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COMMENT
We're four months into a bear market. US Fed increases are widely expected, so let them happen. Inflation is approaching a peak and the rate of inflation will decrease. Companies that are still growing at the FAANG stocks, not slowing down, generating a lot of free cash and buying back stock. Also, consumer stocks with strong brands, like Pepsi and Frito-Lay, have pricing power. Witness the Loblaw-Frito Lay war earlier this year. He's watching these sectors.
BUY ON WEAKNESS
uranium stocks outlook Nuclear power is one of the few ways of solving the need for non-fossil fuel energy, but these plants need 10-15 years to build. Plants in China and the Middle East are in progress. Buy this below $30 and hold 10 years. It moves over a long period of time. He targets $50-60 in 3-5 years. Could be volatile short term.
integrated mines
HOLD
They make chips that fit into many applications, like cars. Their 12-month outlook remains pretty good, but worries that microchips are cyclical. So, 12-24 months demand for chips could decline. This is okay for the next 6 months if you already hold, but wouldn't buy more now. He's slightly down on this name, but is confident this will return to new highs.
0
BUY
Typical of western Canadian companies; a go-to when oil prices rise. He's surprised oil isn't higher given the European situation, but he expects higher prices this year as reopenings spread. Driving season will be strong this year as people travel. All energy remains a good bet, at least short term. Oil has a good, long-term cycle.
oil
gas
HOLD
They did a major restructuring but when they sold their business analytics business. Earnings have declined, but they sit on a lot of cash. Very well managed. Shares ran up during lockdowns. Pays a 2% dividend and trades at 9x. You can hold on, but wait and see what they do, like whether they will buy a new business like software or buyback shares. No need to panic.
publishing
printing
PAST TOP PICK
(A Top Pick May 20/21, Down 26%) A symbol of today's stock market. They overexpanded their distribution network; revenue has and will slow down. AWS enjoys 70% margins. Advertising is growing and Amazon can raise their fees. They're growing more distribution, but internet retail is slowing them down. But after a few quarters of sluggishness, this should return to growth. Still likes it and he would average down. Newbies can enter partially now.
specialty stores
BUY
Are bank stocks safe again? Canadian banks have outperformed the TSX throughout his entire career. There's fear that rising rates will make mortgages uncertain. But given this correction, you can nibble at the Canadian banks now, one of the safest assets in Canada, since they are protected by law. His favourite bank here is BNS given their exposure in South America, which were badly hit by Covid and they have wide mining exposure. The safer bet is CIBC, because it's well-managed, is more exposed to the Canadian economy which is thriving because of demand for natural resources, and it pays a good dividend.
banks
PARTIAL BUY
Well managed for many years, focused on railway ties and have expanded into wood products, but got caught up in the lumber price downturn. That hit the stock. Also, exports to China has declined due to Covid there. Lumber is in a cyclical downturn, so this is a tough call. Share have fallen into the mid-30s. The value remains, but market momentum will remain negative to 6-8 months. But this fear may be baked into shares now.
misc industrial products
RISKY
He uses their software to manage data among customers and employees. A young company and aren't making money yet. Enjoyed a rally during the pandemic, but has fallen since then. This could emerge strong under their leadership.Hang on and see how it recovers. Wait 5 years before you know it's a winner. Be patient.
Technology
