There is always something to buy in the stock market. On Tuesday, I put out a list of the stocks that I covered and showed what stock might be a good deal based on dividend yield. Now I am trying to categorize what sorts of stocks may be a good deal based on dividend yield.
The advantages to using dividend yield to judge how cheap or expensive a stock is, is that you are not using estimates or old data (like last reported quarter's data). You are using today's stock price and today's dividend yield.
For other testing, like using P/E Ratios and Price/Graham Price Ratios, you use EPS estimates or from the last reported financial quarter. When using P/S Ratios, P/CF Ratios or P/BV Ratios you are using data from the last reported financial quarter.
This system does not work well for old Income Trust companies. These companies had quite high Dividend Yields which will probably never be seen again. So I started a column called VT (for Valid Test) and this applies to checking stock price using dividend yield. If not a valid test I use N to show this. For these stocks, you might be better comparing the current dividend yield to the 5 year median dividend yield.
However, no system is perfect. But if you are interested in buying a stock a list of stocks cheap or reasonable using dividend yield data might be a good place to start.
Categorizing stocks is not as simple as it might seem. Every site you go to has categorized stocks a bit differently. I try to keep this as simple as possible. See Something to Buy November 2017 Spreadsheet to see what stocks are showing whether a stock is relatively cheap based on historical high dividend yields (P/Hi), historical average dividend yields (P/Ave), historical median dividend yields (P/Med) or on 5 year median dividend yields (P/5Yr). As in other spreadsheets, you can highlight a line or a number of lines for better viewing.
In the following notes I am only going to list stocks showing as cheap using the historical high dividend yields (P/Hi) and historical median dividend yields (P/Med).
I follow 22 stocks in the Consumer Discretionary category. One of these stocks is showing as cheap by the historically high dividend yield and that is Newfoundland Capital Corp (TSX-NCC.A). Eight (or 36%) are showing cheap by historical median dividend yield. They are DHX Media Ltd. (TSX-DHX.A, OTC-DHXMF), Dorel Industries (TSX-DII.B), High Liner Foods (TSX-HLF, OTC-HLNFF), Leon's Furniture (TSX-LNF); Magna International Inc. (TSX-MG), Molson Coors Canada (TSX-TPX.B, NYSE-TAP), Newfoundland Capital Corp (TSX-NCC.A) and Reitmans (Canada) Ltd. (TSX-RET.A). Goeasy Ltd. (TSX-GSY, OTC-EHMEF) is being removed from cheap by historically median dividend yield and Molson Coors Canada (TSX-TPX.B, NYSE-TAP) has been added to this list.
I follow 12 Consumer Staples stocks. No companies are showing as cheap by the historically high dividend yield. Five stocks (or 42%) are showing cheap by historical median dividend yield. These are Alimentation Couche-Tard (TSX-ATD.B, OTC-ANCUF), Empire Company Ltd (TSX-EMP.A, OTC-EMLAF), Jean Coutu Group Inc. (TSX-PJC.A, OTC-JCOUF), Loblaw Companies (TSX-L, OTC-LBLCF) and Metro Inc. (TSX-MRU, OTC-MTRAF). There is no change from last month.
I only follow two Health Care stocks and both are US stocks. None of these stocks are showing as cheap by the historically high dividend yield. They are both cheap by the historical median dividend yield. The stocks are Johnson and Johnson (NYSE-JNJ) and Medtronic Inc. (NYSE-MDT). This is the same as for last month.
I follow 11 Real Estate stocks. None of these stocks are showing as cheap by the historically high dividend yield. Three stocks (or 27%) are showing cheap by historical median dividend yield. They are Artis REIT (TSX-AX.UN, OTC- ARESF); Granite Real Estate (TSX-GRT.UN, NYSE-GRP.U) and Melcor Developments Inc. (TSX-MRD, OTC-MODVF). Brookfield Asset Management (TSX-BAM.A, NYSE-BAM) has been reclassified as a Financial Service stock. This reduces the Real Estate stocks I follow from 12 to 11.
I follow 8 Bank stocks. None are showing as cheap by the historically high dividend yield. One stock (or 12.5%) is showing cheap by the historical median dividend yield. This stocks is CIBC (TSX-CM, NYSE-CM). Bank of Nova Scotia (TSX-BNS, NYSE-BNS) has been deleted from this list as cheap by historical median dividend yield.
I follow 13 Financial Service stocks. None are showing as cheap by the historically high dividend yield. Eight (or 62%) stocks are showing cheap by the historical median dividend yield. These stocks are Accord Financial Corp (TSX-ACD, OTC-ACCFF), AGF Management Ltd (TSX-AGF.B), Alaris Royalty Corp (TSX-AD, OTC-ALARF), CI Financial (TSX-CIX), Equitable Group Inc. (TSX-EQB, OTC-EQGPF), Gluskin Sheff + Associates Inc. (TSX-GS), IGM Financial (TSX-IGM) and Power Corp (TSX-POW). This is the same as last month. Brookfield Asset Management (TSX-BAM.A, NYSE-BAM) has been reclassified as a Financial Service stock from a Real Estate stock so I now have 13 stocks in this category rather than 12.
I follow 5 Insurance stocks. None are showing as cheap by the historically high dividend yield. Three stocks (or 60%) are showing cheap by historical median dividend yield. These stocks are Great-West Lifeco Inc. (TSX-GWO); Manulife Financial Corp (TSX-MFC) and Power Financial Corp (TSX-PWF). There is no change from last month.
I follow 32 Industrial stocks. Because I have so many and Industrial is not very descriptive, I have divided my Industrial stocks into 4 separate categories under Industrial. They are Construction, Industrial, Manufacturing and (Business) Services. I am now following Logistec Corp (TSX-LGT.B, OTC-LTKBF) an Industrial Services stock.
I have 6 Construction stocks. None are cheap by the historically high dividend yield. Two stocks or 33% are showing as cheap by historical median dividend yield. They are SNC-Lavalin (TSX-SNC, OTC-SNCAF) and Stantec Inc. (TSX-STN, NYSE-STN). There is no change from last month.
