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COMMENT
She sees more opportunity in the US than Canada, because quality growth stocks have sold off, opening opportunity. In Canada, energy has held in very well, as have the financials. The Canadian banks outperformed the American ones. Returns for the indices should be higher this year after this pullback, because corporate profits continue to grow and will do so. PEs of the indices have pulled back in the last 15 months, so stocks are more attractive. Everyone is watching the Fed; this is driving inflation. Rates will definitely rise and they have to. Employment has grown faster than expected. The consensus is that the Fed will hike 50 basis points. But if they rise too quickly, the fear is that it will choke off demand. She thinks the Fed will monitor inflation this year before making moves.
BUY
M&A in this space? She can't forecast the M&A activity in this space. PPL prices are up in this rally. She likes Pembina for its near-6% dividend. Whether they merge with another company doesn't weigh on her decision to buy a stock.
Christine PooleOwned
pipelines
DON'T BUY
Are posting strong revenue growth in cloud, but thin margins in retail. Cloud is competitive from MFST, but there's room to grow in the cloud business. Cloud is basically subsidizing retail, and the high PE make the stock unattractive. Amazon has benefitted from lockdowns, but also faces higher wages, more unionization, and rising input costs. Amazon is investing in AI which is a cost.
specialty stores
BUY
She likes Canadian banks. PEs have climbed from last year, but still reasonable. Royal and TD are her top banks. Likes TD for its US presence, and retail in US and Canada. TD has the strongest capital base, and has an interest in Schwab. RY: Likes their diversity, scale. Both banks yield around 3.5% and will continue to raise them as earnings grow.
Christine PooleOwned
banks
WEAK BUY
Caller owns 7,000 shares You should diversify. MFC trades at a discount to the group because it has issues, but management is dealing with that. She expects MFC to catch up, but she is reassessing MFC. She hears how the younger people are leaving Hong Kong, which could dampen MFC's growth in that region.
Christine PooleOwned
insurance
BUY ON WEAKNESS
The stock has pulled back. She trimmed her position a little earlier this year. You can add this on weakness. They're doing very well with their phones and services, which are subscription-based. Also likes their wearables, like the Apple Watch. Apple can branch out their services to their base, which is the beauty of Apple.
Christine PooleOwned
electricalelectronic
BUY ON WEAKNESS
They have publicly traded subsidiaries, like reinsurance and renewables. BAM has done very well and reported strong earnings last week. The category of alternative asset management that BAM is in will continue to grow, because pension funds are looking for these assets. BAM has been successful in raising money to deploy, so BAM has a lot of firepower to grow long-term.
Christine PooleOwned
managementdiversified
BUY ON WEAKNESS
Water is a scarce resource and XYL is one of the few pure plays in water. Continues to like this. Semis shortages is making it hard to fulfill all their orders, which are seeing strong demand. Shares have fallen recently because of this backlog.
Christine PooleOwned
environmental
PAST TOP PICK
(A Top Pick Feb 19/21, Up 22%) Still likes it. gasses are used in many industries including healthcare, clean energy, semis . LIN is seeing good growth across many end markets and geographies. They will pass their rising input costs to their clients. Some end markets are resilient to recessions.
Christine PooleOwned
chemicals
PAST TOP PICK
(A Top Pick Feb 19/21, Up 25%) They own most of those brands and have gained market share. The growth rate will be higher in developing markets. Short-term, MDLZ is facing supply chain shortages, but this should improve. The PE
Christine PooleOwned
Consumer Products
PAST TOP PICK
(A Top Pick Feb 19/21, Up 37%) Still likes it, though it has pulled back recently, which makes a buying opportunity. They've made good acquisitions int he past 18 months. End markets--transportation -- will see growth. The infrastrucuture bill will help. Balance sheet still strong despite recent deals.
Christine PooleOwned
INDUSTRIAL PRODUCTS
DON'T BUY
Not sure why it's up 5% today. She doesn't own the airline sector, because it's very cyclical. Many airlines file for bankruptcy sometime in their lives. There are a lot of fixed costs beyond airlines' control. They have little pricing power in plane tickets. Airlines are a trade at best.
Transportation
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