It would be stupid to completely change my investing style for 2017. Except for a couple of very bad picks, most of my 2016 picks were at least OK.
For the year ahead, I thought about using the magic formula in a brain-dead manner (just pick the highest ROE/low ROE stocks and don't care about the quality of stocks).
Or I thought that I could mix the usual high ROE/not too high PE with some not so obvious picks (Rochon's picks).
Almost all of these are momentum stocks because the growth in the recent past has been great. Some of them are ready for a big acquisition (Constellation Software, CGI Group, Knight Therapeutics, Disney...). Half of them have a great ROE (Constellation Software, Alimentation Couche-Tard, Linamar, Tucows, United Therapeutics). Some of them operate in boring industries (Alimentation Couche-Tard, Linamar, Mohawk, LKQ). I really believe in this group and I strongly believe that it will beat the market over the next 12 months.
1- Constellation Software (softwares);
2- CGI Group (consulting services);
3- Alimentation Couche-Tard (convenience stores);
4- Linamar (auto parts);
5- Knight Therapeutics (healthcare, but mostly a full-cash company for now);
6- Tucows (Internet services);
7- United Therapeutics (healthcare);
8- Mohawk Industries (carpets and ceramics);
9- Disney (movies, thematic parks, ESPN and more);
10-LKQ (auto parts and cours à scrap).
I invite everybody to suggest stocks for 2017. Some guys wrote recently that they wanted a challenge. Just compete with me and with all the crazy guys who read this blog.
So, just build a 10 stocks portfolio like I did. If you're lazy or possessive of your precious portfolio, you can suggest only a couple of names that appear interesting to you.
Fuck those holiday times which are over now. Let's get serious. Let's make money.
I'll take up the challenge and I'll start off with three of my picks from last year, I like to buy and hold my positions if I can...
RépondreSupprimer1- Knight Theraputics GUD healthcare financial
2- TIO Network Corp. TNC technology
3- Brookfield Property Partners BPY.UN commer real estate
4- Sandvine Corp. SVC technology
5- Currency Exchange Internal CXI financial
6- High Artic Energy Services HWO energy services oil
7- Callidus Capital Corp CBL financial
8- Pine Cliff Energy Ltd PNE energy gas
9- Brookfield Business Partners BBU.UN private equity
10-Logistec Corp. LGT.B industrial
I wonder how these holdings will be doing a year from now. I wish I knew but that is the beauty of being in the market and dealing with the uncertainty of the wheel of time.
4-
Here are my 10 picks, from a loyal reader in Toronto (I'll go my 'Edutrader'):
RépondreSupprimer1. Knight Theraputics
2. Brookfield Infrastructure
3. Brookfield Renewable Energy
4. Fairfax India
5. Hydro One
6. MacDonald Detwiler
7. Stella Jones
8. Enghouse Systems
9. Alimentation Couche-tard
10. Richelieu Hardware
Thanks and happy new year Penetrator!
10 picks from a loyal reader in Hong Kong. This portfolio has high ROE and low PE. But most picks are big elephants so I don't expect anything spectacular.
RépondreSupprimer1.International Business Machines Corp. NYSE:IBM
2.MGM China Holdings Ltd. HKG:2282
3.United Therapeutics Corp. NASD:UTHR
4.Industrial and Communication Bank of China - H shares HKG:1398
5.Audi AG ETR:NSU
6.Gilead Sciences Inc. NASD:GILD
7.Linamar Corp TSE:LNR
8.Novo Nordisk A/S-Sponsored ADR NYSE:NVO
9.Sturm Ruger & Co. Inc. NYSE:RGR
10.Howden Joinery Group PLC. LON:HWDN
Happy new year Penetrator!
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RépondreSupprimer1. BofI Holding
Supprimer2. The Scotts Miracle-Gro
3. Universal Health Services
4. Enzo Biochem
5. Lam Research
6. Ceapro
7. Canopy Growth Corp
8. Biogen
9. Chase Corp
10.InterDigital
1. Constellation Software CSU.to
RépondreSupprimer2. National Beverage FIZZ
3. Knight Therapeutics GUD.to
4. McKesson Corp MCK
5. Nevsun Resources NSU.to
6. Patrick Industries PATK
7. Paycom Software PAYC
8. Supernus Pharmaceutical SUPN
9. Smith & Wesson SWHC (called American Outdoor Brands as of Jan 1)
10. Tucows TCX (more liquidity on the nasdaq than toronto exchange)
Good luck everybody. Special thanks to those putting in the effort to come up with ten picks they would gladly put money on.
