Today, The Panic-Proof Portfolio (Stockchase Research) and Michael Sprung commented about whether ENB-T, CAS-T, AD.UN-T, TD-T, ARE-T, ATD.B-T, BNS-T, CM-T, AQN-T, BAM.A-T, ABX-T, LB-T, GWO-T, MTL-T, H-T, TOU-T, TFII-T, MFC-T, BN-T, CHE.UN-T, EA-Q, SBUX-Q, FIVE-Q, NFLX-Q, FSLR-Q, WPK-T, WFG-T, OVV-T are stocks to buy or sell.
He's watching inflation and interest rates like everyone else. Maybe we're moving toward a more normalized world. Rates are doing their best to stem inflation, which is not demand-led by a supply-shortage-driven inflation. This will take time. Rates won't go down quickly and would be surprised there are any cuts by year's end. Fundamentals will remain very important--good earnings and balance sheets. Will be a volatile period, so be prepared.... Western markets don't want to be so dependent on China, but that will lead to inflation, because the west will buy fewer, cheaper Chinese goods.
A former top pick and he still owns it. Can understand frustration of shareholders. Shares have been edging up a but. The lifecos will return in a week or two. As China gets out of lockdown, those sales will pick up. Meanwhile, MFC is trading at a good valuation and the dividend is a good 5%. Get used to a big accounting change in lifecos that will change numbers, but that doesn't mean the underlying business has changed.
They just reported. The street likes their guidance. A former top pick of his and still owns it. It's well-positioned for the long term. There's a huge different in their operating differential between Canada and the U.S. If they close that gap, their earnings will increase a lot. They just bought shares in a competitor, so maybe that's the first step in a full acquisition. Strong cash flow. They could increase their dividend, which is now modest, or increase buybacks.
When it was partly privatized, it gave investors an opportunity to receive a yield, which has been consistent around 4%. But they're constrained and can't easily raise rates, though rates have jumped in the past year. This is solid for the yield, but doesn't see capital appreciation given where interest rates are.
OVV holds highly productive assets in the Montney, Anadarko and Permian basins. They have worked hard to optimize assets following the acquisition of Newfield in 2019. We like that it has maintained cash reserves while reducing debt and it trades under 2x book value. The dividend is backed by a payout ratio under 10% of cash flow. We recommend placing a stop-loss at $49, looking to achieve $81 -- upside potential of 29%. Yield 2.1%
(Analysts’ price target is $81.05)