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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We believe that successful investors focus on the quality of the assets they buy. Speculators focus on guessing the future prices. 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

BNN Market Call – Outlook

After a troubling start to the year, recent rallies have pulled North American markets into positive territory. The same cannot be said in much of the rest of the world. While this respite in North America, and particularly Canada, has given investors some relief, the outlook going forward is far from certain. Many geopolitical and economic factors have yet to play out and have the potential to bring both positive and negative market reactions. Just last week we were reminded that terrorism is still with us as the attack on Brussels illustrated. Unrest is not just confined to the Middle East. Europe is still contending with the mass influx of refugees as well as economic tensions threatening the very existence of the European Union. Tensions in Russia/Ukraine, China and its neighbours, Brazil and Venezuelan political instability continue to persist.

In Canada, we are fortunate to be situated so close to the United States as their economy appears to be stronger and growing. This benefit is evident in the improving export of goods and services from Canada to the US.

Michael Sprung BNN Market Call Interview Market Outlook Top Picks

Michael Sprung BNN Market Call Interview: Outlook and Top Picks

In this environment we would advise caution. In many cases, the rally in share prices has, from our view, caused us to stand back as we are confident that more opportunities will become available as the year progresses.

BNN Market Call – Top Picks

Royal Bank, RY-T, Owned by clients, Last Purchase January 28 2016 @ $67.75

The Royal Bank is Canada’s largest financial institution with extensive domestic and wealth operations as well as global capital markets, custody and brokerage networks.

In the last quarter, Royal completed its acquisition of City National Bank, which has contributed to higher earnings in wealth management. Royal’s diversified business model and strong capital base will support earnings and dividend increases going forward.

Precision Drilling, PD-T, Owned by clients, Last Purchase September 23 [email protected] $5.00

Precision is the largest oilfield services company in Canada with operations domestically, in the US and internationally. The company has a marketing alliance with Schlumberger, whereby Precisions Tier 1 drilling rig offerings are paired with Schlumbergers state of the art assembly and services. The high grading of the fleet over the past few years has left precision with the best fleet in Canada. The Company has a reasonably strong balance sheet that combined with the superior rig fleet and large geographic footprint, should sustain the company through the recent malaise in the industry. The stock is attractive at current levels.

Stuart Olsen Inc., SOX-T, Owned by clients, Last purchase October 5 2015 @$5.49

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 7.2%.

You can view the complete Market Call interview 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.

 

Market Outlook & Top Picks – BNN Market Call Tonight

Market Outlook:

2015 was a tough year to be an investor, particularly if you were in a country where the economy and stock markets were exposed to energy and other commodities that suffered sharp price declines resulting from oversupply and slowing demand. Geopolitical instability weighed on investors’ concerns as tensions in the Middle East escalated causing mass migrations that elevated discord in the European Union that was already present from the debt crisis in several of the member countries and caused further friction between the US, Russia and China. In addition, investors waited with trepidation for the Federal Reserve in the US to hike interest rates despite high debt levels, slowing global economic activity and an already highly valued US dollar. As a result, investors are extremely wary of the economic environment that we enter into at the start of 2016.

While there is much to be concerned about, there are some potentially positive undercurrents that are running throughout the global economy. Within the energy and metal markets, producers have cut back capital expenditures to a significant degree. Consolidation is beginning to occur within these industries along with increasing asset dispositions at distressed prices. The oversupply stemming from Saudi Arabia will test the fortitude of the authorities as taxes are increased to cover large budgetary deficits that will serve to cause displeasure in the general population. These actions will serve to re-balance the supply/demand issues in the energy industry. Lower capital expenditures in both metals and energy will defer future production.

Market Outlook energy commodities.

Market Outlook – 2015 was a tough year to be an investor in a country where the economy and stock markets were exposed to energy and other commodities.

The strong US dollar will impact will put pressure on the profitability of US companies doing business abroad. Furthermore, margins will come under pressure as wage demands increase while low inflation diminishes the ability to increase prices, especially with the growing substitution from countries with weaker currencies. Shareholders are likely to demand that more capital be deployed in businesses and research and development to regain longer-term competitive advantage.

In Canada investors are concerned that new provincial and federal governments are advancing tax and spend policies. At least at the Federal level, we enter into this period in a strong fiscal position. In the interim, Canadian industry should benefit from the low value of the Canadian dollar to the extent that they export products and services.

We have witnessed a correction in many sectors of the Canadian market. Those companies with the financial and managerial wherewithal will take advantage of current conditions and prosper.

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. Since first recommending this company in June, the performance has been disappointing due to some operational problems at several of their investments, one of which resulted in a write-down. These issues now appear to be largely behind and Alaris has an expanding pipeline of deal flow with an expanded credit facility. We anticipate that profitability will increase as activities get back on track and dividend increases will follow.

Suncor Energy Inc., SU-T, Owned by clients, Last purchase December 21,2015, $35.00

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 recent pressure on energy prices has caused the energy related stocks to pull back significantly. Suncor has the financial strength and diversified base of operations to do well in this environment as evidenced by the opportunistic bid for Canadian Oil Sands. The dividend currently produces a 3.4% yield.

