Recent Opinions | StockChase

Opinions Table


Signal Opinion Expert
N/A
General Market Comment 

December 15, 2017

Market. Technology will continue to be a big driving sector. We've seen a lithium bubble and all sorts of speculative trends in some of the really small junior companies. It's a dichotomy kind of market with large companies doing well, some of the crazy stuff doing well, but some stuff in the middle nobody cares about. People are still worried and still have the recession belief in their brain. Executive confidence is pretty high right now. A rise in interest rates is a given and this is fully reflected in the market right. There are no issues unless the Fed does something crazy. Everyone is talking about synchronized global growth, and that is occurring. It is really time for someone to pay attention to the resource market. There have been lots of takeovers and lots of shortages of production capacity. As you get expansion of capacity demand, then you have to get some sort of slingshot effect in resources. Thinks that sector is going to do better.

Market. Technology will continue to be a big driving sector. We've seen a lithium bubble and all sorts of speculative trends in some of the really small junior companies. It's a dichotomy kind of market with large companies doing well, some of the crazy stuff doing well, but some stuff in the middle nobody cares about. People are still worried and still have the recession belief in their brain. Executive confidence is pretty high right now. A rise in interest rates is a given and this is fully reflected in the market right. There are no issues unless the Fed does something crazy. Everyone is talking about synchronized global growth, and that is occurring. It is really time for someone to pay attention to the resource market. There have been lots of takeovers and lots of shortages of production capacity. As you get expansion of capacity demand, then you have to get some sort of slingshot effect in resources. Thinks that sector is going to do better.

Unknown
Peter Hodson

CEO & Head of Research, 5i Research Inc....

PricePrice
$0.020
Owned Owned
_N/A

N/A
General Market Comment 

December 15, 2017

Marijuana? An emerging industry, and you cannot value these compConstellation Brands has come in, and we know that other companies will come in as they want a piece of this market. It's probably not because Canada will be huge, but it is when other countries go the legal route. Expects there will be a lot of consolidation. This is going to be crazy, and then you get July and people will realize it is not going to be quite as exciting as what they thought. You can probably trade these until the 1st quarter after legalization, and that is when the party ends.anies. It's all based on what might happen. If every single person in Canada bought $100 worth of weed a year, it is still only a $4 billion market. But if you look at the market cap and what people are expecting; the market cap and potential is just ridiculous. Because of that, he is very, very cautious. The other side is that there will be more consolidation in the industry. 

Marijuana? An emerging industry, and you cannot value these compConstellation Brands has come in, and we know that other companies will come in as they want a piece of this market. It's probably not because Canada will be huge, but it is when other countries go the legal route. Expects there will be a lot of consolidation. This is going to be crazy, and then you get July and people will realize it is not going to be quite as exciting as what they thought. You can probably trade these until the 1st quarter after legalization, and that is when the party ends.anies. It's all based on what might happen. If every single person in Canada bought $100 worth of weed a year, it is still only a $4 billion market. But if you look at the market cap and what people are expecting; the market cap and potential is just ridiculous. Because of that, he is very, very cautious. The other side is that there will be more consolidation in the industry. 

Unknown
Peter Hodson

CEO & Head of Research, 5i Research Inc....

PricePrice
$0.020
Owned Owned
_N/A

N/A
General Market Comment 

December 15, 2017

Market. He’s been very Long this market for a while, and for asset allocation model 70/30 to fixed income, he is right on the edge in terms of his swing for 90% equity. Stocks are expensive, but are not expensive relative to bonds, apartment buildings, a lot of different private equity alternatives. If you can find a stock with a 11 or 12 PE with a 4% dividend and visibility growing at 10% and EPS, there is still lots of opportunity. As a protection strategy, he is using the options market to squeeze out yield on both sides, using Calls or puts.

