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BUY
A solid company. Has owned this. A stable, steady grower, a play on the aging water works system in the U.S. Stimulus money helps upgrades in cities. AWK is a leading player here. Consistent shares, a long-term compounder. We are seeing more droughts and water scarcity due to global warming. Money flows from ESG funds helps. Great managers and track record of wealth growth.
electrical utilities
BUY
Considering inflation A past pick. They cater to customer needs, not their wants (that was the pandemic age), especially with high inflation and a slowing economy. There is a consumer trade-down theme in North America, so No Frills and discount grocers will benefit. They also have a great private label program and pharmacy operation. They manage costs and wages well.
Brian MaddenOwned
food stores
BUY
He owns both Canadian rails. CP is completing Kansas City Southern deal. Likes it for extending their network to Mexico and the Gulf. Good synergies. CN has better assets, but CP is operating their network better. This may have changed in the last quarter, though. Good to own either.
Brian MaddenOwned
Transportation
DON'T BUY
3-5 year hold? An innovative company that captivates its customers. On a 12-month trailing basis is earning 2x what its normalized earnings power is. They sell jet skis and other expensive toys that people bought during the pandemic, and you won't need to replace those anytime soon. It was a 6-bagger during Covid, but has since come off 28%. This will likely grind lower lower before it resumes its uptrend. Still not cheap and expectations are still too high. If you hold this for 3-5 years it's probably okay, but not for him.
Consumer Products
TOP PICK
One of the world's largest uranium producers, and among the few pure-play uranium stocks and not held by a government. They have two high-grade mines in Saskatchewan and a joint venture in Kazakstan. They have 450 million pounds of uranium reserves. They have the world's largest, high-grade uranium mine. They are the go-to uranium name. Utilities are scrambling to find non-Russian uranium. CCO is poised to triple earnings next year based on rising demand and prices. Shares have risen, but will continue to rise. (Analysts’ price target is $44.42)
integrated mines
TOP PICK
A great value creator for years. Best Canadian bank in terms of recent Q3 results. Their US division did very well because it's very net-interest margin sensitive, so rising rates help and more than offsets credit loss provisions. Their Canadian business did very well. Their investment bank business-weak across the sector--is relatively small for TD and didn't impact overall results that badly. They are closing their deal of First Horizon Bank, a huge $600+ million of synergy that will create value. (Analysts’ price target is $99.27)
Brian MaddenOwned
banks
TOP PICK
A specialty real estate play, leasing running cell phone towers, which offers secular growth and 5G unfolds. They are expanding into emerging markets, too. They are building out capacity quickly. They have many long-term service contracts with an inflation clause. They recently got into data centres (high-growth) with a $10 billion acquisition last year. Pays over a 2% yield. It's a growth and income story, and has created a lot of shareholder return. (Analysts’ price target is $294.47)
Brian MaddenOwned
Telecommunications
COMMENT
Data tells him that since mid-June we've merely been in a a bear market rally. These are common in recessions, lasting 24 days average and generating gains of 18%. Example: the 2000-01 recession saw eight bear market rallies of 10% or more and the 2008-09 recession saw six of them. He's been using this rally to sell riskier securities and to bolster our three equity portfolios with high-quality, downturn-resilient names across a variety of sectors, emphasizing companies that cater to customers’ needs (not wants). This includes companies with strong balance sheets and companies with a history of market outperformance in bear markets.
BUY
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