I have 3 stocks I have left with the sub-index of Industrial. None are cheap by the historically high dividend yield. Two stocks or 67% are showing as cheap by historical median dividend yield. They are Finning International Inc. (TSX-FTT, OTC-FINGF), and Russel Metals (TSX-RUS, OTC-RUSMF). There is no change from last month.
I have 7 Manufacturing stocks. None are showing as cheap by the historically high dividend yield. Four stocks or 57% are showing as cheap by historical median dividend yield. They are Exco Technologies Ltd. (TSX-XTC, OTC-EXCOF), Hammond Power Solutions Inc. (TSX-HPS.A, OTC-HMDPF), Intertape Polymer Group Inc. (TSX-ITP, OTC-ITPOF) and PFB Corp (TSX-PFB, OTC-PFBOF). There is no change from last month.
I have 16 Services stocks. None are showing as cheap by the historically high dividend yield. Four stocks or 25% are showing as cheap by historical median dividend yield. These stocks are Canadian National Railway (TSX-CNR, NYSE-CNI), Pason Systems Inc. (TSX-PSI, OTC-PSYTF), Transcontinental Inc. (TSX-TCL.A, OTC-TCLAF) and Wajax Corp (TSX-WJX, OTC-WJXFF). I am now following Logistec Corp (TSX-LGT.B, OTC-LTKBF) an Industrial Services stock so I have 16 stocks in this category rather than 15.
I follow 8 Material stocks. None are showing as cheap by the historically high dividend yield. One stock or 14% is showing as cheap by historical median dividend yield and that stock is Methanex Corp (TSX-MX, NASDAQ-MEOH). This is the same as for last month.
I follow 10 Energy stocks. Ensign Energy Services (TSX-ESI, OTC-ESVIF) is showing as cheap by the historical high dividend yield. There are four stocks (or 40%) showing cheap by historical median dividend yield. They are Canadian Natural Resources (TSX-CNQ, NYSE-CNQ), Ensign Energy Services (TSX-ESI, OTC-ESVIF); Mullen Group (TSX-MTL, OTC-MLLGF) and Suncor Energy (TSX-SU, NYSE-SU). Ensign Energy Services (TSX-ESI, OTC-ESVIF) is again showing as cheap by the historical high dividend yield.
I follow 8 Tech stocks. None are showing as cheap by historical high dividend yield. Five stocks (or 63%) are showing cheap by historical median dividend yield. They are Absolute Software Corporation (TSX-ABT, OTC-ALSWF) Computer Modelling Group Ltd. (TSX-CMG, OTC-CMDXF), Evertz Technologies (TSX-ET, OTC-EVTZF), Maxar Technologies Ltd (TSX-MAXR, NYSE-MAXR), and Sylogist Ltd (TSXV-SYZ, OTC-SYZLF). MacDonald Dettwiler & Assoc. (TSX-MDA, OTC-MDDWF) has changed its name and symbols to Maxar Technologies Ltd (TSX-MAXR, NYSE-MAXR).
I follow 7 of the Infrastructure type utility companies. None are showing as cheap by historical high dividend yield. Three stocks (or 43%) are showing cheap by historical median dividend yield. They are AltaGas Ltd (TSX-ALA, OTC-ATGFF), Enbridge Inc. (TSX-ENB, NYSE-ENB) and Enbridge Income Fund Holdings Inc. (TSX-ENF, OTC-EBGUF). Veresen Inc. (TSX-VSN, OTC-FCGYF) has been bought by Pembina Pipelines Corp (TSX-PPL, NYSE-PBA) so I am following one fewer stocks in this category.
I follow 12 of the Power type utility companies. None are showing as cheap by the historically high dividend yield. Four stock (or 33%) are showing cheap by historical median dividend yield. Those stocks are Algonquin Power & Utilities Corp (TSX-AQN, NYSE-AQN), ATCO Ltd (TSX-ACO.X, OTC-ACLLF), Canadian Utilities Ltd (TSX-CU, OTC-CDUAF) and Emera Inc. (TSX-EMA, OTC-EMRAF). There is no change from last month.
I follow 4 of the Telecom Service type utility companies. No stock is showing cheap by the historical high dividend yield. Four stocks (or 100%) are showing cheap by historical median dividend yield. These stocks are BCE (TSX-BCE, NYSE-BCE), Quarterhaill Inc. (TSX-QTRH, NASDAQ-QTRH), Shaw Communications Inc. (TSX-SJR.B, NYSE-SJR) and Telus Corp (TSX-T, NYSE-TU). There is no change from last month.
On my other blog I wrote yesterday about CCL Industries Inc. (TSX-CCL.B, OTC-CCDBF)... learn more. Next, I will write about Encana Corp. (TSX-ECA, NYSE-ECA)... learn more on Friday, November 10, 2017 around 5 pm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk . The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.
Thursday, November 9, 2017
Tuesday, November 7, 2017
Dividend Stocks November 2017
First I want to point out that not all of the stocks I follow are great investments. I follow a diverse selection of stocks. There are some that I would never invest in personally. I follow a number of resource stocks even though I personally have little invested in this area. I follow what I find interesting and with resource stocks, I think it is important for Canadians to know what is happening in the resource area. On the other hand I do follow of good number of great dividend growth stocks.
The theory is that you should use the dividend yield to see if a dividend stock is selling at a stock price that is relatively cheap. A stock price is considered cheap if it is selling at a dividend yield higher than the historical high yield or higher than the historical average yield or historical median yield. See my spreadsheet at dividend growth stocks that I just updated for November 2017.
On this list,
AltaGas Ltd (TSX-ALA, OTC-ATGFF)
Emera Inc. (TSX-EMA, OTC-EMRAF)
Fortis Inc. (TSX-FTS, OTC-FRTSF)
Pembina Pipelines Corp (TSX-PPL, NYSE-PBA)
Waste Connections Inc. (TSX-WCN, NYSE-WCN)
In October 2017 MacDonald, Dettwiler & Associates (TSX-MDA, OTC-MDDWF) became Maxar Technologies Ltd (TSX-MAXR NYSE-MAXR). MDA took over DigitalGlobe Inc. MDA and DigitalGlobe combine to create Maxar Technologies, a leader in space technology.