Market. He’s been very Long this market for a while, and for asset allocation model 70/30 to fixed income, he is right on the edge in terms of his swing for 90% equity. Stocks are expensive, but are not expensive relative to bonds, apartment buildings, a lot of different private equity alternatives. If you can find a stock with a 11 or 12 PE with a 4% dividend and visibility growing at 10% and EPS, there is still lots of opportunity. As a protection strategy, he is using the options market to squeeze out yield on both sides, using Calls or puts.

Unknown
Greg Newman

Director & Portfolio Manager, Scotia Wealth Manage...

PricePrice
$0.020
Owned Owned
_N/A

N/A
General Market Comment 

December 15, 2017

Dividend paying stock to provide an income? He would start with one or 2 banks and 1 or 2 insurance companies. There are some really good industrials that still look good, such as a Magna (MG-T). A lot of people are looking for the high dividend paying stocks, that are good to be owning in this environment. He would suggest a Russell Metals (RUS-T) with about a 5% dividend, which is strengthening from metal prices.

Dividend paying stock to provide an income? He would start with one or 2 banks and 1 or 2 insurance companies. There are some really good industrials that still look good, such as a Magna (MG-T). A lot of people are looking for the high dividend paying stocks, that are good to be owning in this environment. He would suggest a Russell Metals (RUS-T) with about a 5% dividend, which is strengthening from metal prices.

Unknown
Greg Newman

Director & Portfolio Manager, Scotia Wealth Manage...

PricePrice
$0.020
Owned Owned
_N/A

COMMENT
Apple(AAPL-Q) 

December 15, 2017

Trading at a very reasonable valuation. Tim Cook has been a great custodian for the business. They haven't really done anything super bold. They have so much cash, trading at a reasonable valuation. Tech land still has very reasonable multiples and this company is very reasonable within that. Thinks there is still more to go.

electrical/electronic

Trading at a very reasonable valuation. Tim Cook has been a great custodian for the business. They haven't really done anything super bold. They have so much cash, trading at a reasonable valuation. Tech land still has very reasonable multiples and this company is very reasonable within that. Thinks there is still more to go.

electrical/electronic
Greg Newman

Director & Portfolio Manager, Scotia Wealth Manage...

PricePrice
$173.970
Owned Owned
Yes

COMMENT
Altagas Ltd(ALA-T) 

December 15, 2017

He would put this in the so-so category. This year one of their largest investments got taken out. They made another investment, but also have 3 or 4 investee companies that are not doing so well. They are starting to deal with that, but investors are basically saying they are going to look at this company when all their problems are solved. Investors are also worried about the 8.5% dividend. He doesn't think it will be capped, but wouldn't call it 100% safe either. A very well-run company that is going through a problematic period of time. They earn 15%-16% royalties on their investment, and you don't get that type of return without some risk. Unfortunately, they hit 3 or 4 problems all in a short period of time.

oil/gas

He would put this in the so-so category. This year one of their largest investments got taken out. They made another investment, but also have 3 or 4 investee companies that are not doing so well. They are starting to deal with that, but investors are basically saying they are going to look at this company when all their problems are solved. Investors are also worried about the 8.5% dividend. He doesn't think it will be capped, but wouldn't call it 100% safe either. A very well-run company that is going through a problematic period of time. They earn 15%-16% royalties on their investment, and you don't get that type of return without some risk. Unfortunately, they hit 3 or 4 problems all in a short period of time.

oil/gas
Peter Hodson

CEO & Head of Research, 5i Research Inc....

PricePrice
$29.040
Owned Owned
Unknown

COMMENT
Altagas Ltd(ALA-T) 

December 15, 2017

Doesn't cover this one actively. They did a deal in the US that looks accretive. He prefers Penbina (PPL-T) which has a much better growth rate and a clearer thesis. The payout ratio, it is something like 5% of free cash flow, and he thinks you are going to be fine in terms of the dividend.

oil/gas

Doesn't cover this one actively. They did a deal in the US that looks accretive. He prefers Penbina (PPL-T) which has a much better growth rate and a clearer thesis. The payout ratio, it is something like 5% of free cash flow, and he thinks you are going to be fine in terms of the dividend.

oil/gas
Greg Newman

Director & Portfolio Manager, Scotia Wealth Manage...

