Michael Sprung Top Picks BNN Market Call – Feburary 21, 2018

TOP PICKS:

Bank of Nova Scotia, BNS-T, Owned by clients and personally, Last Purchase September 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. Loan growth in the Latin American markets has been robust. While exposed to Mexico (6% of profits), the future of NAFTA could be of some concern but to date there has not been any apparent deterioration in credit quality. Overall, we anticipate that International and Canadian Banking results will demonstrate positive trends when BNS reports results on February 27. The current yield of 4.1% is attractive as are the relative valuation parameters to its peers.

Michael Sprung’s Top Picks – BNN Market Call, Feb. 21, 2018

BCE Inc., BCE-T, Owned personally and by clients, Last purchase February 13, 2018 $56.24
BCE Inc. is Canada’s largest communications company. The company’s dominant infrastructure build provides some competitive advantage over its primary competitors. However, changes in technology and the competitive landscape will require large ongoing capital outlays. In the wireline business, BCE is leading in its quest to bring fibre to the home that will provide superior internet and related services. The wireless busines remains competitive promotions are expected to continue but BCE retains the largest market share. The media business remains challenging. In the current environment, we antcipate that BCE will more than hold its own position in the competitive landscape and the current yield of 5.1% is attractive given the likelyhood of future dividend increases.

Enbridge Inc., ENB-T, Owned by clients, Last Purchase November 16, 2017 $44.72
Enbridge Inc. is a leading energy generation, distribution and transportation company in the US and Canada. Its pipeline network includes the Canadian Mainline system, regional oil sands pipelines and natural gas pipelines.

The company also owns and operates a regulated natural gas utility and Canada’s largest natural gas distribution company. Additionally, Enbridge generates renewable and alternative energy with 2,000 megawatts of capacity. While rising interest rates and concerns about funding have constrained stock performance recently, free cash flow and an objective of raising the dividend by by 10% annually through 2020 will be reflected in future share performance. Enbridge has a project backlog of $22 billion that will benefit future cash flows. Non-core asset sales of a $3 billion this year and a further $7 billion later will be supportive of their capital plan . The recent pullback in the share price has resulted in a current attractive yield of 6.2%

Outlook:

In the last month, we have witnessed the return of some volatility in the global stock markets. While valuations have corrcted somewhat, They are still above their longer term norms. To date, there have not been any notable downward revisions in global economic growth over 2018. However, ten years is an exceedingly long time for an economic expansion to continue without a slowdown or recession. During any expansion, there are always elements in the economy that accumulate until things come to a breaking point.

All of the same geopolitical concerns stemming from Washington, North Korea, the Middle East and elsewhere remain. NAFTA negotiations drag forward with little progress in eveidence.

All of these factors lead us to continue exercising caution and prudence in the current environment.

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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.

 

BCE (TSE:BCE) to acquire remainder of Q9 Networks for $675m

BCE Inc. (TSE:BCE, Mkt cap 54.96B, P/E 20.00, Div/yield 0.68/4.32, EPS 3.16, Shares 868.62M) is buying out the remainder of data centre operator Q9 Networks Inc. for $675-million as it looks to make ground in the burgeoning hosting and cloud services sector, The Globe and Mail reports.

BCE acquire Q9 networks

BCE (TSE:BCE) to acquire remainder of Q9 Networks for $675m

Back in 2012, the Montreal-based firm took a 35.4% share in Q9 as part of $1.1-billion takeover by a consortium of investors.

BCE has now made the move to buy out its fellow investors, Ontario Teachers’ Pension Plan and U.S. private equity firms Providence Equity Partners and Madison Dearborn Partners.

The $675-million transaction, which include the assumption of the data centre operator’s debt, will give BCE the platform to compete with fellow Canadian telecom providers and major U.S. and global tech and cloud-computing players in the data centre and services space.

“The acquisition supports Bell’s ability to compete against domestic and international providers in the growing outsourced data services sector,” BCE said in a brief statement, adding that it expects to tie-up the deal by the end of the year.

Commenting on the deal, Citigroup Global Markets Inc. analyst Michael Rollins highlights the market entry of Zayo, the U.S. company that acquired Allstream Inc. in January, and the launching of new offerings by Rogers Communications Inc. as evidence that the enterprise category is getting increasingly competitive.

Since its original investment in Q9 in 2012, BCE has had a say in the running of 27 Q9 data centres, and the new deal will build on that existing relationship, rather than radically change it.

“We’re not announcing any changes to Q9 operations,” BCE spokesman Mark Langton confirmed.

BCE did not disclose exactly how much it is paying its former partners in cash for the balance of the company, stating only that the deal includes Q9’s net debt but not BCE’s existing ownership interest.

