Michael Sprung’s Top Stock Picks on BNN’s Market Call Tonight, December 13, 2017

Michael Sprung’s Outlook

As 2017 comes to a close global stock markets have continued their ascent throughout the fourth quarter of 2017. Many economists pontificate on the synchronized global recovery underway, evident from improving employment levels and some muted signals of inflationary growth. Commodities have been on a roller coaster as perceived demand has spiked up and retreated over the course of the quarter. Wage demands exhibit some signs of accelerating but remain largely tempered by companies shifting to larger expenditures on technology as a means of enhancing productivity. We have yet to see a significant correction in the markets as investors appear to be complacent or unaware of the rising valuation levels and the growing geopolitical tensions in the world.

Michael Sprung Top Picks BNN Market Call

Michael Sprung’s Top Picks BNN Market Call: December 13, 2017

A number of factors could come into play that would precipitate a more meaningful market correction than we have seen in the last ten years. In Canada, concerns remain centered around the NAFTA negotiations. Since the Brexit vote and the start of the Trump presidency, a backlash against global free trade has been growing, causing uncertainty in the business community, thus dampening the appetite for capital investment. Other geopolitical factors are also of concern. North Korea’s nuclear threat and heightened discord with the US has been prominent in the headlines as have tensions in the Middle East, Venezuela, Spain, Russia and the Ukraine. Monetary concerns in Greece,Italy, Spain and Portugal have not gone away.

All of these factors lead us to exercise caution and prudence in our investment stance. Investors have to look hard to find well financed, well managed and reasonably priced companies.

Michael Sprung’s Top Stock Picks

Alaris Royalty, AD-T, Owned personally and by clients, Last Purchase November 7, 2016, $19.84

Alaris Royaly invests in a diversified range of North American private companies with the objective to generate cash flows to support dividends to shareholders. Problems within a number of investee’s over the past year have hindered progress. Many of these concerns have largely been dealt with and now the company is poised to enter a renewed period of growth. Alaris is deploying capital in new partners and has made their largest investment to date in Sales Benchmark Index,LLC of US$85 million. AD is well positioned for modest capital deployment in 2018 that should result in cash flow growth and a lower payout ratio.

Hudbay Minerals Inc., HBM-T, Owned personally and by clients, Last purchase September 8, 2017, $9.41

Hudbay’s flagship copper mine Constancia is performing well and expectations are that zinc production in Manatoba will ramp up in 2018. Longer term the Rosemont copper mine in Arizona offers more growth. Hudbay has been improving the balance sheet paying down debt providing greater liquidity for future investment.

George Weston Limited, WN-T, Owned by clients, Last Purchase September 9, 2016, $74.59

Recent setbacks in frozen foods and the cautionary outlook in the grocery industry have resulted in an opportunity for longer term investors as the shares now trade at attractive valuation levels. We expect the incoming president, Richard Dufresne, will continue to focus on very tight expense control and operational efficiencies in Weston Foods and Loblaws. Weston’s ownership in Loblaws will surpass the 50% level in 2018.

You can view the complete interview here>>

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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.

 

Michael Sprung Top Stock Picks Canada on BNN’s Market Call, June 7, 2017

Contrary to the negative views expressed by the media, US investors have continued to embrace the policies of the Trump administration as evidenced by the markets advance. This enthusiasm has been most evident in the larger capitalized companies that would stand to benefit the most from lesser regulation and lower taxes. The Canadian markets have been less robust despite some positive economic indications that the Canadian economy has exhibited some positive growth of late in GDP that has been greater than that of the US. A lot of the Canadian media has caused concerns over the housing situation in Vancouver and Toronto as well as speculating on the uncertainties in renegotiating the NAFTA agreement. The European economies have also exhibited some positive trends despite some political disruptions, as have a number of the Asian economies.

Michael Sprung, Top Picks, Scotiabank, Canadian Natural, Hudbay Minerals

Michael Sprung's Top Picks: Scotiabank, Canadian Natural, Hudbay Minerals

The markets have generally been in an uptrend since the financial crisis ten years ago. Valuations are stretched but positive earnings surprises have kept the trend intact for the time being. It has been a slow, tepid cyclical recovery that is often typical following a financial crisis. A wane in investors' confidence over the Trump administration's ability to deliver its agenda could have a negative impact on current valuations.

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. However, economic forces tend to prevail over the longer term and investors should be prepared to take advantage of dislocations in the interim.


Top Stock Picks Canada.


Bank of Nova Scotia, BNS-T, Owned personally and by clients. Last purchase Sept. 16, 2016 $69.85

The Bank of Nova Scotia is the most international of the Canadian banks with branches in the Caribbean, Central and South America. In the most recent quarter, record Global Banking and Capital Markets earnings reflected the benefits of management's investments in operational efficiencies and technology over the last few years. BNS has one of the strongest capital bases of the large banks. The stock currently yields 4.0%.

