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TOP PICK
Very compelling investment with double digit cashflow yield. 15x earnings with a 5% dividend yield. Should go up a lot in the near term. (Analysts’ price target is $18.00)
Alex RuusOwned
Financial Services
TOP PICK
Largest operator in North America of lumber mills. After a decade of low lumber prices, Canadian lumber capacity has severely curtailed. This gives the backdrop for huge cash flows out of forest products area. Trading at 2x 2021 earnings. Could double over the next year. (Analysts’ price target is $43.00)
Alex RuusOwned
west coast forestry
BUY ON WEAKNESS
Precious metals is an area of long term opportunities. We saw a great run for a couple years but in the last year, it has gone sideways to down. Enthusiasm has waned and is affected by the bitcoin craze. If Bitcoin loses sails, the inflation hedge money will come back to precious metals. Outlook for gold is good in the next years with governments adding debt. Trading at a low valuation. Has a compelling free cashflow. There is political risk however. Will perform better once gold picks up.
managementdiversified
PAST TOP PICK
(A Top Pick Mar 20/20, Up 77%) Picked it again for top pick. Biggest holding in his portfolios. Very undervalued company in the oil and gas area. Generates huge amounts of free cashflow with 5% dividend. Trades at half the valuation of other royalty companies.
Alex RuusOwned
Financial Services
PAST TOP PICK
(A Top Pick Mar 20/20, Up 33%) A great free cashflow story. One that certain people do not want to invest since it is oil and gas. However, it is rather an energy storage. The company generates increasing free cash flow. Pays a 4% dividend and trades at 6x EBITDA, which is half what other alternative power generators trade for. A big position for them.
Alex RuusOwned
INDUSTRIAL PRODUCTS
PAST TOP PICK
(A Top Pick Mar 20/20, Up 52%) Has owned it for a very long term. Second biggest health insurer. Provides health care insurers to individuals, corporations and governments. Gets best value for the money. Over time, has grown a lot. Biggest owners of Blue Cross and Blue Shield. Pays a nice growing dividend. Still undervalued here.
Alex RuusOwned
medical services
COMMENT
Second half of the year. We have had a great run in the market. We have gone from a scary situation last March to getting out of the pandemic. Many companies have thrives through this year as well. Markets have done well and over the last year, the best strategy was to buy companies that were growing, irrespective of whether it was making money. This year will be different where stock picking will be very important.
Alex RuusUnknown
COMMENT
Growth versus value. Usually putting stocks into two categories is an oversimplification. Has done extremely well by picking stocks that were overlooked by the market and not getting much attention. Focusing on the fundamentals, such as free cashflow and valuation, is a much better way to evaluate stocks.
Alex RuusUnknown
BUY
The free cashflow coming off this stock is phenomenal. Trading at 2x expected earnings this year. Forest product companies are difficult due to the fact they sell commodities. Primarily the owner of lumber mills. There is a shortage of lumber in the NA market due to continual moves by the US against the Canadian lumber industry. American housing is growing but there is not enough lumber which has shot the price up. There has been pullback recently. The cashflow is still huge and the stock is a bargain at these levels. (Analysts’ price target is $49.00)
west coast forestry
BUY
One of the preeminent tech name. Owns this. Falls into the below fair value category. Continues to hold it since 2009. Continues to show accelerated growth despite reaching trillion dollar valuations. No longer as cheap as it used to be, but still good value.
Alex RuusOwned
computer softwareprocessing
HOLD
A leader in transit buses in NA. A good long term growing area. Last year, it got to compelling levels and has rallied off the bottom. The covid scenario has brought questions on the transit area. Usage of cars and gas demand is high. Mass transit is still constrained. We do not know if transit usage will come back to trends. Governments are spending through debt but this will come to a stop at some point.
Automotive
DON'T BUY
A terrific company. The only caution is a possible correction in profitless tech stocks. Lightspeed should be profitable soon but they are valued at a high multiple on sales. Likes what they are doing and where they are going. Better opportunities to put your money to work right now elsewhere. The stock is very expensive.
Technology
DON'T BUY
Has been an unfortunate story. Was a leading player in shale gas in Quebec a number of years. The government came out against it. Has some western Canadian production that has cash flow. Balance sheet is relatively clean. Started talking about carbon capture and storage. There is some insider buying recently.
oilgas
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