PricePrice
$29.040
Owned Owned
No

COMMENT
Arc Resources Ltd(ARX-T) 

December 15, 2017

This has just fallen apart with ECO prices, with Henry hub falling. The markets have been so good that portfolio managers are just taking losers and dumping them as tax loss selling targets. Thinks there will be a pop between now and the 3rd week of January. The bad news is that the dividend has a 142% effective payout ratio, so it is not safe. The balance sheet is not ironclad.

oil/gas

This has just fallen apart with ECO prices, with Henry hub falling. The markets have been so good that portfolio managers are just taking losers and dumping them as tax loss selling targets. Thinks there will be a pop between now and the 3rd week of January. The bad news is that the dividend has a 142% effective payout ratio, so it is not safe. The balance sheet is not ironclad.

oil/gas
Greg Newman

Director & Portfolio Manager, Scotia Wealth Manage...

PricePrice
$13.880
Owned Owned
Unknown

BUY
Bank of America(BAC-N) 

December 15, 2017

Still trading at close to tangible BV of around 1X. On a PE basis, it is a little more expensive than Toronto Dominion (TD-T), maybe around 14X versus 12X. With rising interest rates, a slightly better net interest margin, a rebounding America, and the corporate tax plan, this company really stands to benefit. This one is going higher.

banks

Still trading at close to tangible BV of around 1X. On a PE basis, it is a little more expensive than Toronto Dominion (TD-T), maybe around 14X versus 12X. With rising interest rates, a slightly better net interest margin, a rebounding America, and the corporate tax plan, this company really stands to benefit. This one is going higher.

banks
Greg Newman

Director & Portfolio Manager, Scotia Wealth Manage...

PricePrice
$29.040
Owned Owned
Yes

COMMENT
Bombardier Inc (B)(BBD.B-T) 

December 15, 2017

Thinks this has finally turned the corner. It is definitely risky. New management continues to deliver on goals and milestones. He believes that the sum of the parts valuation is at $3.75 and that the C series is worth another $.72. He is modelling 30% EBITDA growth 2017-2020, and it is trading at a reasonable valuation of 9.2, versus its peers of 11.6. A good risk/reward story.

transportation equip & components

Thinks this has finally turned the corner. It is definitely risky. New management continues to deliver on goals and milestones. He believes that the sum of the parts valuation is at $3.75 and that the C series is worth another $.72. He is modelling 30% EBITDA growth 2017-2020, and it is trading at a reasonable valuation of 9.2, versus its peers of 11.6. A good risk/reward story.

transportation equip & components
Greg Newman

Director & Portfolio Manager, Scotia Wealth Manage...

PricePrice
$3.070
Owned Owned
Unknown

HOLD

This stock never gets cheap. He expects them to grow their cash flow 6%-11% annually from contract inflation and margin expansion and development. They want to grow their dividend 5% annually. The only thing is, it is very expensive, trading at a 5.9% 2018 pre-cash yield.

Utilities

This stock never gets cheap. He expects them to grow their cash flow 6%-11% annually from contract inflation and margin expansion and development. They want to grow their dividend 5% annually. The only thing is, it is very expensive, trading at a 5.9% 2018 pre-cash yield.

Utilities
Greg Newman

Director & Portfolio Manager, Scotia Wealth Manage...