Canadian Natural Resources Ltd., CNQ-T, Owned by clients, Last   Purchase August 26,2015 $25.54

Canadian Natural resources is one of Canada's leading senior producers of oil and gas. CNQ is one of the best managed and best capitalized companies in the energy sector. As such, CNQ has weathered the seismic swings in energy prices and has been in a position to take advantage of opportunities. The recent purchase of a large working interest in the Athabasca Oil Sands Project will decrease the overall production decline rate and add to earnings. The dividend yield is 2.8%.

HudBay Minerals Inc., HBM-T, Owned personally and by clients, Last purchase April 7, 2016 $4.24

HudBay Minerals is one of Canada's leading producers of zinc, copper and precious metals with operations in Canada, Peru and the US. Constancia has made progress addressing some equipment issues. The expected ramp up of base metal production at Lalor with a mine plan for the gold zone resources and permitting later in the year for Rosemont will provide positive catalysts going forward.

You can view this and Michael's past appearences on Market Call here>>

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 clients gain from our focus on the long-term fundamentals and not chasing short-term trends. 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.  

Top Stock Picks – Michael Sprung on BNN Market Call Tonight

Top Stock Picks

Manulife Financial Corporation, MFC-T, Owned personally and by clients

Manulife is a leading Canadian-based financial services group with operations in Asia, Canada and the United States. Over the past five years, the company has made tremendous strides in de-risking the balance sheet and improving profitability through increasing wealth management operations as well as redirecting the mix of products sold. Recent quarter results disappointed as negative policyholder experience in the firm’s US Long Term Care(LTC) Business overshadowed positive developments elsewhere. Excluding the LTC hit, results from the US divisione were inline with expectations. Canada and Asia reported favourable trends in earnings. The market reacted negatively to these results. MFC has the strongest capital base of the insurers. Going forward, we expect the problems within LTC will be dealt with and at current levels, the shares represent good value and yield 4.2%

Top Stock Picks Michael SprungManulife, MFC, Suncor, SU, HudBay, HBM

Top Stock Picks from Michael Sprung: Manulife, MFC, Suncor, SU, HudBay, HBM

Suncor Energy, SU-T, Owned by clients

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. The latest quarter exhibited mixed results, partially as a result of the wildfires in Northern Alberta that affected both production and operating expenses. We anticipate that production will increase both organically and perhaps through acquisition. Suncor has a strong balance sheet to support and expand operations. At current levels, the stock yields 3.2%.

HudBay Minerals, HBM-T, Owned personally and by clients

HudBay Minerals is one of Canada’s leading producers of zinc, copper and precious metals with operations in Canada, Peru and the US. While the share price has appreciated significantly in the past few months, positive developments are still on the horizon that will enhance the underlying value of the company. Delayed shipments impaired sales in the latest quarter that should be made up going forward. Liquidity has been improved as the large Constancia mine is now commissioned and additional credit facilities have been of this site is possible obtained. Mill throughput in Constancia was constrained by liner wear in the mill that has now been repaired. Further development in Peru is a possibility. Improvements in Manitoba at Lalor and Reed are also noted.

Outlook:

North American markets have continued their upward trajectory 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. As the US election draws nearer, more noise from the political pundits will distract attention from the longer term fundamentals.

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 cause markets to decline and volatility to increase. Investors should concentrate on the longer term issues and be prepared to take advantage of current circumstances to invest in well financed, well managed companies.

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.

 

Market Outlook & Top Picks – BNN Market Call Tonight, Feb. 4, 2016

BNN Market Call Tonight – Market Outlook

Investors’ concerns came to the forefront during the first month of 2016 as many of the global stock markets posted negative returns. Fears of slowing economic activity precipitated much of this sell-off as indications of weaker conditions in China and more countries adopting negative interest rate policies (notably Japan), less than anticipated economic indications from the US and a technical recession in Canada appeared to corroborate this negative sentiment.

In this environment, industries are transitioning as many companies face economic hardship. Within the energy and metals markets, producers have cut back capital expenditures, reduced expenses and lowered or eliminated dividends to a significant degree. Consolidation is beginning to occur within these industries along with increasing asset dispositions at distressed prices. Fiscal realities will eventually cause Saudi Arabia and other large oil producing nations to come to terms with continuing to feed oversupply while running massive budgetary deficits. These actions will serve to re-balance supply/demand factors along with the reduced supply stemming from the lower level of capital expenditures.

As we enter the next reporting period, the effects of the strong US dollar will be reflected in the profitability of US companies doing business abroad. Margins will also come under pressure as wage demands increase while low inflation undermines the ability to increase prices, especially with growing substitution from countries with weaker currencies. Business leaders will be prompted to devote more capital to research and development to regain longer-term competitive advantage.

In Canada, the effects of the downturn in the energy and mining sectors are still reverberating throughout the economy. We have seen a pull back in the prices of securities in the financial, consumer discretionary and other sectors that could be further impacted by the fallout. Some relief was evident from the neutral stance of the energy royalty review announced by the Alberta government in the face of current conditions. We can only hope that the federal and other provincial governments will exercise similar restraint. At the federal level, we enter this period in a strong fiscal position.Canadian industry should derive some benefit from the weak Canadian dollar to the extent that they export products and services.

