Tuesday, September 25, 2018

Del Vicario on Growth Stocks


This is just a short post on what I derived from watching a recent Market Call Tonight show.

One of the best asset managers in Canada to listen to is Jason Del Vicario of Hollis Wealth. He says it like it is, to the point and invests in top quality growth stocks. This is another strategy I try and employ and mix in with some income stocks to grow my money

Jason Donville of DKAM has said the only person he would trust besides himself to manage money would be JDV. High praise indeed. I never miss an opportunity to listen to his latest comments when he comes on BNN. Monday was one of those nights.

Some of the stocks he made comments on included; Molson Coors, Spinmaster, The Stars Group, Sangoma, Open Text, Parkland Fuel, Shopify, Salesforce, New Flyer, Alibaba, Transcanada, Franco Nevada, Canadian Tire and Tesla.

He also commented on Canadian Banks and whether you should buy individual banks or the ETF ZBK. He would prefer the big cap names of Royal or TD. He doesn't buy banks because they are low growth names and he doesn't invest for dividends.

You can go to stockchase.com for more of his in depth analysis of what he had to say on each individual name or the BNN website and listen to some short clips of his appearance. Spinmaster is the biggest position in the fund he manages.

The point of my blog post is to highlight the growth names he recommends and has recommended in the past as advice to follow up on and possibly invest in.


Top Past Picks of 20 June 2018

Dollarama (DOL) @ $52.82 post split, Now $42.11 down 19%

Constellation Sotware (CSU) @ $1054.64 Now $950.76 down 10%

Spinmaster (TOY) @ $ 57.10 Now $53.45 down 7%

His top picks have not done that well but in fairness it's only a 3 month performance snap shot. He's down on average of 12% on just these 3 picks. If you had owned the index through XIU you would be even during the same time frame.

I own all 3 of these picks but purchased my shares at much lower prices.

Let's look at what picks JDV made over a year ago.

It always matters when you buy a company so take your time and study hard before putting your money to work.

Past Picks 1 Year Old (18 Sep 2017)

Boyd Group Income Fund (BYD.UN) @ $91.62 Now $129.01 up 41%

CCL Industries (CCL.B) @ $56.98 Now $59.10 Up 5%

Constellation Software Debenture yields 7%. The stock was @ $687.00 Now $949.90 Up 38% on the common stock.

His top picks from a year ago have done extremely well over the course of the last 12 months. They would have performed even better for the TV had he been on a couple months ago. This is a much better gauge of his stock picking prowess as he's up 27.6% on these 3 picks alone. If you had owned the index through XIU you would be up 8% during the same time frame.

I know his whole portfolio is not up 27% but you get a good idea of the quality of the companies he likes.

Jason looks for and invests in companies with a ROE growth rate of at least 20%. 

As you can see JDV smashes the index when he picks growth stocks. The point is to hang in for the long term and don't sell a good business because it's down.

He is still looking to buy more Dollarama and so am I. They only missed earnings by a penny yet the market absolutely punished them and again sold off today. This is another buying opportunity if you have cash to invest.

I do not own CCL or BYD.UN. I have owned Boyd Group in the past and my selling of this company is perhaps one of my biggest investing regrets of the past few years. You can paste this link in your browser if you would like to watch the clip.

https://www.bnnbloomberg.ca/video/jason-del-vicario-s-past-picks~1498069

His Current Top Picks as of 24 Sep 2018

  1. Dollarama (DOL) $41.82
  2. Facebook (FB) $165.41
  3. Viemed Healthcare (VMD) $6.45
I own both DOL and FB. Dollarama bought at much higher prices but Jason says at this level it represents great value and I agree. I will be looking to purchase more for all accounts.

I love Facebook and wrote more about it here and why I bought it before Jason recommended it. I paid $161.

He likes a smallcap Canadian healthcare stock VMD. Ever since I got burned on ProMetic Life I hate this space in Canada. Who knows but I don't think I'll be acting on this recommendation.


My Final Thoughts

You have to remember when listening to professional money managers recommend stocks that their goals are entirely different than yours. Make sure you investigate and research each company before you take a position. That's the responsible thing to do.

JDV buys stocks but also sells them to lock in performance gains and to re-balance clients portfolios. You and I have the advantage of hanging on longer and establishing smaller positions in a lot of stocks. We can ride out the economic cycle longer than Jason can afford to. We can and should neglect our portfolio for our financial health, he can't because he has to answer to other investors.

I won't sell Facebook for probably 10 years unless the company stops making money and stops growing. This for me is a long term growth story. Even when it gets overvalued I will still ride the stock where as I believe Jason will lock in gains as any good money manager will.

One stock he mentioned and owns, that I will look into further is CCL Industries.

Stocks he talked about or mentioned in the course of the show that I own include; Spinmaster, Dollarama, Alimentation Couche Tard, Royal Bank, TD and Constellation Software.