I had Brookfield Asset Management (TSX-BAM.A, NYSE-BAM) listed as a real estate company. However, TSX and Globe and Mail list it as a Financial under Financial Services. I have changed this classification of this stock accordingly.
Also, of the stocks that I follow, 0 stocks decreased or suspended their dividends.
Most of my stocks started out as Dividend Payers. Currently 13 stocks are not paying any dividends and this would be some 10.3% of the stocks that I follow. Three of these stocks never had dividends, so 8.39% of the stocks I follow have suspended their dividends. The three stocks that never paid dividends are Ballard Power Systems Inc. (TSX-BLD, NASDAQ-BLDP0, Blackberry Ltd. (TSX-BB, NASDAQ-BBRY) and Trigon Metals Inc. (TSX-TM, OTC-PNTZF).
I am showing whether a stock is relatively cheap based on historical high dividend yields (P/Hi), historical average dividend yields (P/Ave), historical median dividend yields (P/Med) or on 5 year median dividend yields (P/5Yr). See these fields on the right side of the file. You can highlight a particular stock using your cursor to highlight the appropriate line.
There are always some stocks to buy because they are priced reasonably. There are always stocks to currently avoid because they are overpriced. Looking at dividend growth stocks that are selling at stock prices that give them a dividend yield above the historical median dividend yield are probably the best bet.
The stocks that are selling at prices that give them a dividend yield above the historical high yield could be good stocks to buy. However, these stocks may be selling so cheap because of current troubles, especially financial troubles and should be treated with caution. Do not forget that I have all the stocks I follow on this spreadsheet and some are much better investments than others.
You should always investigate a stock before you buy. Sometimes different stocks in certain sectors are just out of favour or the stock market is just in one of its declines. However, a stock may be relatively cheap because it has problems. That is why you should always investigate a stock before buying.
Looking at stock this way is equivalent to a stock filter. A main problem I know of is for the old income trusts. These companies have generally lowered their dividend yields forever and they will probably never get back to the old dividend yield highs they made as an income trust company. For these stocks, you might be better comparing the current dividend yield to the 5 year median dividend yield. I also started a column called VT (for Valid Test) and this applies to checking stock price using dividend yield. If not a valid test I use N to show this.
Also, on some stocks I have a lot more information years in my spreadsheets than for other stocks. So, finding a stock on the list as "cheap" is only the first step in finding a stock to buy. This is the same with any other sort of stock filters that you can use.
The last thing to remember is that I have entering figures into a spreadsheet. I could put them in incorrectly, I can transpose figures and I can misread figures. This is another great reason why you should check a stock out before investing. As this is just a filter, it works better on some stocks than on others.
See my entry on my methodology in establishing the historical dividend yield highs and lows for the stocks that I cover. I have an entry on my introduction to Dividend Growth. You might want to look at my original entry on Dividend Growth Stocks. I have also written about why I like Dividend Growth companies.
On my other blog I wrote yesterday about Brookfield Asset Management Inc. (TSX-BAM.A, NYSE-BAM)... learn more. Next, I will write about CCL Industries Inc. (TSX-CCL.B, OTC-CCDBF)... learn more on Wednesday, November 8, 2017 around 5 pm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits. I am on Instagram with #walktoronto.
The theory is that you should use the dividend yield to see if a dividend stock is selling at a stock price that is relatively cheap. A stock price is considered cheap if it is selling at a dividend yield higher than the historical high yield or higher than the historical average yield or historical median yield. See my spreadsheet at dividend growth stocks that I just updated for November 2017.
On this list,
- I have 2 stocks with a dividend yield higher than the historical high dividend yield,
- I have 32 stocks with a dividend yield higher than the historical average dividend yield
- I have 62 stocks with a dividend yield higher than the historical median dividend yield and
- 60 stocks with a dividend yield higher than the 5 year average dividend yield.
- I have 1 stocks with a dividend yield higher than the historical high dividend yield,
- I have 36 stocks with a dividend yield higher than the historical average dividend yield
- I have 63 stocks with a dividend yield higher than the historical median dividend yield and
- 59 stocks with a dividend yield higher than the 5 year average dividend yield.
- I had 9 stocks with a dividend yield higher than the historical high dividend yield,
- I had 45 stocks with a dividend yield higher than the historical average dividend yield and
- 39 stocks with a dividend yield higher than the 5 year average dividend yield.
AltaGas Ltd (TSX-ALA, OTC-ATGFF)
Emera Inc. (TSX-EMA, OTC-EMRAF)
Fortis Inc. (TSX-FTS, OTC-FRTSF)
Pembina Pipelines Corp (TSX-PPL, NYSE-PBA)
Waste Connections Inc. (TSX-WCN, NYSE-WCN)
In October 2017 MacDonald, Dettwiler & Associates (TSX-MDA, OTC-MDDWF) became Maxar Technologies Ltd (TSX-MAXR NYSE-MAXR). MDA took over DigitalGlobe Inc. MDA and DigitalGlobe combine to create Maxar Technologies, a leader in space technology.
I had Brookfield Asset Management (TSX-BAM.A, NYSE-BAM) listed as a real estate company. However, TSX and Globe and Mail list it as a Financial under Financial Services. I have changed this classification of this stock accordingly.
Also, of the stocks that I follow, 0 stocks decreased or suspended their dividends.
Most of my stocks started out as Dividend Payers. Currently 13 stocks are not paying any dividends and this would be some 10.3% of the stocks that I follow. Three of these stocks never had dividends, so 8.39% of the stocks I follow have suspended their dividends. The three stocks that never paid dividends are Ballard Power Systems Inc. (TSX-BLD, NASDAQ-BLDP0, Blackberry Ltd. (TSX-BB, NASDAQ-BBRY) and Trigon Metals Inc. (TSX-TM, OTC-PNTZF).
I am showing whether a stock is relatively cheap based on historical high dividend yields (P/Hi), historical average dividend yields (P/Ave), historical median dividend yields (P/Med) or on 5 year median dividend yields (P/5Yr). See these fields on the right side of the file. You can highlight a particular stock using your cursor to highlight the appropriate line.
