Latest Stock Buy or Sell?
Make More Informed Decisions!

Investing. A big fan of value and he is finding value in technology and financials. Technology is always trading at a discount because you don’t know what the future is going to bring. Valuations are cheap and what you have to do is discount it back to today’s valuation and your expectations for the future, as this is where he is finding value. On the financial side, there were a number of opportunities this summer with Canadian banks and mortgage lenders. People worried about short-sellers coming in so he scooped them up. US names are still cheap as well. US banks are still trading at BV.

Real estate. CMHC has made a decision to pull in the reins on securitized mortgages on the banks. He doesn’t see the Canadian banks taking on the excess risk so it might slow down some of the marginal mortgage buyers which could result in another slowdown in the Canadian housing market. However, so far we haven’t seen any slowdown.

Telcos were dropping well before the worry about Verizon (VZ-N) coming into Canada. Although he owns all 3 telcos, he would feel that Rogers (RCI.B-T) and Bell (BCE-T) are much more attractive. He thinks what is missing from this company are the other assets. This one is primarily wireless. They are trying to push into TV and this has put them at a disadvantage.

Feels the valuation on this company is still quite attractive and he is buying for his clients. Thinks there are some options for a number of these companies. Now that it has acquired Astral there is potential for them to unlock shareholder value by spinning out the media division.

Visa (V-N) or MasterCard (MC-N) and what would be a true market value for Visa? Don’t look at the price of the stock, look at the valuation. Price doesn’t matter, it’s all about value. Feels both are priced to perfection. They are wonderful monopolies, with much more growth to happen, especially in emerging markets and he would buy them in a heartbeat if they fell 25%. At 20X earnings, you are paying way too much.

Visa (V-N) or MasterCard (MC-N) and what would be a true market value for Visa? Don’t look at the price of the stock, look at the valuation. Price doesn’t matter, it’s all about value. Feels both are priced to perfection. They are wonderful monopolies, with much more growth to happen, especially in emerging markets and he would buy them in a heartbeat if they fell 25%. At 20X earnings, you are paying way too much.

Feels REITs have been overly punished and he can’t understand why they continue to go down even though it looks like the 10 year Canada and 10 year U.S. Treasury (which REITs should be priced off of) have stabilized at the 260 level. Also, there are so many US retailers coming in which is positive for this company. Not his favourite as he feels capital allocation is not as strong as others. Also, hasn’t seen many REITs increase distributions over the last few years. Doesn’t see interest rates going much higher. Prefers H&R (HR.UN-T) and Crombie (CRR.UN-T).

Likes the business. Not a fast grower but feels it can grow 1%-2% a year in revenues and looks for cost improvements. Recently had a lousy quarter. Last year they benefited from the ability to export sugar to the US and Mexico. Paid out an extra dividend of $0.30 this year. Dividend is safe. This is an income only stock. 6.1% dividend yield.

The leader in office products. Likes their ability to do “fulfillment the next day” on every product that you want. Sees a continuance to improve revenues. The problem is, revenues have flat lined so they are looking to improve it by cost cutting. Likes 1) their high free cash flow yield, 2) increasing dividend each and every year and 3) always a potential as a takeover target from private equity. $25 in a few years.

Interest rates are not that high so he thinks a lot of expectation is built into the stock price right now. Fundamentally it is overvalued and you can find better opportunities in other financial services companies. They recently got out of their Taiwan division, which tells us that even now Asia is a hard place to make money. This should trade at BV which, currently, is about $13.

Likes the large US banks a lot. Looked quite hard at this, Citigroup (C-N) and J.P. Morgan (JPM-N) and decided to go to J.P. Morgan. You can own one or all 3. As long as the US economy continues on this right track and housing improves, you’ll be fine.

2 activists are pushing hedge funds and he agrees with their findings that this company should take on some leverage to buy back stock. At this price, it is no longer a reasonable bargain. Not sure what they should do. If it fell 10% from this point, he would consider it as an opportunity.

(A Top Pick July 31/12. Up 50.69%.) Had thought that the market had overreacted on the London/Wale (?) thing and he knew the US economy was going to improve and it was a great entry point. Still cheap because the earnings keep growing at 20% a year. He can see this going to $75.

(A Top Pick July 31/12. Up 21.69%.) Had a 10 for 1 split. A shipping vessel company that also owns real estate. As the North American economy improves, there is more stuff to ship. You could see $20 on this stock.

(A Top Pick July 31/12. Up 16.35%.) This one was doing better up until it got nailed by rising interest rates. A pure play on real estate. Owns a number of publicly traded REITs as well. Very smart management. A screaming buy at $105.