Top Stock Picks 2017 – Michael Sprung on BNN’s Market Call – April 28th, 2017

Top Stock Picks 2017 Outlook
 

As we look back at the first 100 days of the Trump administration, we see a period filled with conflicting messages. The media has been prolific in their condemnation of Trump's policies but the capital markets have been more sanguine.  Sine the election in November, the US markets have enthusiastically embrace the promises of deregulation and lower taxes that were the cornerstones of the Trump campaign. The enthusiasm paused briefly when changes to health care met with resistance and investors realized that not all of the promises are likely to be easily forthcoming. The Canadian markets were not as robust. Weak energy prices and tepid economic growth were reflected in more range bound markets. European markets were a bit more robust as factories exhibited greater activity as was the case in much of Asia as exports from Taiwan, South Korea and China were up from a year ago.

Michael Sprung Top Picks BNN Market Call April 28 2017

Michael Sprung's Top Picks BNN Market Call: April 28, 2017

There is certainly reasons to be optimistic on the global economy as orders for capital equipment are on the rise and employment improves. It has been a long, hard climb out of the financial abyss of ten years ago as is often the case in financial crisis. The difficulty of the recovery has been reflected in large part in the rise of populist politics as evidenced by the Brexit vote and the election of Donald Trump. Europe faces a few key elections this year.

Politics and economic cycles are often out of sync. The politics of populism are not as accommodating to the concepts of free trade and globalization that have sown the seeds of the current recovery; yet those very politicians may point to the recovery and take credit where none is due, In fact they may sow the seeds of the next downturn.

We Canadians are very aware of these factors as we gear up for renegotiating the NAFTA agreement.

 

Top Stock Picks 2017


Canadian Imperial Bank of Commerce, CM-T, Owned by clients and personally, Last Purchase Sept 16, 2016 $101.00

CM is Canada's fifth largest bank by market capitalization. Over the better part of the past decade, management has concentrated on de-risking and shoring up the balance sheet largely by retrenching and focusing on core competencies. The bank is now the most profitable as measured by return on equity and has one of the strongest capital bases. The recent purchase of PrivateBancorp  establishes CM with a larger foothold in US. This is a well run, well managed bank and CM has paid a premium to make this purchase. Most recently, the share price has pulled back as concerns about the Canadian mortgage market have been in the spotlight. At current prices, the bank yields around 4.6%.

Suncor Energy, SU-T, Owned by clients, Last purchase March 2, 2016 $32.94

Suncor is Canada's largest integrated oil and gas company. Suncor has a strong production base with quality long-term assets, a strong balance sheet, and an integrated business model smoothing to some extent the cash flow from the various business segments. Management has been focused of increasing efficiencies and positioning the company for future growth. Over the remainder of the year, Fort Hills and Hebron will be coming online. Suncor has a strong balance sheet to support and expand operations. At current levels, the stock yields 3.1%.

Goldcorp, G-T, Owned by clients, Last Purchase March 30, 2017 $19.43

Goldcorp is one of North America's largest gold companies that  now beginning to reap the rewards of major capital spending over the past few years as Penasquito is in production. Joint ventures with Barrick and Teck Resources will assist in driving costs down over the next few years as management begins to prepare for future growth in Arizona and Chile.

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We believe that investment management is about managing risk, not chasing speculative returns. Like to learn more? Please contact us here>> The opinions expressed here are ours alone. They are provided for information purposes only and are not tailored to the needs of any particular individual or company, are not an endorsement, recommendation, or sponsorship of any entity or security, and do not constitute investment advice. We strongly recommend that you seek advice from a qualified investment advisor before making any investment decision.  

CIBC assesses risks faced by Canadian investors in 2017

The Canadian economy faces "major downside risks" related to the incoming U.S. administration's trade policies and Republican-backed corporate tax reforms, according to a new report from CIBC Capital Markets.

These risks will impede the Bank of Canada's ability to tighten monetary policy, the report predicts.

CIBC risks Canadian investors 2017

CIBC assesses risks faced by Canadian investors in 2017

"We would need a huge and unlikely upside surprise to push the Bank of Canada into a rate hike this year," said Avery Shenfeld, CIBC chief economist. "Particularly since the Trump administration's trade-policy-by-Twitter and a Republican-backed corporate tax reform plan biased against import content both represent a major downside risk if Canada gets caught in the crossfire."

In the more negative scenario, Shenfeld expects the Canadian dollar to come under pressure. "The shock to U.S.-bound exports would engender a much steeper slide in the Canadian dollar, well beyond 1.39 Canadian dollars per U.S. dollar we expect to see on monetary policy differentials," he explained.

CIBC forecasts that Canada's real GDP will grow by 1.8% in 2017 and 2.0% in 2018, with growth in the energy sector offsetting a reduced contribution from housing and consumption.