There are always some stocks to buy because they are priced reasonably. There are always stocks to currently avoid because they are overpriced. Looking at dividend growth stocks that are selling at stock prices that give them a dividend yield above the historical median dividend yield are probably the best bet.
The stocks that are selling at prices that give them a dividend yield above the historical high yield could be good stocks to buy. However, these stocks may be selling so cheap because of current troubles, especially financial troubles and should be treated with caution. Do not forget that I have all the stocks I follow on this spreadsheet and some are much better investments than others.
You should always investigate a stock before you buy. Sometimes different stocks in certain sectors are just out of favour or the stock market is just in one of its declines. However, a stock may be relatively cheap because it has problems. That is why you should always investigate a stock before buying.
Looking at stock this way is equivalent to a stock filter. A main problem I know of is for the old income trusts. These companies have generally lowered their dividend yields forever and they will probably never get back to the old dividend yield highs they made as an income trust company. For these stocks, you might be better comparing the current dividend yield to the 5 year median dividend yield. I also started a column called VT (for Valid Test) and this applies to checking stock price using dividend yield. If not a valid test I use N to show this.
Also, on some stocks I have a lot more information years in my spreadsheets than for other stocks. So, finding a stock on the list as "cheap" is only the first step in finding a stock to buy. This is the same with any other sort of stock filters that you can use.
The last thing to remember is that I have entering figures into a spreadsheet. I could put them in incorrectly, I can transpose figures and I can misread figures. This is another great reason why you should check a stock out before investing. As this is just a filter, it works better on some stocks than on others.
See my entry on my methodology in establishing the historical dividend yield highs and lows for the stocks that I cover. I have an entry on my introduction to Dividend Growth. You might want to look at my original entry on Dividend Growth Stocks. I have also written about why I like Dividend Growth companies.
On my other blog I wrote yesterday about Brookfield Asset Management Inc. (TSX-BAM.A, NYSE-BAM)... learn more. Next, I will write about CCL Industries Inc. (TSX-CCL.B, OTC-CCDBF)... learn more on Wednesday, November 8, 2017 around 5 pm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits. I am on Instagram with #walktoronto.
Thursday, November 2, 2017
Money Show 2017 - Keith Richards
Keith Richards spoke in a Saturday morning session for Canadian Money Saver on "How to Profit from Fear and Greed". Keith Richards is the Portfolio Manager of Value Trend Wealth Management and World Source Securities Corp. Their site is www.valuetrend.ca. I went because Canadian Money Saver sessions have given good talks in past Money Shows. Their site is www.canadianmoneysaver.ca.
He wrote a book called Smartbounce: 3 Actions Steps to Portfolio Recovery. You can see this on Amazon.
He says you can profit from fear and greed by using the bear-o-meter. What is important is capital growth and preservation; keeping costs low; low portfolio turnover and monitoring your portfolio. There is always risk. Sometimes risk is higher than at other times. We do not know the future but we can measure risk.
The bear-o-meter has 9 facts. There are 2 trend indicators, 4 breadth indicators, 1 value factor and 3 sentiments and 1 scalability. There are 8 points on the bear-o-meter. 8 means less risk and 0 mean more risk.
The 2 trend facts are a downward trend that has lower highs and higher lows and an upward trend that has higher highs and higher lows. The 200 day moving average is more important than the 50 day moving average. So for the 50 day moving average there is plus or minus 1 point and for the 200 day moving average there is plus or minus 2 points.
Breadth participation means that certain stocks have more influence than others. An example is when Nortel was big in the market. You line up the advancing stocks against the declining stocks in an index. If AD is going down and index is up that is bad. If AD is going up and so is the index this is good. It does not necessarily mean the market is going to go down if AD is down and Index is up. If there is a divergence this could mean a problem.
Breadth momentum is percentage of stocks over 50 moving average and are stock trending up or trending down. The site stockcharts.com gives this indicator. You need a wall of worry. If too many stocks are down people are depressed too much and if too many stocks are up people are too happy.
Look at overbought or oversold stocks. The value factor is the P/E Ratio. Overbought or oversold is shown by P/E Ratio of less than 13 or greater than 25. So oversold is a stock with a P/E Ratio of less than 13. An overbought stock would be one with a P/E Ratio greater than 25. If the P/E Ratio is greater than 25 there is more risk.
Sentiment investing is contrarian investing with smart money and dumb money. Warren Buffett and the Teachers Fund are smarter than us. What are the smart people doing? What are the dumb people doing? The dumb people are us. Smart selling and dumb buying is a problem. You can get information on sentiment trading at sentimenttrading.com for $600 a year.
VIX Options is trading volatility. If the VIX options are too high then people are too pessimistic or too scared. If VIX options are too low then people are too complacent. They are not scared enough. When people are too complacent then there is more risk. VIX Option puts are bearish and VIX Option calls are bullish. If there are too many puts it is a sign people are too scared.
There are seasonal best 6 months and this has held from 1950 to 2016. The best 6 months is from October 28 to May 5 when investments will grow. The worst are from May 6 to October 27 when you will get investment losses.
If the bear-o-meter is at 3 it means that there is higher risk and we are on the cusp. Bearish numbers are 0, 1 and 2. Bullish are 6, 7 and 8. Neutral numbers are 3, 4 and 5. Currently we are in an OK environment with slightly higher risk. He uses fundamentals as well as Technicals when buying stocks.
The P/E Ratio is used far too much and is not a great indicator. Even with a P/E Ratio of 20 or 25, a stock could grow. There is no one indicator to say what is happening. For an example if a stock breaks below the 200 day moving average it can still change direction and move higher. It is a good indicator but by itself it does not necessarily tell you all you need to know.
On my other blog I wrote yesterday about Pason Systems Inc. (TSX-PSI, OTC-PSYTF)... learn more. Next, I will write about Next, I will write about Molson Coors Canada (TSX-TPX.B, NYSE-TAP)... learn more on Friday, November 3 around 5 pm
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.