PricePrice
$44.240
Owned Owned
Unknown

COMMENT
Birchcliff Energy Ltd.(BIR-T) 

December 15, 2017

Average down? As a general rule, he doesn't ever like averaging down. Mathematically, it has been proven it’s not a good strategy. You have a situation where investors are not liking the company. There are always other investors that are going to throw in the towel after you’ve averaged down. This is interesting, because the company was up for sale in the $8-$9 range many years ago, and is actually quite a well-run gas company that continues to hit new lows, and we are in the middle of tax loss right now, and he thinks there is an opportunity. Wouldn't be really too worried if you bought more, as long as your position limit is within reason. A great company, but in the wrong sector. If you have a few years, it is probably safe to Buy.

oil/gas

Average down? As a general rule, he doesn't ever like averaging down. Mathematically, it has been proven it’s not a good strategy. You have a situation where investors are not liking the company. There are always other investors that are going to throw in the towel after you’ve averaged down. This is interesting, because the company was up for sale in the $8-$9 range many years ago, and is actually quite a well-run gas company that continues to hit new lows, and we are in the middle of tax loss right now, and he thinks there is an opportunity. Wouldn't be really too worried if you bought more, as long as your position limit is within reason. A great company, but in the wrong sector. If you have a few years, it is probably safe to Buy.

oil/gas
Peter Hodson

CEO & Head of Research, 5i Research Inc....

PricePrice
$3.890
Owned Owned
Unknown

PAST TOP PICK
Bank of Nova Scotia(BNS-T) 

December 15, 2017

(A Top Pick Dec 9/16. Up 11%.) Had thought the banks were a good deal because of a rebound in the economy in front of us. Also felt that this had the best mix at the time. They’re also trading at an attractive valuation. All these things are still there. Still a buy.

banks

(A Top Pick Dec 9/16. Up 11%.) Had thought the banks were a good deal because of a rebound in the economy in front of us. Also felt that this had the best mix at the time. They’re also trading at an attractive valuation. All these things are still there. Still a buy.

banks
Greg Newman

Director & Portfolio Manager, Scotia Wealth Manage...

PricePrice
$82.160
Owned Owned
Yes

COMMENT

Has done a great job in winning municipality bus contracts. The stock really, really ramped up, and then investors paused a little, and said now that you've got the orders, show us you can make money. They've had 2 good quarters in terms of profitability, so they've proven they can take an order and make money off of it. Now it is just a situation of replacing orders they have, growing their backlog and winning new business. A nice little company in the early stages of growth, but it also means that if anything goes wrong, the very, very high expectations will be wrong and the stock will be volatile if there are any problems.

Transportation

Has done a great job in winning municipality bus contracts. The stock really, really ramped up, and then investors paused a little, and said now that you've got the orders, show us you can make money. They've had 2 good quarters in terms of profitability, so they've proven they can take an order and make money off of it. Now it is just a situation of replacing orders they have, growing their backlog and winning new business. A nice little company in the early stages of growth, but it also means that if anything goes wrong, the very, very high expectations will be wrong and the stock will be volatile if there are any problems.

Transportation
Peter Hodson

CEO & Head of Research, 5i Research Inc....

PricePrice
$2.090
Owned Owned
Unknown

PAST TOP PICK
Cara Operations Ltd.(CARA-T) 

December 15, 2017

(A Top Pick Dec 9/16. Up 3%.) This really hasn't come to fruition yet. He chose it for its discounted valuation. Trading at around 9X versus same restaurant peers that are trading around 15X that have growth. It has been impacted by minimum wage hikes. He is looking for 3% restaurant sales growth over 2018 from a rebound in Calgary and the strong Québec. A very good name to be owning.

food services

(A Top Pick Dec 9/16. Up 3%.) This really hasn't come to fruition yet. He chose it for its discounted valuation. Trading at around 9X versus same restaurant peers that are trading around 15X that have growth. It has been impacted by minimum wage hikes. He is looking for 3% restaurant sales growth over 2018 from a rebound in Calgary and the strong Québec. A very good name to be owning.

food services
Greg Newman

Director & Portfolio Manager, Scotia Wealth Manage...