Dean A
RépondreSupprimerThis is it !!! Are you ready?
1. Constellation software
2. CGI Group
3. CRH medical
4. Ceapro
5. Cardinal Energy(betting on the energy rebound)
6. Facebook
7. Kinaxis
8. Knight Therapeutics
9. Tahoe Resources (I let my pet monkey pick this one cause i love him)
10. Walt Disney
Hope y' all like these picks!
From Belgium, Europe: lowish ROE, but decent compounders, mostly undervalued OR absurdly valued.
RépondreSupprimer1. European Reliance (Greek insurance)
2. Clarke (invest holding in Canada)
3. Velcan Energy (French Hydro Electricity producer in EM - under cash)
4. Sofina (PE invest holding in Canada - family owned)
5. Fonar (MRI scan centres + machines - family owned - low vs Owner Earnings)
6. Mongolian Growth Group (real estate + securities in Mongolia)
7. Pardee Resources (timber + coal invest holding)
8. Altamir (French invest holding in PE)
9. Daejan Holdings (low debt real estate in London)
10. Fundsmith Emerging Equities (value invest fund by Terry Smith in EM)
Oops. Sofina is Belgian, of course (not Canadian).
SupprimerYou really invest in Mongolia?!?!?!
SupprimerI cannot speak for el-t, but I invest in Canadian mining companies that are in places that make Mongolia look like a shining example of democracy and good, honest government. This is risky but profits can be huge.
SupprimerPenetrator, you really invest in auto parts? The market does not want to give you a p/e higher than 10. There's no room for p/e multiple expansion. Auto parts may be your mongolia.
They do everything right, make tons of money and the market still shits on them.
Nice work! Happy New Year to all. I'll be on BNN Jan 24th and will present the usual 'top 3 picks' then... but these all look good. Good luck to us, J.
RépondreSupprimerJason,
SupprimerYou are selling your wealth management services, would you consider taking the top 3 names on Penetrator's list of top ten as your top 3? No need to be ashamed. He's just that good...and he works for poutine and steamed hot dogs. Very affordable sub-contracting of financial advisory services.
If you are in wealth management and you get on a show telling us how some penny stock on the turkey exchange *(the exchange where most companies do not even have earnings)* is going to make us rich, your target customer is going to cringe. You may beat us in a stock picking challenge, but you're scaring your prospective customers. As a prospective client, I'd feel like I'm sending you to the casino with my life savings to play roulette. LOL. I don't mind feeling that way with my own stupid picks, but a pro's picks have to inspire confidence. They have to scream: fat chance you lose money with this one. Even if it goes down, it will go up again.
It will be intereting to see if Mr Vicario goes with names like Constellation and CGI or with rock solid blue chips like Biosyent and Ceapro. Stay tuned everybody.
Barney
RépondreSupprimer1. Lloyds Banking Group
2. Neenah Papers Inc
3. Symantec Corp
4. Gilead
5. Mondelez International
6. Goeasy Ltd
7. Endo International PLC
8. Disney
9. Hewlett Packard Enterprise Company
X. First US Bancshares Inc.
"Compounders almost regardless of valuation"
RépondreSupprimer1. BRK.B
2. GOOG
3. V
4. MA
5. NVO
6. ROST
7. TJX
8. ANSS
9. FDS
10. FB
1. Fnma
RépondreSupprimer2. Bam
3. Vrx
4. Lbtyk
5. Lnr
6. Fox
7. Cmpr
8. Mkl
9. Brk/b
10. Atd/b
Angelo:
RépondreSupprimerI have been on BNN 4 times and here is a list of the picks I've made:
July: RX, CZO, DOL
August: CZO, DCM, ATD.b
October: CSU, SJ, DCM
I was also on in June where I picked NKE, BYD (but this wasn't a Market Call segment).
