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.
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.
It's going through a lot of change as the CEO sells assets. It's a wait and see stock.
electrical / electronic
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
Waste management is not a growth story. The industry tends to grow by consolidation. As economic activity picks up, so will the waste business.
Transportation & Environmental Services
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.
Never bought it, though IFC is dominant in its space. But its ROE is weaker than the Canadian banks, which she owns instead.