PricePrice
$25.780
Owned Owned
Yes

COMMENT
Callidus Capital Corp(CBL-T) 

December 15, 2017

Makes riskier type loans to a wide range of companies. If they don’t work out, then they take the equity in and try to fix the problem. Put themselves up for sale and were going to privatize. An independent valuation was in the $18-$20 range. There was a lawsuit. The person suing was saying bad things about the company. The stock dropped from $17-$18 down to below $10. Meanwhile the company and insiders continued to buy back and the company was saying they were still on board with the privatization process. This has a bit of a mixed view, but they continue to pay the dividend and continue to buy back stock. It has dragged on for almost a year, and investors are getting frustrated. Dividend yield of almost 12%.

Financial Services

Makes riskier type loans to a wide range of companies. If they don’t work out, then they take the equity in and try to fix the problem. Put themselves up for sale and were going to privatize. An independent valuation was in the $18-$20 range. There was a lawsuit. The person suing was saying bad things about the company. The stock dropped from $17-$18 down to below $10. Meanwhile the company and insiders continued to buy back and the company was saying they were still on board with the privatization process. This has a bit of a mixed view, but they continue to pay the dividend and continue to buy back stock. It has dragged on for almost a year, and investors are getting frustrated. Dividend yield of almost 12%.

Financial Services
Peter Hodson

CEO & Head of Research, 5i Research Inc....

PricePrice
$10.420
Owned Owned
Unknown

COMMENT
Cardinal Energy Ltd(CJ-T) 

December 15, 2017

This is driven by the economy, sales and web transactions. Has some very, very good monopolistic situations in Canada with a couple of very, very large customers, including Canada Post. It probably has some potential to go from here and will have a good 2018. With giant contracts, a lot of investors come on board in anticipation of those contracts. As they start hitting the revenue growth and earnings growth, some investors may start exiting, so doesn't think you are going to see as great a run over the next 2 years, as there has been in the past 3, but it will have a decent year. A nice solid company.

oil/gas

This is driven by the economy, sales and web transactions. Has some very, very good monopolistic situations in Canada with a couple of very, very large customers, including Canada Post. It probably has some potential to go from here and will have a good 2018. With giant contracts, a lot of investors come on board in anticipation of those contracts. As they start hitting the revenue growth and earnings growth, some investors may start exiting, so doesn't think you are going to see as great a run over the next 2 years, as there has been in the past 3, but it will have a decent year. A nice solid company.

oil/gas
Peter Hodson

CEO & Head of Research, 5i Research Inc....

PricePrice
$4.590
Owned Owned
Unknown

SELL

They've had a tough go recently. They missed earnings and sales have been disappointing. Also, doesn't like their balance sheet much, right now. Doesn't think it’s in jeopardy of going under, but they really have to turn around their earnings growth picture, and improve operating performance and drive down costs to get investors interested again. Thinks it is probably dead money for a period of time, until they get 3 or 4 quarters of consistent results. If you own, he would suggest getting out of it and looking at it later when everything looks better.

Financial Services

They've had a tough go recently. They missed earnings and sales have been disappointing. Also, doesn't like their balance sheet much, right now. Doesn't think it’s in jeopardy of going under, but they really have to turn around their earnings growth picture, and improve operating performance and drive down costs to get investors interested again. Thinks it is probably dead money for a period of time, until they get 3 or 4 quarters of consistent results. If you own, he would suggest getting out of it and looking at it later when everything looks better.

Financial Services
Peter Hodson

CEO & Head of Research, 5i Research Inc....

PricePrice
$7.540
Owned Owned
Unknown

BUY
Canadian National R.R.(CNR-T) 

December 15, 2017

This probably has a better case for growth than Canadian Pacific (CP-T). Their 10% growth rate is pretty well in the bag with market share gain. They have slightly higher ORs than what the market expects, but that is probably in the stock. He likes this and it will probably go higher.

Transportation

This probably has a better case for growth than Canadian Pacific (CP-T). Their 10% growth rate is pretty well in the bag with market share gain. They have slightly higher ORs than what the market expects, but that is probably in the stock. He likes this and it will probably go higher.