One stock I was really surprised he owned was Kirkland Lake Gold. It is one of the gold stocks that makes money and doesn't destroy shareholder capital like most gold companies. It has great margins and a 20% ROE. Great pick but he didn't recommend it today or mention it but briefly. With inflation picking up all over the world, this stock may pick up more traction. Insiders have also been buying lots of stock since August. I will be watching KL for a possible entry point.

Listen to Jason any time you have a chance and follow up by doing your own research before making a decision on what to buy as an investment. Great show and very informative. I learned a lot and got some new ideas to help me grow money.


NEVER GAMBLE WITH MONEY YOU HAVE SAVED FOR RETIREMENT


Looking for Saving Ideas So You Can Invest? 




If you are looking at ways to save money this new book The Cashflow Cookbook can help you find some savings to then use to invest.


If you are having trouble getting your financial house in order and organized then you need to read Worry Free Money. 

If you are further looking for portfolio ideas then you might find my review of The 6-Pack Portfolio a way for you to get started on your investing journey. All of our retirement money is invested in this manner. We just hold more than 6 positions.


If you want to read more about the theory and methodology of some of Canada's professional investment/portfolio managers then you need to pick up a copy of the book 'Market Masters'. Robin Speziale conducts interviews with top money mangers in Canada using a set of pre-arranged questions. This will give you a real insight into how others invest money and how they think. A must read!

Do you invest in growth stocks and if so who do you listen to for ideas?

Friday, September 21, 2018

Money Management





Just a short post today to cover some of my thoughts on how to manage your money in your trading or gambling account.

Knowing when to buy and sell stocks is pivotal whether you are going to make or lose money in the stock market. To ensure you hang on to as much of your capital as possible it helps to have a set of rules to follow.

I visit a lot of stock discussion boards and it still amazes me how long people hang on to losing positions. If you want to buy and sell stocks to make money you have to absolutely know when to sell and take your profits or losses.

Preservation of your capital and as much as you can is vital to success trading stocks or market speculation.

I set aside $20K and invest in no more than 5 stocks. Spreading your money around in this way allows you to easily monitor how your picks are doing and to spread out your risk to a manageable number of positions.


Identifying Your Stock Picks

  • look for stocks trading at least 50% below their 52 week high
  • stay on the TSX or Dow big boards for your picks until you hone your skills
  • I screen for possible stocks at the end of every trading day
  • look for unusual spikes up in volume and price
  • momentum has come into play but don't buy until you confirm the uptrend
  • eliminate all stocks making 52 week highs
  • don't buy the next day first thing, wait to see if the stock continues higher
  • I never commit more than $4K to each stock

When to Sell

  • when you are down 7-8%
  • when you are up 50-100%
  • when price and volume accelerate to the downside
  • when the price of the stock moves up on lower than average volume
  • when volume starts drying up and momentum has stalled


CUT YOUR LOSSES EARLY 

It is the best way to keep more of your money and then redeploy it into a stock moving back up. Selling losers is a must to win at the trading game. How long to hang on and wait?

You will hold some positions days, weeks or even months to see significant upside. Don't listen to TV gurus for buying recommendations. Become a student of the market and watch and see what's moving up to buy and what your stocks are doing on a daily basis.

If you've made a mistake just sell and move on. Look at it this way. You only have to be right 1/5 times on your stock picks to come out ahead if you limit your losses. If that one stock gains 50% it will be more than enough to cover losses of 5% each on the other 4 picks.

Only when you've gained more experience should you handle more than 5 positions.

This is NOT day trading. I don't do that or know anything about it. This is more or less my wonky way of momentum investing.

Final Trading Thoughts


Only use money you have set aside as excess and you can afford to lose.
Always use your non-registered account or TFSA for making these trades. Nobody gets rich investing for income, this is what my retirement account is for. I generate income through dividend growth stocks and just hold them and collect the dividends.

This is investing for capital gains and is pure gambling. If you can't handle taking a loss don't try this.

You will be able to claim your trading fees and gains/losses on your income tax return. This is a beautiful thing here in Canada. Losses are not deductible for RRSPs.

Keep a trading log of your trading wins and losses.

Once a year treat yourself with the winnings by taking a well deserved vacation.

My Current Trading Account

ATD.B flat
ACB 37%
LNR 7%
OTEX 2.5%
QSR 5%
TOY 6%

As you can see I am one position over my limit of 5 stock picks. I am looking to lock in my ACB gains soon to get down to 5.

4/6 stocks are winners and this represents a dollar gain of $2125.

I am going to update all my trades at the end of the third quarter on all buys and sells I have made.

This is gambling, don't do it if you can't afford it. This is just what I do as another investment strategy to grow money.

Don't we all want to get to a position of 'FUCK YOU'? 


Wednesday, September 19, 2018

Buying Facebook Amazon and Berkshire Hathaway



When I have the money I buy stocks in quality companies. It's not more complicated than that.

Yesterday afternoon I established small toe tester positions in FB, AMZN and BRK.B

I really needed to buy some quality US companies that have a wide moat and that I believe I can hold for the next 10 years and will continue to grow.