During this time of transformation, investors have the opportunity to reposition their portfolios and invest in those companies with the financial and managerial wherewithal to take advantage of current conditions and prosper.

Michael Sprung BNN Market Call Interview Market Outlook Top Picks

Michael Sprung BNN Market Call Interview: Market Outlook and Top Picks

BNN Market Call Tonight – Top Picks:

Bank of Nova Scotia, BNS-T, Owned personally and by clients, Last Purchase December 23, 2015 $57.16

The Bank of Nova Scotia is the most international of the Canadian banks with branches in the Caribbean, Central and South America. The Canadian banks have been impacted by the recent volatility in the markets. BNS is now selling at levels that long term investors should find attractive as the premium valuation has fallen. The dividend yield is now greater than 5%

ARC Resources Ltd, ARX-T, Owned by clients, Last Purchase December 17, 2015 $15.95

ARC Resources Ltd. is a Canada-based oil and gas company. The company’’s business activities include the exploration, development and production of crude oil, natural gas and natural gas liquids in five core areas across western Canada. The Company is also engaged in the Sunrise gas plant construction. Its operations are focused in five core areas across western Canada. ARC Resources has a strong balance sheet. The shares currently yield 6.6%.

HudBay Minerals Inc., HBM-T, Owned Personally and by Clients, Last Purchase December 23 2015 $5.71

HudBay Minerals is one of Canada’s leading producers of zinc, copper and precious metals with operations in Canada, Peru and the US. Constancia, a major copper-molybdenum-silver mine in Peru, has been ramping up production over 2015. It is expected that recoveries will improve as mill throughput and head grades have exceeded expectations. With other projects coming on stream over the next few years, we anticipate that valuation levels will increase.

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.

 

BNN Market Call Interview: Market Outlook and Top Picks

Market Call Outlook

Global markets have exhibited high volatility as concerns regarding the health of the global economy have persisted. While much of the international focus has centered around the slowing economy in China, not many markets escaped the negative pressures in the third quarter of 2015.

Economic factors were not the only factors weighting on investors’ concerns in the third quarter. Continuing strife in Syria and the resultant mass emigration into Europe, the build up of Russian and US tensions, Chinese displays of military might and the ongoing political issues in Europe all played a role in stocking investors’ fears.

Through much of the quarter, the US market remained positive as signs of economic expansion continued. Then, the Federal Reserve elected not to increase interest rates at this time casting doubts in investors minds as to the underlying integrity of the recovery.

Canadian investors have been caught up in a tediously long election debate. The uncertainties resulting from the threat of a change of government are adding to the concerns stemming from the collapse in energy prices and the waning demand for base metals.

What we are witnessing is a period of adjustment after seeing markets increase since 2008. While there are legitimate concerns that economies are slowing down, the decline in many markets has over reacted. Some of the downward pressure may be attributable to the high degree of margin that had built up over the last few years. However, many of the factors affecting the markets are transitory. It is during these periods that the stocks of good companies get driven down with those of weaker companies. Investors should be using this period of adjustment to upgrade their security positions in stronger, better managed companies in order to participate in the profits to be derived over the next business cycle.

Michael Sprung BNN Market Call Interview Market Outlook Top Picks

Michael Sprung BNN Market Call Interview: Market Outlook and Top Picks

Market Call Top Picks:

Alaris Royalty Corp., AD-T, Owned Personally and by Clients: Last Purchase August 26, 2015, $26.08

Alaris Royalty is a unique investment firm that invests in a diversified range of private companies with solid long term histories and stable management teams. The nature of the investment allows Alaris to participate in future growth while the entrepreneurs maintain control provided certain agreed upon benchmarks are met. Management has had a successful track record in identifying good investment opportunities. With growth, the number of opportunities presented to management has increased dramatically however, management has exhibited tremendous discipline in being selective with whom they partner. As investments and cash flow have grown, dividends have increased. We anticipate that investors will continue to participate in Alaris’ growth.

HudBay Minerals Inc., HBM-T, Owned Personally and by Clients, Last Purchase August 26, 2015: $5.81

HudBay Minerals is one of Canada’s leading producers of zinc, copper and precious metals with operations in Canada, Peru and the US. Constancia, a major copper-molybdenum-silver mine in Peru, has been ramping up production over 2015. It is expected that recoveries will improve as mill throughput and head grades have exceeded expectations. Transportation issues are being addressed and should be resolved by year end. With other projects coming on stream over the next few years, we anticipate that valuation levels will increase.

Aecon Group, ARE-T, Owned by clients, Last Purchase June 16, 2015, $12.50

Aecon Group is one of Canada’s largest construction companies. A large portion of Aecon’s business is related to the energy sector and the company’s stock price has been under pressure as a result. However, Aecon’s backlog in other infrastructure transportation and nuclear projects has been growing. The more sophisticated projects should result in higher profitability. Over the last number of years, management has taken steps to strengthen the financial position of the company. At current prices, the stock presents good value to investors for longer term appreciation.

Watch Michael’s complete Market Call Interview with Amber Kanwar on BNN here>>

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 clients gain from our focus on the long-term fundamentals and not chasing short-term trends. 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.