He wrote a book called Smartbounce: 3 Actions Steps to Portfolio Recovery. You can see this on Amazon.
He says you can profit from fear and greed by using the bear-o-meter. What is important is capital growth and preservation; keeping costs low; low portfolio turnover and monitoring your portfolio. There is always risk. Sometimes risk is higher than at other times. We do not know the future but we can measure risk.
The bear-o-meter has 9 facts. There are 2 trend indicators, 4 breadth indicators, 1 value factor and 3 sentiments and 1 scalability. There are 8 points on the bear-o-meter. 8 means less risk and 0 mean more risk.
The 2 trend facts are a downward trend that has lower highs and higher lows and an upward trend that has higher highs and higher lows. The 200 day moving average is more important than the 50 day moving average. So for the 50 day moving average there is plus or minus 1 point and for the 200 day moving average there is plus or minus 2 points.
Breadth participation means that certain stocks have more influence than others. An example is when Nortel was big in the market. You line up the advancing stocks against the declining stocks in an index. If AD is going down and index is up that is bad. If AD is going up and so is the index this is good. It does not necessarily mean the market is going to go down if AD is down and Index is up. If there is a divergence this could mean a problem.
Breadth momentum is percentage of stocks over 50 moving average and are stock trending up or trending down. The site stockcharts.com gives this indicator. You need a wall of worry. If too many stocks are down people are depressed too much and if too many stocks are up people are too happy.
Look at overbought or oversold stocks. The value factor is the P/E Ratio. Overbought or oversold is shown by P/E Ratio of less than 13 or greater than 25. So oversold is a stock with a P/E Ratio of less than 13. An overbought stock would be one with a P/E Ratio greater than 25. If the P/E Ratio is greater than 25 there is more risk.
Sentiment investing is contrarian investing with smart money and dumb money. Warren Buffett and the Teachers Fund are smarter than us. What are the smart people doing? What are the dumb people doing? The dumb people are us. Smart selling and dumb buying is a problem. You can get information on sentiment trading at sentimenttrading.com for $600 a year.
VIX Options is trading volatility. If the VIX options are too high then people are too pessimistic or too scared. If VIX options are too low then people are too complacent. They are not scared enough. When people are too complacent then there is more risk. VIX Option puts are bearish and VIX Option calls are bullish. If there are too many puts it is a sign people are too scared.
There are seasonal best 6 months and this has held from 1950 to 2016. The best 6 months is from October 28 to May 5 when investments will grow. The worst are from May 6 to October 27 when you will get investment losses.
If the bear-o-meter is at 3 it means that there is higher risk and we are on the cusp. Bearish numbers are 0, 1 and 2. Bullish are 6, 7 and 8. Neutral numbers are 3, 4 and 5. Currently we are in an OK environment with slightly higher risk. He uses fundamentals as well as Technicals when buying stocks.
The P/E Ratio is used far too much and is not a great indicator. Even with a P/E Ratio of 20 or 25, a stock could grow. There is no one indicator to say what is happening. For an example if a stock breaks below the 200 day moving average it can still change direction and move higher. It is a good indicator but by itself it does not necessarily tell you all you need to know.
On my other blog I wrote yesterday about Pason Systems Inc. (TSX-PSI, OTC-PSYTF)... learn more. Next, I will write about Next, I will write about Molson Coors Canada (TSX-TPX.B, NYSE-TAP)... learn more on Friday, November 3 around 5 pm
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.
Tuesday, October 31, 2017
Money Show 2017 - Benj Gallander
Benj Gallander spoke in a Saturday morning session for Canadian Money Saver on "Simple Changes People Can Make to Improve Investment Returns". Benj Gallander is the President of Contra the Heard. Their site is www.contratheheard.com. I went because Canadian Money Saver sessions have given good talks in past Money Shows. Their site is www.canadianmoneysaver.ca.
The most interesting thing he said was they companies that have no debt have a hard time going bankrupt. He also mentioned that they have commentaries on their site.
Benj Gallander says he is a value guy. He says you can get better returns by turning off the noise. Cut the noise. Too many people react to it. Do not pay too much attention to your returns. Warren Buffett says that you should be greedy when others are fearful and fearful when others are greedy.
He says that rarely no more than 3 or 4 variables count in picking stocks. The rest is noise. No one cares more about your money than you do. Active investors do worse than passive investors. Active investors pay more fees.
Stay away from actively managed mutual funds. They have higher fees. Go to Mutual Funds that have lower fees. ETFs are even better.
Most people can manage their own money, even though a lot of people say differently. You should invest yourself and save. Benjamin Franklin said that the investment in knowledge is the best investment. Investing in your career is the best thing you can do.
John Temple said that the phrase "This time it is different" is the worst saying ever.
Bitcoin and crypto-currencies are really hot and the next big thing. You can make money on them, but you can also lose lots. What is big at this show is pot. When investing look to see who is in management. What have they done before? Some pot company managers previously ran mining companies that never went anywhere.
Improve you investment returns by saving money and buy things when they are cheap. You have to be patient. Try to control your emotions. Charles Munk (Warren Buffett's partner) said that you should identify stocks that you want to buy and then wait and get to know the stocks.
Walking is one of the best ways of thinking up new ideas. It is good to fine a few good things to do. However, realize that we cannot know everything.
Do not invest in IPO's. Most IPO's do not do well. However, sometimes with IPO's you can get lucky and make lots of money.
He likes companies that have been around at least 10 years. Diversification is good, but do not over do this. The rear view mirror is great for understanding, but you need to look to the future. The stock market is filled with people who know the price but not the value of anything.
It would be good if the Canadian tax system had reduced complexity. However, you can use it. You can use RRSPs, RESPs and TFSAs. Gain a certain amount of knowledge about these and use them. The RESPs are good as you put money into them and the government will also give you money. They can be a good deal.
He does not buy on margin. If you have credit card debt, the best return you can get is to pay of this debt.
Active traders use Quest Trade. The day traders do not make money, but Quest Trade does. It was harder to make money in the past because of investing fees. Now fees are cheap and most trades are for $9.99.
He does not believe that the market is perfectly efficient. You can make money by buying a company that is a take-over target. If the deal falls off the table, often the company still gets taken over later.
