Daily Stock Opinions and Ratings

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Today, Brian Madden commented about whether TCL.A-T, FNV-T, PXT-T, BCE-T, GOOS-T, ENB-T, TFII-T, ATD.B-T, CURA-CSE, QBR.B-T, STN-T, MFC-T, LIF-T, NA-T are stocks to buy or sell.

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COMMENT

New CEO. About as textbook a succession planning as you'll ever see. Louis Vachon leaves pretty big shoes. It's been the best performer of the big 6 banks under his tenure. New CEO has been the COO, career NA employee for 23 years, digitally savvy, ran capital markets, known to the board and investors. Business as usual under his watch.

COMMENT

Canadian banks today. Likes the Canadian banks on any day that ends in "y". Owns 3 of them as core holdings, and expects they will be for years to come. Stable oligopoly, great governance, great franchises diversified by geography and line of business, probably another year of record profits. Continue to own and buy.

COMMENT

Markets - worry vs. moving higher. It's true. A lot of people spend time chasing their tails worrying about the next crash. Corporate profits grow alongside the economy, and so markets make new highs. The pandemic recession was nasty and broad, but short, followed by a swift recovery with strong housing, record sales, strong industrial production, employment gains. Stocks aren't really that expensive. One of the most stable metrics of value is book value. TSX trades at 2.2x book value, a bit of a premium to 35-year historical average of 1.9x. But you have to look at what you're getting in ROE, which is pretty strong right now with the TSX cranking out about 11% of ROE. Market is fairly valued, so we should have returns in line with long-term averages, which are high single digits. His job is to try to beat the average by identifying stocks, sectors or themes that the market is mispricing.

BUY

One of the premier income stocks on the TSX. North of a 10% yield over the last 5 years. Very long reserve life. Low risk operating model, except for the cyclical commodity pricing. Quality asset. Buy it here pretty comfortably.

BUY

Likes it, continues to buy. Geographically well diversified. Q2 earnings last week look tepid on the surface. Earnings grew 6% Y/Y. Grew organically 17%, and this is respectable. Global wealth and asset management grew 50%. A secular grower. Undemanding valuation. Trades at 7.5x earnings. Good combination of quality, growth, value. Yield of about 4.5%.

COMMENT

OSFI restrictions being lifted? Tough call to say when handcuffs will come off. Probably after October, but a chance that it will be pushed out to 2022. When you buy quality businesses, you're not renting them for a day or a week. You own them for the long term. So whether the dividend increase comes in November, or not until January, is neither here nor there.

BUY ON WEAKNESS

Good operator. Serial acquirer, and he's not averse to this. Went sideways for a while. Last 8-9 quarters, meaningfully beating estimates. Now back in gear. This space is advantaged by big US infrastructure spending. A bit of ahead of itself. ROE is about 13%. You could buy on a meaningful pullback. Not his favourite horse in the sector, which is SNC.

DON'T BUY

He owns BCE and Telus instead for income. At this point in the cycle, and just looking at total return, he wouldn't own any telcos. Better opportunities elsewhere for capital gains in the value and cyclical areas. Not a pure play telco. Not the biggest or most diversified. Commends what they're doing with the business.

BUY

Results reported yesterday were good. Elephant in the room is is what happens with US cannabis regulations. Impediment to greater profitability is they can't deal with mainstream banks, so cost of capital is higher. Plus, illegal federally, so pay astronomical tax rates. Regulations will eventually change. Best of breed.

PAST TOP PICK

(A Top Pick Aug 04/20, Up 11%) Consistent grower and outperformer of the TSX for 24 years. Now a big player in the US and Europe. Moving into Asia. Stepping up merchandising sophistication, which will drive organic growth and be reflected in a stock re-rating in the multiple. Good things in the pipeline. Another deal before year's end wouldn't surprise him. Continues to buy.

PAST TOP PICK

(A Top Pick Aug 04/20, Up 141%) On rocket fuel during the pandemic. Benefits from e-commerce. Market conditions are tight, hard to get trucks and drivers, so rates are going up which benefits the bottom line. Not expensive. Great grower. Happy to buy.

PAST TOP PICK

(A Top Pick Aug 04/20, Up 21%) He sold in February, though may have left some money on the table. Challenging to grow, growth pace might get cut in half. Empowered NIMBY obstructionists on both sides of the border. Put profits into opportunities that have done better.

COMMENT

Financial planning for your TFSA. Look at portfolio construction, risk management, asset allocation, and income planning. TFSA is the most tax advantaged form of account that exists in Canada. Put your highest expected return securities in that portfolio. Don't let cash just sit in your TFSA, as those dollars should be working hard for you. Flipside of return is risk, and the two go hand in hand. Do your homework, and buy if you have conviction. CURLF is an example of an equity that would fit a TFSA. See today's Top Picks for 3 more suggestions.

BUY ON WEAKNESS

The goose is getting cooked today. Low point in the calendar for them. Calendar Q3 and Q4 are the big quarters. Sales were better than expected, smaller loss than expected. Stock was priced for beating expectations, and it didn't. Overseas sales are strong, comfortable with outlook, long-term secular growth, strong brand. A buying opportunity.

BUY

Good stock to own for income. Pretty competitive dividend yield. Roaming charges will be coming back. 5G opportunities, in spite of capital costs. You can buy it here.

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