We all know the trouble Facebook has gotten into lately with security of user information. Does that mean this company is on the down trend to oblivion?


Why Buy Facebook Now?


I believe it's a buying opportunity. To buy FB now you have to be a believer in the long term ability of this company to make money and explode in value. It dropped to a low of $149 on the Cambridge Analytica breach then rose to back over $209 and I just bought some at $160 after falling back down again.

Privacy concerns are laughable when it comes to FB. How about all the personal info we volunteer up for free on a daily basis? This is no more dangerous than any company out there we interact with. I like the Instagram acquisition and once FB figures out how to collect even more revenue once Instagram turns into a selling machine for a lot of stuff, well BOOM! This will happen and why this for me is a 5,10 and 20 year story.

Everybody uses FB. All ages. My 88 year old father uses Facebook and all the millenials in between use this social media platform. We use it to talk to family and friends, join like minded groups, start our own group, sell our shit on a group and post videos.

Anybody telling you this is going to die anytime soon is just plain nuts. Don't listen to them in my opinion. FB is the dominant way we use the internet to connect with the human race. FB messenger will only grow in it's use and get more common for chatting with each other. 

Every year revenues and earnings just continue to grow. P/E of 24 and ROE of over 24%. This company just continues to spit out cash of $11B a year. Amazing stats and after the drop in price FB is still flashing the BUY signal and by all fundamental aspects it's cheap. Technically the stock has broken down under it's 200 and 50 DMA, but to me it looks like it is getting ready to rocket higher. Nobody knows anything but I'll take my chances here. Technology just keeps advancing for me not to be here.


Why Amazon?

It's just the go to place for all our cheap shit and books. I don't buy a book anywhere without checking out the price on Amazon. It's where we get all our bargains, don't we? We just bought a coffeemaker for $12 delivered. Can't beat it. They have taken over our whole mindset and for that matter the world. They continue to grow bigger and more influential every day.

Yes it has a monster P/E ratio of 150 and needs to keep hitting earnings and revenue numbers in the short term for the street to keep buying that value number. Do all high priced stocks have to drop lower? Can they keep going higher? Nobody knows shit. They have been wrong for a very long time. I've read about lots of investors on discussion shorting AMZN since it got above $1000.00

They have continued to short it all the way up and I'm guessing will do so until they are dead ass broke.

They generate $11B a year in free cash flow. EPS growth of 1100% YOY. Revenue growth of 38% YOY. ROE of 21%.

In 1994 Amazon launched and Whole Foods was already a $220M company. What happened? Amazon eventually went on to buy Whole Foods. Wouldn't you think it would have been the other way around? That is the sheer raw purchasing power Amazon has in the marketplace. This is a huge company. HUGE! They will continue to eat companies gong forward. Innovation always wins so pay attention to what these monster companies are doing.

Prime plus and paid subscribers = huge revenue stream and growing. Will they buy a pot company? Will they find a way to penetrate the pharma industry? So many possibilities and opportunity for entrepreneurs and investors. I'm buying Amazon for the next 10 years. I am looking at it's macro impact on capitalism and NOT short term warnings from money managers warning of a global meltdown and getting out of high p/e stocks. I'm not betting against Bezos and what he can do.

Amazon gets close to you, the closest of any company to it's consumers. The closest to the shopper always wins. Don't you think? I for one am investing with Bezos so I bought a few shares and will buy more when I can. Think Alexa, Fire TV, Movie making, Kindle, are these going away or are they the future? It's just unbelievable what this company has done and continues to do. Their runaway is clear with nothing stopping them. The stack of products is deep!


Berkshire 'B' Shares

Why buy Berkshire? Warren Buffett enough said. I just wanted to invest in the greatest investor of our generation. It took awhile but I finally pulled the trigger. It does mimic the whole US market so I figured why not. I like the stable of companies he holds so it's just a small investment in his massive holding company. Another, at least 10 year hold.

P/E of 11, ROE 14% and revenue and earnings growth all rising year after year. Buffett knows how to invest and grow money. This is a sleep at night stock and most suitable for retirement accounts where I tucked it away.

In Sum

I ended up selling 55 units of ETF XAW which I am slowly winding down so I could make these 3 buys. I just want to be exposed to the US and Canadian market. The rest of the world (besides Trump) is too unstable for me so I'm slowly getting out. US companies will weather any storm and the US dollar is the currency everyone seems to run to.



 NEVER GAMBLE WITH MONEY YOU HAVE SAVED FOR RETIREMENT


Looking for Saving Ideas So You Can Invest? 


If you are looking at ways to save money this new book The Cashflow Cookbook can help you find some savings to then use to invest.

If you are having trouble getting your financial house in order and organized then you need to read Worry Free Money. 

If you are further looking for portfolio ideas then you might find my review of The 6-Pack Portfolio a way for you to get started on your investing journey. All of our retirement money is invested in this manner. We just hold more than 6 positions.