You have to have discipline. Without discipline you have no method. When he buys a stock he sets a sell price. They mostly stick to it but sometimes they can change it.
You should buy near the end of the year and take advantage of the Santa Claus rally. Often stocks go up after they sell them and sometimes they go down after they buy them. However, this is life.
After 9/11 airlines companies were decimated. They were so tough that people thought KLM would not make it. However, the company thought they would recover and they did. This is short term thinking against long term thinking.
They bought an US insurance company that had problems. They thought they would raise rates and do better later. At this time they have done less than nothing, but they still have the company. The company has no debt. Companies with no debt have a hard time going bankrupt. They will hold on to companies that have no debt. This might look stupid in the short term, but in the long term they can make money.
He thinks that climate change should influence your investment decisions. There are good and bad things about climate change. A possible good thing is that you can grow food in places that we could not before. However, on balance climate change is bad.
He thinks that marijuana should be legalized. However, this is going to cause problems.
He said that Trudeau's father was bad at economics. So is the son. We are heavy into debt and this makes no sense. Ontario liberals have huge problem with debt. It is causing them to sell off their crown jewels.
On my other blog I wrote yesterday about North West Company (TSX-NWC, OTC-NWTUF)... learn more. Next, I will write about Pason Systems Inc. (TSX-PSI, OTC-PSYTF)... learn more on Wednesday, November 1, 2017 around 5 pm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.
The most interesting thing he said was they companies that have no debt have a hard time going bankrupt. He also mentioned that they have commentaries on their site.
Benj Gallander says he is a value guy. He says you can get better returns by turning off the noise. Cut the noise. Too many people react to it. Do not pay too much attention to your returns. Warren Buffett says that you should be greedy when others are fearful and fearful when others are greedy.
He says that rarely no more than 3 or 4 variables count in picking stocks. The rest is noise. No one cares more about your money than you do. Active investors do worse than passive investors. Active investors pay more fees.
Stay away from actively managed mutual funds. They have higher fees. Go to Mutual Funds that have lower fees. ETFs are even better.
Most people can manage their own money, even though a lot of people say differently. You should invest yourself and save. Benjamin Franklin said that the investment in knowledge is the best investment. Investing in your career is the best thing you can do.
John Temple said that the phrase "This time it is different" is the worst saying ever.
Bitcoin and crypto-currencies are really hot and the next big thing. You can make money on them, but you can also lose lots. What is big at this show is pot. When investing look to see who is in management. What have they done before? Some pot company managers previously ran mining companies that never went anywhere.
Improve you investment returns by saving money and buy things when they are cheap. You have to be patient. Try to control your emotions. Charles Munk (Warren Buffett's partner) said that you should identify stocks that you want to buy and then wait and get to know the stocks.
Walking is one of the best ways of thinking up new ideas. It is good to fine a few good things to do. However, realize that we cannot know everything.
Do not invest in IPO's. Most IPO's do not do well. However, sometimes with IPO's you can get lucky and make lots of money.
He likes companies that have been around at least 10 years. Diversification is good, but do not over do this. The rear view mirror is great for understanding, but you need to look to the future. The stock market is filled with people who know the price but not the value of anything.
It would be good if the Canadian tax system had reduced complexity. However, you can use it. You can use RRSPs, RESPs and TFSAs. Gain a certain amount of knowledge about these and use them. The RESPs are good as you put money into them and the government will also give you money. They can be a good deal.
He does not buy on margin. If you have credit card debt, the best return you can get is to pay of this debt.
Active traders use Quest Trade. The day traders do not make money, but Quest Trade does. It was harder to make money in the past because of investing fees. Now fees are cheap and most trades are for $9.99.
He does not believe that the market is perfectly efficient. You can make money by buying a company that is a take-over target. If the deal falls off the table, often the company still gets taken over later.
You have to have discipline. Without discipline you have no method. When he buys a stock he sets a sell price. They mostly stick to it but sometimes they can change it.
You should buy near the end of the year and take advantage of the Santa Claus rally. Often stocks go up after they sell them and sometimes they go down after they buy them. However, this is life.
After 9/11 airlines companies were decimated. They were so tough that people thought KLM would not make it. However, the company thought they would recover and they did. This is short term thinking against long term thinking.
They bought an US insurance company that had problems. They thought they would raise rates and do better later. At this time they have done less than nothing, but they still have the company. The company has no debt. Companies with no debt have a hard time going bankrupt. They will hold on to companies that have no debt. This might look stupid in the short term, but in the long term they can make money.
He thinks that climate change should influence your investment decisions. There are good and bad things about climate change. A possible good thing is that you can grow food in places that we could not before. However, on balance climate change is bad.
He thinks that marijuana should be legalized. However, this is going to cause problems.
He said that Trudeau's father was bad at economics. So is the son. We are heavy into debt and this makes no sense. Ontario liberals have huge problem with debt. It is causing them to sell off their crown jewels.
On my other blog I wrote yesterday about North West Company (TSX-NWC, OTC-NWTUF)... learn more. Next, I will write about Pason Systems Inc. (TSX-PSI, OTC-PSYTF)... learn more on Wednesday, November 1, 2017 around 5 pm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.
Thursday, October 26, 2017
Money Show 2017 - Ryan Irvine 4
Ryan Irvine spoke in a Friday evening session on "Do it Yourself Stock Investment". Ryan Irvine is the President of Keystone. Part of this session had Aaron Dunn as the speaker. Their site is www.keystocks.com. I went because Keystone has given good talks in past Money Shows. It was a long session so I have broken my report into four parts.
This last section is on how to deal with Hot Tips. These are the questions you should ask yourself and deal with.
Step 1: Does the company have sales or revenue? Have someone actually paid for their product? It is an investment if they have sales but just a concept if there are no sales.
Step 2: Is the company making any money. Just looking at these first two items can remove 70% of ventures stocks from a list you might buy.
Step 3: Do they have a weak or strong balance sheet? If they have debt do they have the means of paying it off besides issuing new shares?
Step 4: Is there a positive or negative outlook for growth? To find this information go to the company's Management and Discussion Analysis (MD&A).