BCE Inc. (TSE:BCE) is a Verdun QC based communications company. The Company provides residential, business and wholesale customers with a range of solutions to all their communications needs, including wireless, high-speed Internet, Internet protocol television (IPTV) and satellite TV, business Internet protocol (IP) broadband, and information and communications technology (ICT) services. The Company’s segments include Bell Wireless, Bell Wireline and Bell Media. The Company’s Bell Wireless segment provides wireless services that are available to virtually all of the Canadian population. The Bell Wireline segment includes voice and data network; high-speed fiber deployment, and bell direct to home (DTH) satellite television service. The Company’s Bell Media segment offers specialty and pay television, radio, digital media and out-of-home advertising. The Company, through Bell media, operates approximately 110 radio stations in over 50 markets across Canada. 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.

 

TSE:MBT – Manitoba Telecom Service shareholders approve acquisition by BCE

Shareholders of Manitoba Telecom Service Inc. (TSE:MBT, Mkt cap 2.80B, P/E 56.41, Div/yield 0.32/3.45, EPS 0.67, Shares 74.20M) have approved its planned acquisition by BCE Inc. (TSE:BCE, Mkt cap 52.79B, P/E 19.13, Div/yield 0.68/4.51, EPS 3.16, Shares 868.62M), Canada’s largest communications provider, the two companies announced last week.

TSE:MBT - Manitoba Telecom Service shareholders approve acquisition by BCE

TSE:MBT – Manitoba Telecom Service shareholders approve acquisition by BCE

Bell has pledged to invest $1 billion in Manitoba in the five years following the acquisition. It has also said it will expand broadband wireless and fibre optic communications services in the province.

Initially, Bell and MTS intend to complete wireless coverage along Highway 75. The highway is a key transportation corridor linking Winnipeg and other Manitoba communities with the U.S. border.

Bell’s investment will also include the introduction of its Gigabit Fibe Internet service, offering internet speeds on average up to 20 times faster than those currently available to MTS customers; Fibe TV, its broadband television service; expansion of the company’s LTE wireless network, with average data speeds twice as fast as those currently available to MTS customers; and integration of the MTS Winnipeg data centre operations into Bell’s national network of 27 data hosting and cloud computing centres across Canada.

TSE:MBT – the deal was approved by an “overwhelming” 99.66% of the 43,098,172 votes cast.

“This strong support reflects the meaningful value that shareholders will receive as a result of this transaction, which also provides compelling benefits to MTS customers, employees and to the province of Manitoba,” commented Jay Forbes, president and CEO of MTS. “With these shareholder approvals in place, we will continue to work with BCE to secure the necessary regulatory approvals with a view to closing the transaction as expected.”

BCE Inc. is a Verdun QC based communications company. The Company provides residential, business and wholesale customers with a range of solutions to all their communications needs, including wireless, high-speed Internet, Internet protocol television (IPTV) and satellite TV, business Internet protocol (IP) broadband, and information and communications technology (ICT) services. The Company’s segments include Bell Wireless, Bell Wireline and Bell Media. The Company’s Bell Wireless segment provides wireless services that are available to virtually all of the Canadian population. The Bell Wireline segment includes voice and data network; high-speed fiber deployment, and bell direct to home (DTH) satellite television service. The Company’s Bell Media segment offers specialty and pay television, radio, digital media and out-of-home advertising. The Company, through Bell media, operates approximately 110 radio stations in over 50 markets across Canada. 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.

 

BCE looks to strengthen its presence with $3.1-billion Manitoba Telecom purchase

BCE Inc. (TSE:BCE, Mkt cap 51.55B, P/E 18.69, Div/yield 0.68/4.62, EPS 3.16, Shares 868.62M) says acquiring Manitoba Telecom Services Inc. for about $3.1 billion (US$2.5 billion) in cash and stock will provide its communications subsidiary Bell with additional growth opportunities.

BCE Manitoba Telecom purchase

BCE looks to strengthen its presence with $3.1-billion Manitoba Telecom purchase

Canada’s biggest telecommunications company will acquire Manitoba Telecom for C$40 a share, extending its presence westward and further consolidating the country’s wireless market, Bloomberg reports.

The purchase, which is reported to be worth $3.9 billion including debt, gives BCE a greater presence in central Canada – an area where rivals Telus Corp. and Rogers Communications Inc. currently reign supreme.

It also sees BCE continue its years-long acquisition spree, having acquired retail distributors the Source and Glentel, broadcaster CTV, an interest in Maple Leaf Sports and Entertainment, and Astral Media in the last eight years.

It was also part of an investor group that acquired Q9 data centres and, in 2014, it took Bell Aliant private in a transaction worth almost $4 billion.

However, the proposed purchase of Winnipeg-based MTS will first have to tick all the questions posed of it by the new Canadian government, which knows full-well that green lighting the deal would set a significant precedent.