If you want to read more about the theory and methodology of some of Canada's professional investment/portfolio managers then you need to pick up a copy of the book 'Market Masters'. Robin Speziale conducts interviews with top money mangers in Canada using a set of pre-arranged questions. This will give you a real insight into how others invest money and how they think. A must read!

Do you own any of these 3 great American growth companies?

Tuesday, September 18, 2018

Coke and Aurora Playing Together



Just a short post about what went down or up on the markets today and the latest earth shattering news on Aurora Cannabis.

Aurora Cannabis popped almost 17% today on news it is in talks with Coke to supply a cannabis infused beverage. This was the move I was hoping for and just recently wrote about. This was not a surprise after Canopy Growth agreed to get in bed with Constellation Brands so they could gain a foothold in the weed market and diversify it's company offerings. 

The question now is who's next?

The news is lots of beverage companies are looking at forming strategic relationships with cannabis companies. I suspect we'll see more consolidation and mergers in what will be a multi-billion dollar industry of the future. 

The medical and recreational markets will have to grow into their market caps and prove to investors that they can make money.

How many search engines do we have besides Google, Yahoo and Bing? It took awhile to flush out the small guys but they soon did. Remember Blockbuster? Before they became the big guy they whacked all the small mom and pop shops so you basically had no choice but to walk to the strip mall and rent movies from Blockbuster. Now we have Netflix, streaming and cord cutting is the future of home entertainment.

The same thing will happen in the pot industry. Many companies will just not be around tomorrow. One other company making money is CannTrust Holdings (TRST). I will be watching this company closely as an investment in medicinal marijuana.

Another huge area of potential will be delivery systems and how about companies that supply packaging and the immense amount of hardware used to grow the plants. Those are another couple potential areas of investment.

My growth stock picks are now up over 3% with, 5/6 of the companies in my open account now in the green. Today was a good day for ACB and DOL also gained back just over 2% so that was a nice bounce back day for Canada's favourite Dollar Plus Store.


Important Investing Points

  • remember the wide moat philosophy of Buffett. ACB is starting to gain more of that moat with a partnership with Coke
  • think long term 10-20 years with cannabis. This industry is just getting started in spite of legal medical marijuana since 2003
  • look for big stable companies in this industry you believe have a chance to make profits well into the future
  • research the other companies that will support and make the delivery of cannabis to patients and consumers readily available
The US market was down on more trade friction with China. FAANG stocks all down with AMZN dropping $61. I am seriously looking at buying into AMZN, Facebook and BRK.B.

BAT stocks still dropping, the bottom is not in yet but who knows. Wait for that base to form. Alibaba is getting tempting for those of us who missed the AMZN rocketship. I doubt I go into any emerging market stocks, as I don't like the instability of those markets. I'd rather buy Tesla which is becoming a turnaround story pretty quick. The selling continues.

All the DOCKS stocks also had a bad day with CSU giving back all of my gains. I'm up only $5 on my position. I really didn't think it would see these levels again. It's in my retirement account for at least the next 10 years. I love the company.

 NEVER GAMBLE WITH MONEY YOU HAVE SAVED FOR RETIREMENT

Looking for Saving Ideas So You Can Invest? 


If you are looking at ways to save money this new book The Cashflow Cookbook can help you find some savings to then use to invest.

If you are having trouble getting your financial house in order and organized then you need to read Worry Free Money. 

If you are further looking for portfolio ideas then you might find my review of The 6-Pack Portfolio a way for you to get started on your investing journey. All of our retirement money is invested in this manner. We just hold more than 6 positions.

If you want to read more about the theory and methodology of some of Canada's professional investment/portfolio managers then you need to pick up a copy of the book 'Market Masters'. Robin Speziale conducts interviews with top money mangers in Canada using a set of pre-arranged questions. This will give you a real insight into how others invest money and how they think. A must read!

What do you think about the Coke and Aurora partnership?


Saturday, September 15, 2018

My Growth Stock Portfolio Update

Just a short post on how a lot of the growth stocks I've recently purchased have performed. I know short term performance means nothing in the long run but I keep all these stocks on a short leash.

I hold to my 7-8% loss rule to keep any potential losses small.


My Growth Stocks

ACB - 4.3%
ATD.B -0.89%
CSU - 0.73%
DOL - 12%
LNR - 4.8%
MTY - 3.7%
OTEX - 1%
QSR - 1.8%
TOY - 5.7%
TFII - 1%

All of these companies have been purchased in Aug/Sept. Just in the last 6 weeks so they are doing quite well. DOL has been hit hard after NOT meeting analysts expectations. Same store sales went down and the stock got punished by the market. I hold only 90 shares all in my RRSP. If I had more money I would buy more Dollarama. I consider it a quality company and a core holding. My average cost is $47.16, the stock closed today at $41.65. the stock has shed 15% in 2 trading days. 