Step 5: Does the company have a reasonable valuation? What is the Price/Earnings Ratio? Is the P/E Ratio great than the current market? (The current market P/E Ratio is 18.)
On my other blog I wrote yesterday about Medtronic Inc. (NYSE-MDT)... learn more. Next, I will write about Equitable Group Inc. (TSX-EQB, OTC-EQGPF)... learn more on Friday, October 27, 2017 around 5 pm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.
This last section is on how to deal with Hot Tips. These are the questions you should ask yourself and deal with.
Step 1: Does the company have sales or revenue? Have someone actually paid for their product? It is an investment if they have sales but just a concept if there are no sales.
Step 2: Is the company making any money. Just looking at these first two items can remove 70% of ventures stocks from a list you might buy.
Step 3: Do they have a weak or strong balance sheet? If they have debt do they have the means of paying it off besides issuing new shares?
Step 4: Is there a positive or negative outlook for growth? To find this information go to the company's Management and Discussion Analysis (MD&A).
Step 5: Does the company have a reasonable valuation? What is the Price/Earnings Ratio? Is the P/E Ratio great than the current market? (The current market P/E Ratio is 18.)
On my other blog I wrote yesterday about Medtronic Inc. (NYSE-MDT)... learn more. Next, I will write about Equitable Group Inc. (TSX-EQB, OTC-EQGPF)... learn more on Friday, October 27, 2017 around 5 pm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.
Tuesday, October 24, 2017
Money Show 2017 – Ryan Irvine 3
Ryan Irvine spoke in a Friday evening session on "Do it Yourself Stock Investment". Ryan Irvine is the President of Keystone. Part of this session had Aaron Dunn as the speaker. Their site is www.keystocks.com. I went because Keystone has given good talks in past Money Shows. It was a long session so I have broken my report into four parts.
Keystone also likes Dividend growth stocks. These are exciting because they work. Dividends provide a constant stream of income and will reduce losses. Growth dividends help total return. Why dividend growth? The difference between dividend growth and other stocks is the dividends. Over the longer term you can lose money on companies that do not pay dividends.
Another reason to like dividend growth is volatility. These stocks have lower volatility. Less volatility means less risk. The same rules apply that is the companies need to show profitability and cash flow. They need to grow in per share earnings and dividends. They need to be in a healthy financial position and have a reasonable valuation.
Avoid companies with high payout ratios. A payout ratio of 90% or above is high. Also avoid heavy concentrations in one industry in your stock picks.
What you want is a hybrid portfolio of 8 to 12 stocks across the 3 risk categories of Aggressive Portfolio, Moderate Portfolio and Conservative Portfolio.
One stock recommended is Brookfield Infrastructure Partners (TSX-BIP.UN). It is a global infrastructure company. It has very high quality assets. They continue to increase dividends or distributions. They are driven by organic growth investment and accretive acquisitions. They have recently bought a Brazilian gas transmission company and an Indian Telecom business. There is demand for high quality infrastructure. This is a long term investment.
Another pick is Algonquin Power and Utilities (TSX-AQN, NYSE-AQN). It is into renewable power and regulated utilities. They have had 6 straight years of dividend increase and focuses on North America. It is a solid company.
On my other blog I wrote yesterday about Canadian Pacific Railway (TSX-CP, NYSE-CP)... learn more. Next, I will write about Medtronic Inc. (NYSE-MDT)... learn more on Wednesday 25, 20157 around 5 pm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.
Keystone also likes Dividend growth stocks. These are exciting because they work. Dividends provide a constant stream of income and will reduce losses. Growth dividends help total return. Why dividend growth? The difference between dividend growth and other stocks is the dividends. Over the longer term you can lose money on companies that do not pay dividends.
Another reason to like dividend growth is volatility. These stocks have lower volatility. Less volatility means less risk. The same rules apply that is the companies need to show profitability and cash flow. They need to grow in per share earnings and dividends. They need to be in a healthy financial position and have a reasonable valuation.
Avoid companies with high payout ratios. A payout ratio of 90% or above is high. Also avoid heavy concentrations in one industry in your stock picks.
What you want is a hybrid portfolio of 8 to 12 stocks across the 3 risk categories of Aggressive Portfolio, Moderate Portfolio and Conservative Portfolio.
One stock recommended is Brookfield Infrastructure Partners (TSX-BIP.UN). It is a global infrastructure company. It has very high quality assets. They continue to increase dividends or distributions. They are driven by organic growth investment and accretive acquisitions. They have recently bought a Brazilian gas transmission company and an Indian Telecom business. There is demand for high quality infrastructure. This is a long term investment.
Another pick is Algonquin Power and Utilities (TSX-AQN, NYSE-AQN). It is into renewable power and regulated utilities. They have had 6 straight years of dividend increase and focuses on North America. It is a solid company.
On my other blog I wrote yesterday about Canadian Pacific Railway (TSX-CP, NYSE-CP)... learn more. Next, I will write about Medtronic Inc. (NYSE-MDT)... learn more on Wednesday 25, 20157 around 5 pm.
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.
Friday, October 20, 2017
Money Show 2017 - Ryan Irvine 2
Ryan Irvine spoke in a Friday evening session on "Do it Yourself Stock Investment". Ryan Irvine is the President of Keystone. Part of this session had Aaron Dunn as the speaker. Their site is www.keystocks.com. I went because Keystone has given good talks in past Money Shows. It was a long session so I have broken my report into four parts. This is the second part.
This company looks at small cap growth stocks. For Canadian stocks that is less than $500M and for the US that is less than $5B. Small cap stocks are not necessarily high risk. You can get higher returns from small caps stocks over the longer term. Smaller companies can be more rewarding. They like small caps that are trading at or near P/B Ratio of 1.00. They like especially small cap value stocks.
In 2006 Warren Buffet said that if had a $1M he would invest in smaller companies. He would make a higher return on a $1M company than on a $1B company. But you have to turn over lots of stocks to find the gems to invest in. Small caps lack coverage so you can find bargains. You should buy before the big institutions can by a stock. Big institutions have restrictions on what they can buy. Smaller cap have higher growth prospects. It is easier to go from $0.5M to $1M than from $0.5B to $1B.
