Latest Stock Buy or Sell? Make More Informed Decisions!
Today, Varun Anand commented about whether TWM-T, SWCH-N, EVGN-X, DLR-N, ENB-T, ZGI-T, SCGI-X, ALA-T, AQN-T, LCFS-T, REGI-Q, TRP-T, H-T, PPL-T, ARE-T, WCN-T, CLNX-SM, PIF-T, GEI-T, ATRL-T, T-T, KEY-T, CP-T, BIP.UN-T, WSP-T, JEC-N are stocks to buy or sell.
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PAST TOP PICK
(A Top Pick Feb 04/21, Up 27%) Best in class in the world from track record in M&A, pricing power, marketing, and growth profile. Resilient demand and pricing power in face of interest rate hikes and situation in Ukraine. Deserves its premium. He's buying on pullbacks.
Transportation & Environmental Services
WEAK BUY
HOLD
Long or short-term hold? Dividend yield is sustainable, and it will increase by 3.8% once the KKR deal is done. Very strong balance sheet. Valuation is no longer compelling. O&G stocks go through boom and bust, so a long-term hold will see lots of volatility. Good for income, but better areas to invest in if you want compounded returns over 5 years.
pipelines
BUY
Management has put governance issues behind it and instituted good policies. Good mid-single-digit growth, healthy dividend yield, favourable jurisdiction of Ontario. Good RRSP candidate. Not too much of a headache for volatility and downside. For him, better opportunities elsewhere.
electrical utilities
SELL
Likes it, but stock has run. Sold on valuation, in favour of better opportunities. Tremendous growth profile underpinned by power generation and nat gas business. Excellent management. Growth profile of renewable IPPs is better and more sustainable, as it won't go through a bust any time soon and growth is visible.
oil
gas pipelines
BUY ON WEAKNESS
Half is renewable, half is regulated utility. Sees further upside. Not adding at current levels, but would on a pullback. Acquires companies that are under-earning, right-sizes them to generate more cashflow. One caveat is that they'll always be in the market for equity, so there will always be a bit of an overhang. If you don't want that, ALA is a great name. It has a utility and a mid-stream business, and its valuation is still quite compelling at current levels.
electrical utilities
PARTIAL SELL
Dividend safe? Company has dialled back dividend growth recently, so payout ratio doesn't get too high. Yield is very healthy. Fairly safe for an RRSP. Short-term risk of open-ended mainline contracting. Latest rally leaves little room for disappointment. Perhaps sell half and diversify to TRP.
oil
gas pipelines
COMMENT
Impact of traditional energy getting into renewables? It is having an impact. It's the right decision. They're allocating a lot of capital to areas that will have a lot of growth and it's a key area of focus for investors. But he'd rather own companies that are 100% focused on those areas, rather than 10% as ENB and TRP are. Names like PIF, NPI, and BLX are pure plays in the renewable energy space. There's a lot of opportunity out there, especially with valuations of renewables that have sold off.
