- Page 1/2
- Next Page
US employment has risen from 3.4% to 4.3%, much higher in Canada. The weak July suggested Jay Powell (who is data-dependent) may be behind the ball. Since then, inflation is trending down to the target, which encourages a September interest rate cut by Powell. The first cut will improve sentiment. Today's 2.5% inflation number likely points to a third cut by the Bank of Canada in September, which we need. Central banks around the world are cutting as inflation declines and unemployment rises. S&P 500 earnings last quarter grew 12.5% YOY, including a topline of 5.5%. Previous headwinds: transportation and input costs, but that has reversed, so companies have better operating margins. The lower-end consumer and China are weakening, but the overall economy is okay. The street expects the S&P to grow 10% YOY this year and 14% in 2025. She doesn't expect a US recession.
She owns no producers now. The LNG facility will benefit natural gas producers, because the facility will help ship LNG to Asia. TOU is one of the top names in natural gas production. She prefers buying the infrastructure stocks which are vulnerable to commodity prices.
This indirectly plays EV car growth, which is slow now, but long term will increase. TEL makes sensors and even gas-powered cars need more sensors. US business has slowed by TEL, but most of their growth comes from China. They have many clients. Also, data centres need their sensors and there are more and more centres. Despite a weaker topline, their margins and productivity are improving
Among the lowest PEs in the Mag 7. They will continue to dominate online search, despite questions over gen AI. They're upgrading their AI though. As a major cloud player, they are benefitting from the rise in data centres and AI. At some point, shareholders may say they're not seeing returns in GOOG's capex spending, which happened to Meta a few years ago. If they stop spending, they will have even more cash, which is already healthy. The overhang now is the anti-competitive ruling, which will be a long process. GOOG will do well long-term and she will continue to hold it.
They have a good track record of buying an integrating gas stations. The 7/11 deal is complex. 7/11's parent company is worth US$38 billion vs. ATD's C$75 billion. This could take years, and the Japanese parent has to review the deal and settle on a price (nobody knows), then there's regulatory approval in the U.S. ATD's net debt-to-EBITDA is 2.2x which is in their target range, so ATD will have to issue equity. She wouldn't buy this, based on this deal.
One of her top bank holdings and a top bank performer in Canada. Pays over a 4% yield. Trades at a premium to peers. Likes their HSBC takeover, which they just absorbed. Good. On track to achieve synergies of $740 million over 2 years; HSBC exposes them to higher-wealth clients.
A global engineering consultant infrastructure, with 45% in the US and under 20% in Canada. They grow by aquisition while organic growth was 8% last quarter. They just bought a private US company involved its utilities. They issued equity, though. They grow its topline 10% annually over 10 years. The street likes the deal, though the price may be high. Synergies should pay off.