Stuart Olsen Inc., SOX-T, Owned by clients, Last purchase October 5, 2015, $5.49

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. Stuart Olsen’s Bulidings group has a $1.4 billion backlog and is well situated to get a share of the spending on social infrastructure. 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 9.0%.

Watch Michael Sprung interviewed on BNN Market Call Tonight 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 successful investors focus on the quality of the assets they buy. Speculators focus on guessing the future prices. 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.

 

Stuart Olson nets $250m in new contract awards

Stuart Olson Inc (TSE:SOX, Mkt cap 146.74M, P/E 21.44, Div/yield 0.12/8.56, EPS 0.26, Shares 26.36M) has secured $250 million in contracts for its industrial group and buildings group segments.

Stuart Olson new contract awards

Stuart Olson nets $250m in new contract awards.

The Winnipeg firm, which provides building construction, commercial and industrial electrical contracting, and industrial insulation services to clients in the public, private and industrial sector, said the new contract awards are “substantial wins” for both its Industrial Group and Buildings Group.

Stuart Olson’s Industrial Group has put pen to paper on the renewal of a three-year master services agreement (MSA) to provide maintenance and operations repair work (MRO) to a loyal oil sands customer.

Valued at $90 million over the three-year period, the MSA covers the provision of established as well as new services.

Meanwhile, Stuart Olson’s Buildings Group in Southern Ontario has agreed a $90 million project with the largest post-secondary institution in the province.

To top off a successful month, the Buildings Group in Alberta has been handed two contracts with a total value of $70 million: the first of which is a $40 million construction management contract for a 180-unit seniors’ care centre; the second a $30 million design-build project to construct a research and collections resource facility for a large post-secondary institution.

David LeMay, Stuart Olson’s president and CEO, said the MSA illustrates how the company, which operates office locations throughout British Columbia, Alberta, Saskatchewan, Manitoba and Ontario, is proactive in renewing existing MRO contracts.

“The post-secondary project awarded to our Buildings Group in Southern Ontario is a significant win for this emerging branch,” he added.

“Our ongoing strategy of growth within this large market focuses on pursuing properly sized projects through our collaborative methods of project delivery and this award demonstrates the success of our approach. The awards to our Buildings Group in Alberta reflects our strong relationships with both private and public repeat clients.”

Stuart Olson Inc is an Alberta based business engaged in building construction, commercial electrical contracting, industrial insulation contracting, industrial electrical and instrumentation contracting, civil construction and related services within Canada. It was previously known as The Churchill Corporation. The Company’s solution segment is further divided into three segments, private sector, public sector and industrial sector. The private sector consists of Offices, retail, hospitality, residential, light industry and food industry. The public sector consists of health care, education, sports and recreation, art and culture, civic and transport. The industrial sector consists of the oil and gas sector, mining sector, power and utilities, mid-streaming/gas processing, pulp and paper sector.

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.

 

Stockwatch – Michael Sprung on BNN Market Call Tonight

Stockwatch – Top Picks

Stockwatch – Cenovus Energy Inc., CVE-T, Owned by clients, Last Purchase May 12, 2014, $31.25

Cenovus is an integrated oil and gas company focused on the development of bitumen assets in Alberta with significant joint venture operations at Foster Creek and Christina Lake.  Production should ramp up strongly over the next few years resulting in increasing earnings, cash flow and potential dividend increases.  The stock has lagged the energy sector over the past year and appears attractive at current levels.

Stockwatch – Fortis Inc., FTS-T, Owned by clients, Last Purchase March 4, 2014, $30.55

Fortis is the largest investor owned gas and electric distribution utility in Canada with operations in the US and Belize.  Over the next few years, Fortis is expected to significantly increase its rate base.   The acquisition of UNS in Arizona is closed on August 15, well ahead of schedule.  The addition of UNS is a major step for the Company.  During this period of transition, the yield will support the stock and given the longer term anticipated earning growth, the investment should do well.

Stockwatch – Stuart Olson Inc., SOX-T, Owned by clients, Last Purchase March 20, 2014, $9.00

Stockwatch - Michael Sprung BNN Market Call Top Stock Pick Stuart Olson Inc formerly The Churchill Corporation

Stockwatch – Michael Sprung on BNN Market Call. Top Stock Pick: Stuart Olson Inc., formerly The Churchill Corporation

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 Company is recovering from an acquisition in 2010 that resulted in losses from poorly priced contracts.  With a record high backlog of projects at better margins, profitability should increase going forward.  The dividend currently yields 4.8%.

Stockwatch – Outlook:

Investors have been the beneficiaries of surging markets in North America over the past few years as the economies have recovered from the financial crisis.  Valuations have been stretched as multiples have expanded.  In this environment, taking some profits where securities have had large appreciation may be prudent.  A larger weighting in cash can provide a good option to be deployed should any market setback occur.

See Michael interviewed by Michael Hainsworth on BNN Market Call Tonight 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.

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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.