadows a long-awaited rotation into growth and cyclical stocks; and 3) the recent sell-off means nothing at all and sell-offs in FAANGs like Apple are a blip as these stocks continue to rise. Make sure your portfolio is positioned for any of these fates.
BUY
Consolidation in pipelines coming? No, not likely. There are ENB and Transcanada which dominate this space, plus regional players like Pembina. There was a flurry of M&A three years ago, but he doesn't see that appetite now. ENB has been shaking off non-core assets to reduce debt and strengthen their balance sheet. ENB is recession-resilient. Today, they finally got approval to reopen their line in Michigan. Expect modest organic growth in their gas business. Their renewables are small, but growth and are important for the future--pay attention to this. Finally, the biggest catalyst is the line 3 replacement. Pays a 7.8% yield.
oil
gas pipelines
BUY
A safe dividend payer. ENB also. Likes its stable contracts and cash flows, and is a leader in renewable projects in Asia, Europe and North America so it's geographically diverse. Good. Also pays a healthy dividend around 3-4%. In the past year, renewable stocks have been a bullseye for investors as ESG gathers strength.
Utilities
PARTIAL BUY
Money flows from cyclicals to defense if a vaccine comes in 2021? Residential property REITS have been resilient in the REIT space. Likes and respects this company. The bigger secular stories are demographics, immigration and urbanization. CAP managers have executed well for many years. Short-term, this is low beta. So, if there's a massive recovery (via a vaccine), money will flow from REITS like this as well as tech. But long-term, this is a proven value creator.
investment companies
funds
COMMENT
Silver outlook after recent run-up He's not a commodities expert, but gold and silver are in primary bull markets. Gold is enigmatic, especially--so, obey what the charts tell you. This means, when gold makes moves, it makes BIG, bold moves, not small ones. Gold could go much higher in years to come. Silver is like high-beta gold with fewer markets and less participation from central banks and ETFs. Silver has more industrial uses than gold, so if there's a broad recovery, silver should do well. We're in the early stages of a recovery, and he expects gold and silver to do well.
HOLD
The stock is mispriced, because it's mid-sized, doesn't carry a huge weight in the TSX and has little analyst coverage. It's been dragged down by apathy towards all oil, an unloved sector. But he still buys it, and he expects better commodity prices and/or weaker companies will fade and investors will realize that Parex is a cash-rich, resilient company. Be patient.
oil
gas
PAST TOP PICK
(A Top Pick Sep 04/19, Up 9%) Provides software to medium/large businesses. It does cloud and content management for companies, so demand is high. 80% of revenues are recurring with high margins. They're seeing strength in government and healthcare. Their Q4 2020 earnings blew past estimates, growing an impressive 11% YOY during a recession. Continues to buy it.
computer software
processing
DON'T BUY
Rumours that the Air Canada deal will fall apart and someone will take Transat private The whole airline sector is facing difficulty now. Air Canada's takeover offer likely won't offer given the pandemic. Transat's revenues are down nearly 98% last quarter and begging Ottawa for help. A private take-out is possible; who knows? Airlines are uninvestible now.
Transportation
COMMENT
When to sell a stock? First, you'll be right and wrong when selling stocks in your lifetime. Don't be emotional over a loss, but determine why--important. Other times, take profits when you have a major winner, but keep a core position. Other times, you rightly thought that a stock would grow, but now the valuation is rich and the catalysts for growth have gone--take your winnings and buy something better.