The previous Conservative government was determined to strengthen smaller players like Manitoba Telecom, Mobilicity and Wind Mobile and tried to establish four strong competitors in each market in order to do so.

It also blocked repeated attempts by Telus to buy Mobilicity and sold wireless spectrum to smaller players at a subsidized price.

BCE Chief Executive Officer George Cope said on a conference call with BCE and MTE executives that his company will work with government officials over the next nine months “to meet what requirements they have or don’t have.”

BCE Inc. is a Verdun QC based communications company. The Company provides residential, business and wholesale customers with a range of solutions to all their communications needs, including wireless, high-speed Internet, Internet protocol television (IPTV) and satellite TV, business Internet protocol (IP) broadband, and information and communications technology (ICT) services. The Company’s segments include Bell Wireless, Bell Wireline and Bell Media. The Company’s Bell Wireless segment provides wireless services that are available to virtually all of the Canadian population. The Bell Wireline segment includes voice and data network; high-speed fiber deployment, and bell direct to home (DTH) satellite television service. The Company’s Bell Media segment offers specialty and pay television, radio, digital media and out-of-home advertising. The Company, through Bell media, operates approximately 110 radio stations in over 50 markets across Canada. 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.

 

BCE Inc. to pay $1.25-million penalty for “astroturfing”

BCE Inc. (TSE:BCE, Mkt cap 48.46B, P/E 19.40, Div/yield 0.65/4.55, EPS 2.94, Shares 840.33M) has promised to improve its “corporate compliance program” after settling on a penalty of $1.25 million for allowing its employees to write online reviews of Bell products and services without disclosing their ties to the company, The Globe and Mail reports.

Canada Stockwatch BCE pay penalty astroturfing

Canada Stockwatch – BCE Inc. to pay $1.25-million penalty for “astroturfing”

The penalty, imposed by the Competition Bureau, is the first of its kind in the industry and sends the message to marketers that they are responsible for policing deceptive practises and making employees aware of the standards that exist in online marketing.

The Competition Bureau was made aware of the matter after Bell admitted that some of its employees were “overzealous” in posting reviews for Bell Canada’s “MyBell Mobile” application on the Apple AppStore.

Scott Stratten, author and founder of Oakville, Ont.-based firm Unmarketing, was the first to flag the reviews, which were posted under the names of some Bell employees, but they did not make known their corporate affiliation.

When questioned about the deceptive online reviews by The Globe and Mail last year, Paolo Pasquini, director of communications and social media at Bell Canada, wrote in an e-mail: “The postings were the result of an overzealous effort on the part of our service team to highlight the app. It’s certainly not Bell’s practice to encourage employees to rate our products, and we’re sending a clear message out to the team to that effect.”

This technique, called “astroturfing”, is thought to be widespread throughout the industry, prompting the Competition Bureau to send out a bulletin last year reminding consumers not to “buy into fake online endorsements” and to report any cases to the watchdog.

According to the Competition Bureau, Bell “acted quickly” to remove the ratings and reviews once they were brought to its attention, and co-operated with the bureau’s inquiry.

“Nevertheless, the bureau determined that these reviews and ratings created the general impression that they were made by independent and impartial consumers and temporarily affected the overall star rating for the apps,” the bureau said in a release.

BCE Inc. is a Canadian communications company, with head offices in Verdun, Quebec. The Company provides residential, business and wholesale customers with a range of solutions to all their communications needs, including wireless, high-speed Internet, Internet protocol television (IPTV) and satellite TV, business Internet protocol (IP) broadband and information and communications technology (ICT) services. The Company operates in four segments: Bell Wireless, Bell Wireline and Bell Media. In addition, the Company also holds a 35.4% indirect equity interest in Q9 Networks Inc. (Q9), a 28% indirect equity interest in Maple Leaf Sports & Entertainment Ltd. (MLSE), an 18.4% indirect equity interest in entities that operate the Montreal Canadians Hockey Club and the Bell Centre in Montreal, and a 15% equity interest in The Globe and Mail. As of December 31, 2014, through Bell media, the Company 106 radio stations in 54 markets across Canada reached on average 17.4 million listeners per week from coast to coast. 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.

 

Canada Stockwatch – Bell Canada Urges Shareholders To Reject Call For Quota For Women Board Members

Canada Stockwatch – Bell Canada, formally known as BCE Inc. (TSE:BCE, Mkt cap 45.84B, P/E 18.26, Div/yield 0.65/4.77, EPS 2.98, Shares 841.39M) is running the risk of enduring a PR nightmare after it told a shareholder-activist group it doesn’t “have a legal obligation to add more women” when asked to comment on a proposal by the activists to boost female representation from the 15% of directors it maintains today to a minimum of 40% by 2020.