My Thoughts On The Week

All the chatter and wailing on most discussion boards and social media platforms is about a stock market meltdown or recession. If you can't take the losses you have two choices. Sell everything and go to cash or ride it out when it happens.

I believe based on the strength in labour markets, low unemployment and strong earnings reports that we are not there yet. Oh sure the market will pull back no matter what you are holding. Bonds won't save you and neither will traditional diversification tactics. Stick with quality companies and hold. That's my plan because markets always recover and always rise more days than they fall.

The Week That Was

Another roller coaster ride that saw more big swings in the Pot stocks. My ACB was up as much as 6% Wednesday before swinging wildly to a loss by week's end. My position on LNR is starting to pullback as the market is now getting jittery again over NAFTA talks and more threats to trade with China. I've lost quite a few percent there. Spinmaster is roaring ahead and Restaurant Brands is really picking up some momentum. I'm 6/10 or 60% picking winners so far. That would make me a 'B' student.

Growth Stock Watchlist

I always like to keep a list of high quality growth companies in case I have enough cash to buy some. They include;

GIB-A, CFX, PLC, RBA, DSG, TC, SHOP, KXS, RCH, SIS, PBL and PHO.

In the US I like all the FAANG stocks plus BRK.B, GD and TSLA.

Summary

Canadians now owe $1.69 for every dollar they make. We are addicted to debt. Most Canadians have all their money tied up in a house. This is also known as the one asset strategy. No savings and no investments will lead to a bleak retirement. Diversify within companies and industries, buy what appreciates and lease or rent what depreciates. Collect assets and NOT debts. This is the currency of slaves.

 NEVER GAMBLE WITH MONEY YOU HAVE SAVED FOR RETIREMENT


Looking for Saving Ideas So You Can Invest? 


If you are looking at ways to save money this new book The Cashflow Cookbook can help you find some savings to then use to invest.

If you are having trouble getting your financial house in order and organized then you need to read Worry Free Money. 

If you are further looking for portfolio ideas then you might find my review of The 6-Pack Portfolio a way for you to get started on your investing journey. All of our retirement money is invested in this manner. We just hold more than 6 positions.

If you want to read more about the theory and methodology of some of Canada's professional investment/portfolio managers then you need to pick up a copy of the book 'Market Masters'. Robin Speziale conducts interviews with top money mangers in Canada using a set of pre-arranged questions. This will give you a real insight into how others invest money and how they think. A must read!

What growth stocks do you own and what would you buy?


Friday, September 14, 2018

Betting On TFI International


Just a short post today on a company I recently purchased.

I like to invest in companies and not buy the stock market. One company I have been watching for months has been TFI International (TFII). I bought 100 shares @$47.18 yesterday. It is basically a trucking company, but a big trucking company operating here in Canada the US and Mexico.

They help move things like waste, goods, building materials, auto parts, energy, lumber products. It also services the metals and mining sector, food and beverage, chemical and explosives sector and marine equipment.

They own 391 truck terminals, 7,058 power tractors and 24,617 trailers. That's a lot of trucks that require a lot of drivers that are in high demand and short supply. Competition is fierce and TFII will have to offer sweet pay and benefit packages to attract the best. This will cut into their bottom line but we're way off that happening anytime soon.

I own CNR and CP in the industrial space but I really wanted to add an essential company that the economy just can't live without. With the lack of pipeline capacity we are seeing crude by rail take up all the space on the tracks. Trucks will take up the slack caused by this effect. These goods have no other way to get to market other than by highway. This is my main case for buying this company. I view it as an vital service to get all of our goods to market. Let's look at some numbers;


Market Cap: $4B
Beta: 1.25
ROE: 25%
Forward P/E: 13.4
EPS Growth: 22%%
Revenue: $4.8B, per share =54.0
Debt: $1.6B
Forward Dividend: 1.76%

Payout Ratio 21.6%
Price Paid: $47.18
52 week high: $48.50


Why I Like It

High revenue stream, great return on equity, pays a dividend and has a low payout ratio. Earnings were down slightly but year over year they just keep spitting out a high level of free cash flow of $144M. Net cash is up an astounding 88% from the previous year. David Baskin and Ryan Modesto also
recently recommended the stock as a buy. The company also has a high level of insider ownership and is buying back shares with it's free cash flow.


Is it Risky?

With a beta a little over 1 it is a little more volatile than the broader market but we buy quality companies and TFII is a money making machine. I would rather buy this company than a mutual fund or ETF. You own a piece of a North American leader in the transportation and logistics industry.

Summary

The stock is trading near it's all time highs. It's still cheaper than the overall market at just 13 times forward earnings. It makes money and has a small manageable debt load. As a transportation company we deal with trucks on the road everyday and don't they piss us off all the time. What a great way to calm your road rage knowing that you own a piece of the industry so you can relax behind the wheel. 

That's the sound of money passing you on the road. I have tucked this away in my wife's retirement account and will look to add it to all accounts on weakness. You could also look at this as a hedge to all the driving and gas you are burning up daily that only costs you money. Owning TFII will allow you to grow some of that money for your future. I'm betting on it.