Transportation
Greg Newman

Director & Portfolio Manager, Scotia Wealth Manage...

PricePrice
$103.350
Owned Owned
Unknown

BUY
Canadian Pacific Rail(CP-T) 

December 15, 2017

He is modelling 12% EPS growth and is trading at a not a bad multiple compared to the group. He likes this and it will probably go higher. In a pinch, he thinks this is a better value than Canadian National (CNR-T) and it would be one he would be buying.

Transportation

He is modelling 12% EPS growth and is trading at a not a bad multiple compared to the group. He likes this and it will probably go higher. In a pinch, he thinks this is a better value than Canadian National (CNR-T) and it would be one he would be buying.

Transportation
Greg Newman

Director & Portfolio Manager, Scotia Wealth Manage...

PricePrice
$230.050
Owned Owned
Unknown

COMMENT

Has beaten this up for years, because they’ve issued a lot of equity. Even with that, their debt has been higher than he has liked. It hasn't really treated shareholders properly in a sector that is not doing very well. One of his least favourite companies in the whole sector. He doesn't see a big reason to own it. However, whenever oil decides to go up again, it will be a "go to" name. It will rally hard when oil goes, but he would rather have a consistent company that is showing better growth and treats their shareholders better.

oil/gas

Has beaten this up for years, because they’ve issued a lot of equity. Even with that, their debt has been higher than he has liked. It hasn't really treated shareholders properly in a sector that is not doing very well. One of his least favourite companies in the whole sector. He doesn't see a big reason to own it. However, whenever oil decides to go up again, it will be a "go to" name. It will rally hard when oil goes, but he would rather have a consistent company that is showing better growth and treats their shareholders better.

oil/gas
Peter Hodson

CEO & Head of Research, 5i Research Inc....

PricePrice
$8.290
Owned Owned
Unknown

COMMENT
CRH Medical Corp.(CRH-T) 

December 15, 2017

Had this in his Growth portfolio, and it just didn’t work out. A situation where a company gets oversold. It will probably have a good January bounce because of all the tax loss selling that has probably occurred over the last couple of weeks or months. He is having a hard time with this. Would like to support it on valuation, but in terms of execution it has issues with payor codes changing, and the revenue growth is largely beyond the company's control. They haven't handled the past year very well. He would put this in the "OK" category, but with 10,000 public companies to choose from, it is well low on his list.

biotechnology/pharmaceutical

Had this in his Growth portfolio, and it just didn’t work out. A situation where a company gets oversold. It will probably have a good January bounce because of all the tax loss selling that has probably occurred over the last couple of weeks or months. He is having a hard time with this. Would like to support it on valuation, but in terms of execution it has issues with payor codes changing, and the revenue growth is largely beyond the company's control. They haven't handled the past year very well. He would put this in the "OK" category, but with 10,000 public companies to choose from, it is well low on his list.

biotechnology/pharmaceutical
Peter Hodson

CEO & Head of Research, 5i Research Inc....

PricePrice
$3.010
Owned Owned
Unknown

COMMENT
Dream Office REIT(D.UN-T) 

December 15, 2017

On Q3, they substantially completed most of their asset sales for $1.6 billion. The balance sheet is in much better shape. Has material exposure to the Toronto market which is very hot. Payout ratio is fine on 2018, but will be better in 2019. Through the asset sales their funds from operations dropped 8% 2017-2019. It’s a much better quality name now than it was. Really pricey trading at about 20X. This is one he would be selling Calls on.

property mngmnt/investment

On Q3, they substantially completed most of their asset sales for $1.6 billion. The balance sheet is in much better shape. Has material exposure to the Toronto market which is very hot. Payout ratio is fine on 2018, but will be better in 2019. Through the asset sales their funds from operations dropped 8% 2017-2019. It’s a much better quality name now than it was. Really pricey trading at about 20X. This is one he would be selling Calls on.

property mngmnt/investment
Greg Newman

Director & Portfolio Manager, Scotia Wealth Manage...