Canada Stockwatch Bell Canada Shareholders Quota Women Board Members

Canada Stockwatch – Bell Canada Urges Shareholders To Reject Call For Quota For Women Board Members

As the Financial Post reports, the Montreal-based telecom giant has called for all shareholders to reject the demands for a quota, with BCE maintaining that females will occupy at least one-quarter of independent directorships by the end of 2017.

The proposal by a by a group of shareholders called the Mouvement d’éducation et de défense des actionnaires (Médac), a Montreal-based shareholder-activist group, asks BCE to go beyond its initial target and ensure its 13-strong board comprises at least three women.

As it stands, two of BCE’s board members are female: Sophie Brochu, of Quebec’s energy sector, and Carole Taylor, B.C.’s former minister of finance.

Bell spokeswoman Jacqueline Michelis told the FP via email that BCE’s current target is in line with that of many peer corporations in North America, as well as the Catalyst Accord call to boost the proportion of FP500 board seats held by women to 25% by 2017.

She added: “The target will be reviewed on a regular basis by the Governance Committee.”

Médac president Daniel Thouin said that the activist group was asked to remove the proposal by BCE, but it refused on the grounds that “their target was too low for us.”

“It’s just three places. It’s so low,” he added.

A decision on the proposal will come down to a vote at the annual meeting on April 30.

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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.

 

Bell Canada Seeks To Appeal Mobile TV Ruling

Bell Canada, formally known as BCE Inc. (TSE:BCE, Mkt cap 46.02B, P/E 18.36, Div/yield 0.65/4.75, EPS 2.98, Shares 840.33M) is hoping to be able to press its case in the court of appeal against a ruling that prohibits the company from transmitting its own content to customers' mobile devices for lower rates than it demands for sending third-party content.

Bell Canada Appeal Mobile TV RulingAs Reuters reports, Canada's largest telecoms company and other large domestic telcos have been engaged in a process of acquiring media assets in recent years, in order to command more control over the programming they send.

However, the move looks to have been somewhat in vain after the Canadian Radio-television and Telecommunications Commission ruled that BCE must change the pricing of the app responsible for streaming the content.

BCE, which operates under the Bell brand, said the app – which costs $5 per month and allows users to stream up to 10 hours of television that do not count against their monthly wireless data caps – is an extension of its broadcasting services.

It therefore believes the TV streaming service should not come under the same scrutiny as rival media companies such as Netflix and Google's YouTube, which are prevented from discriminating between different pieces of content.

"The CRTC should be supporting Canadian broadcast innovations like Bell Mobile TV, not trying to inhibit them," Bell spokeswoman Jacqueline Michelis wrote in an email. "The CRTC itself considers the service a broadcast undertaking and should have regulated it in that way but didn't, which is why we are turning to the court."

Permission to appeal was sought late last week, with the matter to be heard at the Federal Court of Appeal if BCE is successful.

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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.

 

Bell Canada Enterprises Announces Significant Increase In Profit

Bell Canada Enterprises tops estimates on new wireless customers, ups dividend by 5.3% to $2.60

Bell Canada Enterprises BCE Inc. (TSE:BCE, Mkt cap 45.83B, P/E 18.64, Div/yield 0.62/4.46, EPS 2.97, Shares 840.33M) appears to be taking market share from its cable-TV competitors, posting a near 10% increase in fourth-quarter profit last week, the Financial Post reports.

Canada's largest telecommunications company showed strong wireline subscriber and revenue gains, which analysts say shows that the firm is becoming a bigger player in the cable-TV market.

Bell Canada, which also hiked its annual dividend by 5% to $2.60, added 177,698 net new customers in the fourth quarter – 42,190 of which were television subscribers.

The Montreal-based company, which operates under the Bell brand, also posted healthy gains in wireless results, and its Internet-TV service enjoyed a significant and somewhat surprising increase in uptake.

Wireline revenue climbed 1% to $2.63 billion, the first year-over-year growth since the third quarter of 2010, Canaccord Genuity analyst Dvai Ghose pointed out.

In wireless, Bell Canada acquired 118,120 postpaid customers, while losing 34,622 prepaid customers, which the telco's chief financial officer Siim Vanaselja says shows that it is moving in the right direction.

"Our financial targets for this year reflect our expectation for continued strong wireless segment profitability, positive growth in wireline segment performance, as well as healthy earnings and free cash flow growth from operations," he said.

Fourth quarter net income rose to $542 million from $495 million in the year-earlier period. On a per-share basis, net earnings were flat at 64 Canadian cents.

In the next 12 months, Bell Canada forecasts revenue growth of around 1% to 3% and adjusted earnings per share of $3.28 to $3.38, which represents a rise from $3.18 in 2014.

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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.