I ONLY BUY STOCKS FOR OUR RETIREMENT ACCOUNTS AND NEVER SELL THEM. NEVER GAMBLE WITH MONEY YOU HAVE SAVED FOR RETIREMENT


Looking for Saving Ideas so You Can Invest? 


If you are looking at ways to save money this new book The Cashflow Cookbook can help you find some savings to then use to invest.

If you are having trouble getting your financial house in order and organized then you need to read Worry Free Money. 

If you are further looking for portfolio ideas then you might find my review of The 6-Pack Portfolio a way for you to get started on your investing journey. All of our retirement money is invested in this manner. We just hold more than 6 positions.

If you want to read more about the theory and methodology of some of Canada's professional investment/portfolio managers then you need to pick up a copy of the book 'Market Masters'. Robin Speziale conducts interviews with top money mangers in Canada using a set of pre-arranged questions. This will give you a real insight into how others invest money and how they think. A must read!

Would you buy TFII or do you own it?


Thursday, September 13, 2018

Is Linamar Good Value?

This is just a short post on why I believe Linamar is a great value play right now and why I bought it.

I bought the stock last week on a positive NAFTA solution as the stock continued to drift lower on bad news. This is another stock on my gambling list that I'm just taking a short term punt on hoping to make 20-25% on my $4K bet.

I bought 70 shares @$57.71 on 29 August. Today the stock finally turned into the green on a 5.7% pop on news from Trump that Canada & the US are really close to a deal. This is going to happen and I'm expecting LNR to get close to it's old high of over $80.

I love the long runway here to make money based on it's 52 week trading range. Let's look some numbers;

Beta: 0.73
ROE: 18.5%
Forward P/E: 6.4
EPS Growth: 22%%
Revenue: $7BM, per share =110
Debt: $2.5B
Forward Dividend: 0.87%

Payout Ratio 5%
Price Paid: $57.71
52 week high: $80.58

CEO Linda Hasenfratz bought 17,000 shares on the same day I did. This is a great sign and something to believe in when the company has this much insider activity from the top. That was a $1M bet on her part. The stock gained $3.19 yesterday.

If you like to buy value stocks then LNR fits your bill. It has been hammered with the recent steel and aluminum tariffs and market sentiment has turned negative since the trade spat began.

We have the US Congress on our side as they need to be consulted before any trade pact goes ahead without Canada.

Do you think the CEO bought a million dollars worth of shares because she believes the stock is going down?

It was only in May that the stock traded @$80. It's now going sideways in the $50's.

There is a lot of value here and I'm betting that the CEO can unlock all the potential that this consumer cyclical stock has to offer. Worth a punt to me as I am betting all the risk is to the upside.

"You don't make money on the buying or selling of a stock, the money is made in the holding" - Charlie Munger


I NEVER SPECULATE WITH MY RETIREMENT MONEY. THIS IS ALL INVESTED IN DG STOCKS FOR INCOME

Looking for Saving Ideas so You Can Invest? 


If you are looking at ways to save money this new book The Cashflow Cookbook can help you find some savings to then use to invest.

If you are having trouble getting your financial house in order and organized then you need to read Worry Free Money. 

If you are further looking for portfolio ideas then you might find my review of The 6-Pack Portfolio a way for you to get started on your investing journey. All of our retirement money is invested in this manner. We just hold more than 6 positions.

If you want to read more about the theory and methodology of some of Canada's professional investment/portfolio managers then you need to pick up a copy of the book 'Market Masters'. Robin Speziale conducts interviews with top money mangers in Canada using a set of pre-arranged questions. This will give you a real insight into how others invest money and how they think. A must read!

Would you buy Linamar or do you own it?


Wednesday, September 12, 2018

Why I Just Bought Aurora Cannabis


On 4 September I bought 450 shares of Aurora Cannabis (ACB) @$8.91

It has taken a week to recover my purchase price as the stock starting to back up on me. Since mid August the stock has gained 350% but I have only gained a scant 1.7% or $71. It's only been a week but as you can see, this stock and sector are not for the faint of heart.

I'm just using ACB as a speculation to make some short term money. The main reason I chose ACB instead of all the others is that it has traded as high as $15.20 in the last 52 week period. All the others seem to be making new highs every day so who knows where they will be trading at.

I'm speculating here that ACB gets back to it's old high giving us an almost double from here. At least I know how high it could go because it's been there. The others are just very hard to gauge.