The U.S. economy is predicted to show 2.3% growth in 2017 and 2.1% in 2018, although uncertainty is "extremely high" surrounding Trump policies, the bank said.

"For corporate Canada, the instinct would be to judge a becalmed outlook as reason to eschew active hedging for now. But the potential for a Trump in the night bump suggests looking for opportunities to hedge against a pullback in commodities, a weaker Canadian dollar, and a rise in long term rates," Shenfeld concluded.

Toronto based Canadian Imperial Bank of Commerce (TSE:CM, Mkt cap 43.73B, P/E 10.31, Div/yield 1.24/4.49, EPS 10.71, Shares 397.22M) is a global financial institution. CIBC provides a range of financial products and services to approximately 11 million individual, small business, commercial, corporate and institutional clients in Canada and around the world. The Company operates through three segments: Retail and Business Banking, Wealth Management and Capital Markets. The Company's Retail and Business Banking segment provides personal and business clients across Canada with financial advice, products and services in its banking centers or through remote channels, such as mobile advisors, telephone, online or mobile banking. The Company's Wealth Management segment provides advice and investment solutions. The Company's Capital Markets segment provides integrated credit and global markets products, investment banking advisory services and research to corporate, government and institutional clients around the world. More from Reuters »

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The opinions expressed here are ours alone. They are provided for information purposes only and are not tailored to the needs of any particular individual or company, are not an endorsement, recommendation, or sponsorship of any entity or security, and do not constitute investment advice. We strongly recommend that you seek advice from a qualified investment advisor before making any investment decision.  

 

Canadian consumers prioritise debt repayment in 2017

Paying down debt is the top financial priority for Canadian consumers in 2017, according to new research from CIBC.

CIBC Canadian consumers prioritise debt repayment 2017

CIBC – Canadian consumers prioritise debt repayment in 2017

The bank found that reducing or eliminating debt was at the highest level since 2010. It was the number one financial concern for 28% of the 1,507 Canadian adults questioned, up from 26% a year ago.

Other financial priorities for the coming year included: keeping up with bills or getting by (16%); growing existing savings or investments (11%); saving for a vacation or travel (8%); and saving for retirement (6%).

Of those prioritizing debt repayment, the vast majority (76%) were most concerned with paying their credit card and line of credit debts.

The survey also revealed that 70% of Canadians did not take on any new debt in the past 12 months, while 28% did. Among those incurring new debt, almost a third (32%) cited managing day-to-day expenses beyond their monthly income as the primary reason.

"With debt loads continuing to climb, it's encouraging that repaying debt remains a top priority for Canadians," commented Scott Wambolt, senior vice president of Retail and Business Banking at CIBC. "However, with some Canadians saying they are taking on debt just to cover day-to-day expenses and too few actually seeking advice on how to build a repayment plan, it's clear there is a gap when it comes to taking action on debt reduction."

CIBC found that just over half of those surveyed (52%) plan to reduce their spending on non-essential items to meet their 2017 financial goals. Yet only a quarter (26%) will actually set a household budget, and fewer still (12%) will meet with a financial advisor to get professional advice on how to reduce their debt and meet their financial goals.
 

What is Successful Investing? Learn more here>>

Download Our Free Special Report – How to Hunt For Value Stocks. Michael Sprung will share with you 5 stocks set for long-term gains here>>

We believe that investment management is about managing risk, not chasing speculative returns. Like to learn more? Please contact us here>>

The opinions expressed here are ours alone. They are provided for information purposes only and are not tailored to the needs of any particular individual or company, are not an endorsement, recommendation, or sponsorship of any entity or security, and do not constitute investment advice. We strongly recommend that you seek advice from a qualified investment advisor before making any investment decision.

 

Canadian Stock Picks — Michael Sprung on BNN Marketcall

Canadian Stock Picks

Canadian Imperial Bank of Commerce, CM-T, Owned personally and by clients, Last Purchase December 23, 2015, $92.49

CM is Canada’s fifth largest bank by market capitalization. Over the better part of the past decade, management has concentrated on de-risking and shoring up the balance sheet largely by retrenching and focusing on core competencies. The bank is now the most profitable as measured by return on equity and has one of the strongest capital bases. The recent purchase of PrivateBancorp establishes CM with a larger foothold in US. This is a well run, well managed bank and CM has paid a premium to make this purchase. As a result, the stock has languished somewhat against its competitors providing an opportunity for investors. At current prices, the bank yields around 4.9%.

canadian stock picks michael sprung bnn market call

Michael Sprung BNN Market Call Interview: Canadian stock picks and outlook

AGT Food and Ingredients Inc., AGT-T, Owned personally and by clients, Last Purchase December 18, 2014, $26.50

AGT is a leader in pulse processing for export and domestic markets. The company has had notable success in diversifying into food ingredients, an area that is facing increasing global demand. 2016 has been declared by the United Nations to be the International Year of the Pulse, highlighting the growing global demand for pulses. Recent stock supply levels may be cutting into current volumes that may result in lower seasonal results. The market appears to have priced this fact in given the recent pullback in the stock price. Export demand is growing and a larger fall harvest is anticipated.