Small caps can have higher insider ownership. Many large cap stocks started as small caps. Just investing in one recommendation can be bad as the recommendation can be wrong. Investing in a few small cap recommendations is better.
What you should look for is first a strong balance sheet with lack debt and positive working capital. Next you should look for positive cash flow and earnings growing over time. This is necessary for long term growth. Next you should look for sustainable growth. You can look for alterative valuations. The potential for dividends and dividend growth are good.
Another thing you want is a management team with significant share ownership. You want them to be in a business that can be understood. You would want the company to operate in a safe jurisdiction. You want a company with a positive industry outlook and a niche outlook. Lastly you want a company with a strong track record that meets or exceed their objectives.
A recommendation is Sylogist Ltd (TSX-SYZ, OTC-SYZLF). It has a published mission. It does critical software. Some 62% of their revenue is subscription based. It has zero debt and a strong balance sheet. It has a strong track record in revenue and EBITDA growth and dividend payments. There was a pause in growth in 2017 and you should buy for what it will do in 2018.
If growth is not on a per share basis it does you no good. What you want is growth at a reasonable price. The target for this company is a stock price of $12.15 to $12.45. The company is reinvesting for organic growth.
The next company that they recommended was Photon Control Inc (TSX-PHO, OTC- POCEF). This is on TSX-V. It designs and manufactures optical sensors to original equipment manufacturers (OEMs). Theirs are the sensors for the internet of things in toaster, shoes etc. They have growth in revenue and profit. Their net income peaked in 2015 and they have currency issues and onetime expenses costs because litigation.
Some 25% of their market cap is in cash. They have a large order backlog. They have doubled their manufacturing facility and they are no longer cheap. The trailing P/E Ratio is 20, but if you take out cash it is 16.
Hammond Power Solution Inc. (TSX-HPS.A, OTC-HMDPF) is another recommendation. It was recently recommended. They have been in business for around 100 years. They are a transformer manufacturer. Their quarter two 2017 is strong. Their net earnings jumped. They sell to the resources sector. They built up too fast and the resources sector tanked. Now they are coming back. There is an uptick in business and in the resources sector.
They are now a growth company that is tracking at a discount. There will be driving growth going forward. They will have old growth from resources and new growth from renewables.
On my other blog I wrote today about Trigon Metals Inc. (TSX-TM, OTC-PNTZF)... learn more. Next, I will write about Canadian Pacific Railway (TSX-CP, NYSE-CP)... learn more on Monday, October 23, 2017 around 9 am.
Also, on my book blog I have put a review of the book Maximum Canada by Doug Saunders learn more...
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.
This company looks at small cap growth stocks. For Canadian stocks that is less than $500M and for the US that is less than $5B. Small cap stocks are not necessarily high risk. You can get higher returns from small caps stocks over the longer term. Smaller companies can be more rewarding. They like small caps that are trading at or near P/B Ratio of 1.00. They like especially small cap value stocks.
In 2006 Warren Buffet said that if had a $1M he would invest in smaller companies. He would make a higher return on a $1M company than on a $1B company. But you have to turn over lots of stocks to find the gems to invest in. Small caps lack coverage so you can find bargains. You should buy before the big institutions can by a stock. Big institutions have restrictions on what they can buy. Smaller cap have higher growth prospects. It is easier to go from $0.5M to $1M than from $0.5B to $1B.
Small caps can have higher insider ownership. Many large cap stocks started as small caps. Just investing in one recommendation can be bad as the recommendation can be wrong. Investing in a few small cap recommendations is better.
What you should look for is first a strong balance sheet with lack debt and positive working capital. Next you should look for positive cash flow and earnings growing over time. This is necessary for long term growth. Next you should look for sustainable growth. You can look for alterative valuations. The potential for dividends and dividend growth are good.
Another thing you want is a management team with significant share ownership. You want them to be in a business that can be understood. You would want the company to operate in a safe jurisdiction. You want a company with a positive industry outlook and a niche outlook. Lastly you want a company with a strong track record that meets or exceed their objectives.
A recommendation is Sylogist Ltd (TSX-SYZ, OTC-SYZLF). It has a published mission. It does critical software. Some 62% of their revenue is subscription based. It has zero debt and a strong balance sheet. It has a strong track record in revenue and EBITDA growth and dividend payments. There was a pause in growth in 2017 and you should buy for what it will do in 2018.
If growth is not on a per share basis it does you no good. What you want is growth at a reasonable price. The target for this company is a stock price of $12.15 to $12.45. The company is reinvesting for organic growth.
The next company that they recommended was Photon Control Inc (TSX-PHO, OTC- POCEF). This is on TSX-V. It designs and manufactures optical sensors to original equipment manufacturers (OEMs). Theirs are the sensors for the internet of things in toaster, shoes etc. They have growth in revenue and profit. Their net income peaked in 2015 and they have currency issues and onetime expenses costs because litigation.
Some 25% of their market cap is in cash. They have a large order backlog. They have doubled their manufacturing facility and they are no longer cheap. The trailing P/E Ratio is 20, but if you take out cash it is 16.
Hammond Power Solution Inc. (TSX-HPS.A, OTC-HMDPF) is another recommendation. It was recently recommended. They have been in business for around 100 years. They are a transformer manufacturer. Their quarter two 2017 is strong. Their net earnings jumped. They sell to the resources sector. They built up too fast and the resources sector tanked. Now they are coming back. There is an uptick in business and in the resources sector.
They are now a growth company that is tracking at a discount. There will be driving growth going forward. They will have old growth from resources and new growth from renewables.
On my other blog I wrote today about Trigon Metals Inc. (TSX-TM, OTC-PNTZF)... learn more. Next, I will write about Canadian Pacific Railway (TSX-CP, NYSE-CP)... learn more on Monday, October 23, 2017 around 9 am.
Also, on my book blog I have put a review of the book Maximum Canada by Doug Saunders learn more...
This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.
See my site for an index to these blog entries and for stocks followed. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.
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