As I've sated before and it's important to remember in this weed stock euphoria. Many of these stocks have no earnings and are highly leveraged. ACB is one of them. They have acquired smaller producers and in doing so have taken on a lot of debt. I don't like that but right now the market is giving them a lift. As soon as momentum and volume start taking this stock down, I will sell and take profits. We will see how the market revises it's forecasts for ACB as we reach legalization on 17 October. Let's look at the current numbers;


Beta: -0.91
ROE: -2%
Forward P/E: 151.5
EPS Growth: -0.3%
Revenue: $41.9M, per share =0.10
Debt: $209M
Forward Dividend: 0.61%

Payout Ratio 10%
Price Paid: $8.91
52 week high: $15.20

Earnings are not yet keeping up with revenues. There is also a tremendous amount of paper out there as the company has had to dilute the shares buying companies and borrowing money. Almost a billion shares outstanding with Aurora. Another huge negative for a company not making any money. This is nothing but an outright gamble for me on the future of ACB.

If you buy this company like I did, keep an eye on it as a trading stock. This is not a long term hold for me. If it keeps going up on institutional interest until legalization I will keep holding. This is not investing, just a pure speculation as my blog name signifies. Let's hope the gamble goes my way and it starts to rise to the heights of Aphria and Canopy Growth.

I think it is worth the punt.


What I Like

  • production up every quarter, currently over 233,000 pounds per
  • acquired the largest medical marijuana producer in Europe last year
  • intends to add oils to it's portfolio
  • acquisition of MedReleaf improving earnings
  • reports earnings for 3rd quarter on 25 September
  • if beer company's keep looking, then ACB is a prime candidate for buyout
  • the stock popped 10% yesterday on almost 30 million shares traded
With the introduction of Constellation Brands taking a 50% position in Canopy Growth you can bet other alcohol manufacturers will come looking for opportunity in this space. If and when that happens you can bet on some companies being taken out at huge premiums from here.

This is why they're called speculations. Only buy here with money you can afford to lose.

I NEVER SPECULATE WITH MY RETIREMENT MONEY. THIS IS ALL INVESTED IN DG STOCKS FOR INCOME

Looking for Saving Ideas so You Can Invest? 


If you are looking at ways to save money this new book The Cashflow Cookbook can help you find some savings to then use to invest.

If you are having trouble getting your financial house in order and organized then you need to read Worry Free Money. 

If you are further looking for portfolio ideas then you might find my review of The 6-Pack Portfolio a way for you to get started on your investing journey. All of our retirement money is invested in this manner. We just hold more than 6 positions.


If you want to read more about the theory and methodology of some of Canada's professional investment/portfolio managers then you need to pick up a copy of the book 'Market Masters'. Robin Speziale conducts interviews with top money mangers in Canada using a set of pre-arranged questions. This will give you a real insight into how others invest money and how they think. A must read!

Would you buy Aurora Cannabis or do you own it?

Tuesday, September 11, 2018

Is Couche Tard a Buy Right Now?



Just another promising Monday market start that soon fizzled out. Futures were up significantly in the morning but the Dow and TSX managed to puke it all up by day's end.

Of course this is only bad news if you index your portfolio. Fortunately I don't. I would further suggest as Buffett does to buy quality companies, hold for the long term and ignore the stock market.

I bought Couche Tard (ATD.B) (speaking of quality) last week for the second time in my trading history and is one of those stocks I never should have sold. It is a high quality Canadian growth story and a major player in the convenience store/gas station space.

Just go hang around the outside of one on a Saturday or Sunday and check out the foot traffic and people pumping gas. The Globe and Mail recently published a story on how it should be a buy on most growth oriented investors watchlist. I have purchased it for my Gambling Portfolio. Here are some of the numbers;


Beta: 0.61
ROE: 24%
Forward P/E: 16.2
EPS Growth: 25%, $66.22 per share
Revenue: $56.3B, per share =99.70
Debt: $8.6Bl
Forward Dividend: 0.61%

Payout Ratio 10%
Price Paid: $65.85
52 week high: $67.96

Couche Tard is a growth by acquisition story. That's how they get big and make money eventually. Outside of Quebec they are known and branded as 'Circle K'.

In their latest earnings report they made $3.5B selling merchandise and gas. That was an increase of 27.6% over the previous year. They use this to pay debt and hunt for more bargains. 


Why I Like It

It operates 12,740 convenience stores that generates $1B a yer in free cash flow. It then allocates that cash by buying more companies and re-branding them. They are diversified around the Globe in North America, Scandinavia, the Baltics, Russia, China, Ireland, Saudi Arabia, Costa Rica, UAE, Mexico, Malaysia and Viet Nam. 

Is It Risky?

Has traded in a range of $52-$68 during the past 52 weeks so there are times when it has experienced a significant drop. With a beta of below 1 it is a medium risk story. Stock has traded mostly sideways for the past 3 years and analysts are forecasting a breakout over $68 in the next 6-12 months. We'll see, so I'm holding.

In Sum

This is a low yield high growth stock. I plan on holding through the next earnings quarter and see if the company can breakout to the upside. I also do believe this stock is highly suitable in your retirement account to just set it and forget it.

If you have smokers in your family they are always going to the store. Our local Couche Tard gas station offers the cheapest gas in the area so lines are long and people usually are tempted to buy something else while at the counter waiting.