Stuart Olsen Inc., SOX-T, Owned by clients, Last purchase April 19,2016, $6.77

Stuart Olson Inc, formerly The Churchill Corporation, is one of Canada’s largest construction firms providing general contracting and electrical building systems contracting in the institutional and commercial construction markets as well as electrical, mechanical and specialty services in the industrial construction markets. The stock has underperformed the market and its peers as investors have focused on its exposure to Western Canada. Going forward, there are plans by the governments of Alberta, Saskatchewan and BC, as well as the Federal government, to dramatically increase spending on infrastructure. At the end of the fourth quarter, SOX had a backlog of $1.96B(58% construction, 28% cost-plus, 5% design build and the rest in tenders). The Industrial Services Group while exposed to the oil sands, derives its revenue from maintenance, repair and operations in the energy, mining and hydro industries. Stuart Olsen has a good balance sheet. The dividend currently yields 7.4%.

OUTLOOK

North American markets have hit recent highs despite a growing list of negative geopolitical and business risks, particularly those stemming from the surprising vote in the UK to “Brexit”. At the same time, the global bond markets appear to be signalling an expected decline in economic activity. Governments out side of North America continue to attempt to stimulate economies through quantitative easing and proposed infrastructure spending. Over US$13 Trillion of sovereign debt is now at negative interest rates and the total continues to grow.

Politicians in North America and Europe are exploiting the public’s unrest through fear-mongering on the issues of globalization and free trade as was most evident in the Brexit vote and continues in the US presidential race. Whether or not politics can “trump” the economic and demographic cycles remain to be seen.

After a number of years of expansion fueled by debt, we could be entering a period of deleveraging that will stall global economic growth for a period and potentially caused markets to decline and volatility to increase. Investors should be prepared to take advantage in these circumstances to invest in well financed, well managed companies.

You can view the complete Market Call interview here>>

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Download Our Free Special Report – How to Hunt For Value Stocks. Michael Sprung will share with you 5 Canadian stock picks set for long-term gains here>>

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The opinions expressed here are ours alone. They are provided for information purposes only and are not tailored to the needs of any particular individual or company, are not an endorsement, recommendation, or sponsorship of any entity or security, and do not constitute investment advice. We strongly recommend that you seek advice from a qualified investment advisor before making any investment decision.

 

Stockwatch – Canadian Imperial Bank of Commerce Reports Healthy Profit In Q3

Stockwatch – Strong performance at the bank’s capital markets division was the main driver in boosting the bottom line.

Stockwatch – Canadian Imperial Bank of Commerce (TSE:CM, Mkt cap 41.89B, P/E 13.38, Div/yield 1.00/3.79, EPS 7.89, Shares 396.97M) has announced an encouraging 5% rise in profit in the third quarter, in comparison with the same period last year.

Stockwatch - Canadian Imperial Bank of Commerce 5% rise third quarter profit

Stockwatch – Canadian Imperial Bank of Commerce has announced an encouraging 5% rise in profit in the third quarter.

CIBC, Canada’s fifth-largest lender, saw its net income increase to $921 million from $878 million a year ago, which equates to $2.26 per share. The figures were better than forecasted by analysts, the report added.

Strong performance at the bank’s capital markets division was the main driver in boosting the bottom line, with profit at the wholesale banking unit rising 32% to $282 million, attributed to strong underwriting activity.

 

Gerald McCaughey, CIBC’s chief executive officer, praised the bank’s “solid” results, adding that they show the strength of its retail and wholesale banking franchises and durable wealth management platform.

The retail and business banking arm did in fact show a 4% drop in net income to $589 million. However, the Globe and Mail reported that the figure alone doesn’t tell the whole story, as the bank recently sold half of its Aeroplan credit card portfolio. Factoring this in, the division’s net income actually increased by 4% in the period.

Profit at the bank’s wealth management arm rose to $121 million, a 19% leap compared to the same three-month period a year ago. The unit accounted for 13% of total profit for the quarter, as CIBC continues to expand this area of its business.

McCaughey said the Toronto-based bank will continue to strive to be the leading bank for its clients. “Our clear focus on client service coupled with our strategic growth initiatives underpins our ability to deliver consistent and sustainable earnings,” he added.

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The opinions expressed here are ours alone. They are provided for information purposes only and are not tailored to the needs of any particular individual or company, are not an endorsement, recommendation, or sponsorship of any entity or security, and do not constitute investment advice. We strongly recommend that you seek advice from a qualified investment advisor before making any investment decision.