PricePrice
$22.640
Owned Owned
Unknown

COMMENT
Dollarama Inc.(DOL-T) 

December 15, 2017

Investors have considered this as ridiculously expensive for 10 years now. Everyone talks about the valuation, and meanwhile they continue to grow and continue to execute well. They continue to increase their market share and continue to make investors money. He likes it quite a lot and has just added it to one of his portfolios. At some point they will hit the saturation limit in Canada, and are starting to make inroads into other countries. At some point, a larger entity will probably come in, in order to take over the Canadian dollar market, and guess who they are going to buy. A really good opportunity over the next 3-4 years. As a growth story, this is one of the best in Canada.

Consumer Products

Investors have considered this as ridiculously expensive for 10 years now. Everyone talks about the valuation, and meanwhile they continue to grow and continue to execute well. They continue to increase their market share and continue to make investors money. He likes it quite a lot and has just added it to one of his portfolios. At some point they will hit the saturation limit in Canada, and are starting to make inroads into other countries. At some point, a larger entity will probably come in, in order to take over the Canadian dollar market, and guess who they are going to buy. A really good opportunity over the next 3-4 years. As a growth story, this is one of the best in Canada.

Consumer Products
Peter Hodson

CEO & Head of Research, 5i Research Inc....

PricePrice
$154.900
Owned Owned
Unknown

HOLD
Medical Facilities Corp.(DR-T) 

December 15, 2017

Has had an "up and down" year, and a lot of people are concerned, partially about the "pay in" system in the US medical market. They have surgery centres in the US. A nice little company, and the dividend is well covered by cash flow, but investors are concerned about growth potential and changes to the system. It may be a victim of "there is more excitement elsewhere". Well run and well-managed. He would view this as an income story, not 100% secure income and a relatively small company. Dividend yield of 8.3%.

other services

Has had an "up and down" year, and a lot of people are concerned, partially about the "pay in" system in the US medical market. They have surgery centres in the US. A nice little company, and the dividend is well covered by cash flow, but investors are concerned about growth potential and changes to the system. It may be a victim of "there is more excitement elsewhere". Well run and well-managed. He would view this as an income story, not 100% secure income and a relatively small company. Dividend yield of 8.3%.

other services
Peter Hodson

CEO & Head of Research, 5i Research Inc....

PricePrice
$13.600
Owned Owned
Unknown

COMMENT
Encana Corp(ECA-T) 

December 15, 2017

The balance sheet has gotten a lot better, but still not ironclad. Trading at 2.2X Debt to Cash Flow for 2018. If oil/gas gets really challenged, that could be a problem. It’s still not cheap on a 2018 multiple, but they have really nice production growth. Thinks they are going to do 17% over his forecast, which leads to Cash Flow per share of about 35%. Balance sheets are going to look a lot better in 2019 and their valuations are going to start to look better at that time. They had a bad debt situation a couple of years ago, but have had a Herculean turnaround. He probably would not want to be in the energy sector at these levels.

oil/gas

The balance sheet has gotten a lot better, but still not ironclad. Trading at 2.2X Debt to Cash Flow for 2018. If oil/gas gets really challenged, that could be a problem. It’s still not cheap on a 2018 multiple, but they have really nice production growth. Thinks they are going to do 17% over his forecast, which leads to Cash Flow per share of about 35%. Balance sheets are going to look a lot better in 2019 and their valuations are going to start to look better at that time. They had a bad debt situation a couple of years ago, but have had a Herculean turnaround. He probably would not want to be in the energy sector at these levels.

oil/gas
Greg Newman

Director & Portfolio Manager, Scotia Wealth Manage...