This company has already provided investors with above average returns and to me still looks cheap with a low p/e of 16 and predicted to grow earnings by 15% for the next 3 years. Sounds like a good place for an investor to park some money.


I NEVER USE MY RETIREMENT MONEY TO TRADE IN AND OUT OF STOCKS. I VERY SELDOM SELL THEM UNLESS MANAGEMENT GETS STUPID!

Looking for Saving Ideas so You Can Invest? 


If you are looking at ways to save money this new book The Cashflow Cookbook can help you find some savings to then use to invest.

If you are having trouble getting your financial house in order and organized then you need to read Worry Free Money. 

If you are further looking for portfolio ideas then you might find my review of The 6-Pack Portfolio a way for you to get started on your investing journey. All of our retirement money is invested in this manner. We just hold more than 6 positions.

If you want to read more about the theory and methodology of some of Canada's professional investment/portfolio managers then you need to pick up a copy of the book 'Market Masters'. Robin Speziale conducts interviews with these top money mangers using a set of pre-arranged questions. This will give you a real insight into how others invest money and how they think. A must read!

Would you buy Couche Tard or do you own it?

Saturday, September 8, 2018

Stock Trades and Portfolio Stragglers 7 September

Just a short post on how the day went on the markets and how some of the trades I made during the week panned out.

I sold my entire 130 shares in CGX yesterday and the stock continued to sell off for the remainder of the day and fell a further 2.7% today. I saved myself $130 by selling when I did. Sold @$32.45, closed today @$31.46.

Trevali Mining was another good dump decision. It has fallen a further 4% since I sold it saving an additional $150 on the trade.

Sometimes you just get a feel that something isn't right. I have no idea what it is with CGX but it seems to have reversed trend. It could be that it went ex-dividend and this is just a short term blip. I just didn't want to further erode my small $176 gain.


Gambling Portfolio

ACB 9%, ATD.B 0.3%, LNR 4.6%, OTEX 0.8%, QSR 0.2%, TOY 0.35%

The portfolio is off in nominal terms by $569.00

I have $24,010.19 invested here including fees. I limit the size of my positions to 4K so I don't get burned too bad if things go sideways and as stated I have a 7-8% loss rule that I'm pretty strict with. I am holding ACB even though it's down 9% because during the day it recovered somewhat so it is more volatile. Of the $569 PF loss, ACB represents $365 of it. So, it's a big chunk. I believe it will recover and compared to the other cannabis stocks, it is cheap and on sale  right now.

My Other Growth Stock Plays

CSU 1.6%, DOL 1%, MTY 2.5%.

These are early days for these trades that's why the percentage gains/losses are so low. MTY had a great day today, it set a new 52 week high. I thought it was maybe a little too expensive when I bought it but the market seems to have loved it's new Sweet Frog acquisition. All these companies are safely tucked away in RRSPs and I will only add to them and hold for at least the next 10 years.

Portfolio Stragglers

Even in these retirement accounts some of these decisions leave you scratching your head. As an example I thought Shaw (SJR.B) would be a great add to the RRSP. It's down 8% already in just a couple months. Should I sell it. Will it come back? I only hold 200 shares and it pays a monthly dividend. If this keeps up it will take a year for the dividends to recoup the capital loss.

Enbridge 

just sucks ballz. It really does. I'm down 11% in one account and 3% in another. What you might consider value doesn't always represent that way. I thought it was a great buy again @$46.36 when I added it to my wife's portfolio. It has been a loser everytime I buy it. It along with TRP will continue to struggle until we get this pipeline controversy settled. Only in Canada, SHEESH!

BCE 

is down 6%. Another perennial TSX dog company. It's no wonder with all the negative talk and the whole country complaining of high prices, cord cutting and data charges. Should I even be invested in the telecom sector? Well I am for now in both RRSPs as it pays a 5.5% dividend. It's just an income stock now and perfect for income/retirement investors. I would love to see some capital growth someday like Rogers has been showing. I sold my Rogers last year thinking Bell was the better company.



I ONLY USE MY RETIREMENT MONEY TO BUY STOCKS. I VERY SELDOM SELL THEM UNLESS MANAGEMENT GETS STUPID!

Looking for Saving Ideas so You Can Invest? 


If you are looking at ways to save money this new book The Cashflow Cookbook can help you find some savings to then use to invest.

If you are having trouble getting your financial house in order and organized then you need to read Worry Free Money. 

If you are further looking for portfolio ideas then you might find my review of The 6-Pack Portfolio a way for you to get started on your investing journey. All of our retirement money is invested in this manner. We just hold more than 6 positions.



If you want to read more about the theory and methodology of some of Canada's professional investment/portfolio managers then you need to pick up a copy of the book 'Market Masters'. Robin Speziale conducts interviews with these top money mangers using a set of pre-arranged questions. This will give you a real insight into how others invest money and how they think. A must read!

What companies did you buy or sell today, if any?

Have a great weekend!

An October to Forget

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