PricePrice
$14.270
Owned Owned
Unknown

TOP PICK
ECN Capital(ECN-T) 

December 15, 2017

Steve Hudson is an entrepreneur who has grown and sold companies before. This is trading below its NAV, and is buying back stock. They had an investor presentation this week basically saying look for the 1st quarter to be pretty exciting in terms of acquisitions. They’ve made some acquisitions and dispositions. Has a great balance sheet. Thinks they will be very, very active. A leasing/finance company with low interest rates in a strong economy, trading below its asset value. A pretty safe bet for the next year. Dividend yield of 1%. (Analysts' price target is $5.00.)

Financial Services

Steve Hudson is an entrepreneur who has grown and sold companies before. This is trading below its NAV, and is buying back stock. They had an investor presentation this week basically saying look for the 1st quarter to be pretty exciting in terms of acquisitions. They’ve made some acquisitions and dispositions. Has a great balance sheet. Thinks they will be very, very active. A leasing/finance company with low interest rates in a strong economy, trading below its asset value. A pretty safe bet for the next year. Dividend yield of 1%. (Analysts' price target is $5.00.)

Financial Services
Peter Hodson

CEO & Head of Research, 5i Research Inc....

PricePrice
$3.850
Owned Owned
No

TOP PICK
Enbridge(ENB-T) 

December 15, 2017

This has been a tax loss selling target. There has been concern over their debt, funding of their dividend growth, whether they would be able to continue to grow at 10%, line 3 regulatory approvals, funding for their projects. Thinks it has gotten oversold and is a bit of a coiled spring. 2018 Line 3 should hit a lot of regulatory milestones. The main line volume outlook should probably clear, and he models a decent growth rate over the next couple of years. Trades at a 9.2% 2019 free cash yield, which is cheap for this. Dividend yield of 5.4%. (Analysts’ Price Target is $60.)

oil/gas pipelines

This has been a tax loss selling target. There has been concern over their debt, funding of their dividend growth, whether they would be able to continue to grow at 10%, line 3 regulatory approvals, funding for their projects. Thinks it has gotten oversold and is a bit of a coiled spring. 2018 Line 3 should hit a lot of regulatory milestones. The main line volume outlook should probably clear, and he models a decent growth rate over the next couple of years. Trades at a 9.2% 2019 free cash yield, which is cheap for this. Dividend yield of 5.4%. (Analysts’ Price Target is $60.)

oil/gas pipelines
Greg Newman

Director & Portfolio Manager, Scotia Wealth Manage...

PricePrice
$49.890
Owned Owned
Yes

COMMENT
Facebook(FB-Q) 

December 15, 2017

Trading at a fairly reasonable valuation. Expensive at 30X forward earnings, but not bad considering that they have 1.6 billion eyeballs, in so many ways to continue to monetize. This is the future. There is more to go.

Trading at a fairly reasonable valuation. Expensive at 30X forward earnings, but not bad considering that they have 1.6 billion eyeballs, in so many ways to continue to monetize. This is the future. There is more to go.

0
Greg Newman

Director & Portfolio Manager, Scotia Wealth Manage...

PricePrice
$180.180
Owned Owned
Yes

COMMENT
Fortis Inc.(FTS-T) 

December 15, 2017

Had a pretty good Q3 driven by their US operations and lower costs. Their developments are attracting well. Very solid dividend growth. Has a low Payout Ratio that supports the dividend growth. There are other projects outside their capital plan that can drive growth further. Not cheap anymore, trading at around 18.5X 2018, versus its peers at around 17X. It really doesn't have the best growth. He is only modelling 3% growth 2017-2019.

electrical utilities

Had a pretty good Q3 driven by their US operations and lower costs. Their developments are attracting well. Very solid dividend growth. Has a low Payout Ratio that supports the dividend growth. There are other projects outside their capital plan that can drive growth further. Not cheap anymore, trading at around 18.5X 2018, versus its peers at around 17X. It really doesn't have the best growth. He is only modelling 3% growth 2017-2019.

electrical utilities
Greg Newman

Director & Portfolio Manager, Scotia Wealth Manage...

PricePrice
$46.820
Owned Owned
Yes

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