I've been very clear about what I intend to put forward on Market Call. Every time I will have three picks as follows:
1) one high ROE large-ish cap stock that we own
2) one high ROE smaller cap stock we own
3) one completely off the radar high ROE stock that we likely don't own
I also don't get to speak about position sizing. In our Moderate Model as an example, I have a 5% weight in ATD.b and a 1% weight in CZO... so please also keep that in mind.
I'm also only allowed to pick three and I can only repeat one pick every time I'm on the show. I own ~20 stocks for clients. This means for me to get all my picks out, it's going to take a year or two.
Most of our money is in: CSU, SJ, ATD.b, DOL, CRH, CCL.b, GIB.a, RX, FB, NKE, MA, ROST, GUD and T
There you go... that's my list I guess for this thread.
I don't like hearing what you say re: prospective clients and even though I believe your impression is wrong (as explained above) it is a valid point and I can assure you I will take this into consideration going forward. There are limitations to the BNN gig and I'm deliberately trying to be different than other guests. Who wants to hear about BMO and Suncor?... BORRRRRRRING. My 3 cents.
Personally,I like your style.We need someone to replace Donville and you are the closest I have seen so far.
SupprimerUnlike others on this blog,I am looking for alpha and some of your picks have the prospect of doing that.
CZO is up 40% from my entry for example.As for risk a little portfolio management goes a long way.
Please don't get all conservative because something doesn't work out.
I hope you have more CZO's in the future.
Thanks for contributing.
Excellent feedback from Mr Vicario. Great picks and very important points on position sizing to adjust for risk/market cap etc.
SupprimerI also think he has picked the dow stock that will do best among those 30 this coming year (NIKE which did worst among dow stocks last year).
I'm sticking mostly with picks that have a market cap of a billion or two myself. They have a better chance of doubling in the next 5 years. I appreciate the smaller cap picks. Maybe I'm wrong and I don't know the target market a pro money manager caters to. My accountant likes Suncor and the big banks and Telus and rolls his eyes when he hears about my small cap picks or a mining stock. LOL. I suspect upper middle class professionals like boring and safe. Not sure.
The small and mid cap space is my favorite area to hang out in. I believe more inefficiencies exist there. My largest cap which I hold right now is BPY.UN. Its more of an art form really, picking stocks, putting so much money into each one and building up your investment portfolio. But that's all part of the allure of the market. We're fortunate that the Penetrator has created this gathering site for DIY investors. In his own way he has taken over from Donville in that sense.
SupprimerOh and I already own the first three on Mr. Poutine's list...
RépondreSupprimerAnd, here's some confidence for you:
I bought my first RX share at $1.50 and my first CZO share at $0.56. I'm underwater on DCM. So out of 12 picks or whatever it is, I've had one stinker. Oh, and I think DCM will go back up. Even though RX, CZO and DCM are small, they all have real businesses with revenues and profits. Yes they are speculative but that is reflected in our position sizing.
Good luck to us.
TSX 10:
RépondreSupprimer1) Intertape Polymer Group (ITP) (SDRSP)
2) Toromont Industries (TIH) (SDRSP)
3) CGI Group (GIB.A)(SDRSP)
4) Canadian National Railway (CNR)(SDRSP)
7) Tucows (TC)(SDRSP)
3) Savaria Corp (SIS)(TFSA)
6) Kinaxis (KXS)(TFSA)
8) K-Bro Linen (KBL) (TFSA)
9) Knight Therapeutics (GUD) (TFSA)
10) Grande West Transportation (BUS) (TFSA)
Jason Donville hasn't been on BNN for a long time. Does anyone know where Jason Donville is?
RépondreSupprimerWent into the bunker and as of October 2016 is making his quarterly news letter only available to Donville Kent clients. Unless he comes out of the rabbit hole, I'd bet we won't see much written of the dude in 2017 on this forum. Onward and upward for the readers on here - we're fully capable of being self sustainable.
SupprimerI had breakfast with Jason Donville in November when he was in Vancouver last. He's decided to stay away from BNN and making his newsletter available to the public. His fund is closed, he had a rough year (mind you only down ~2%). My sense is he feels there's very little benefit from him making himself available for public praise and ridicule and frankly I can't blame the guy. While I've been managing money for 18 years it's only been the last year or so that I'm putting myself out there in the public domain. I don't mind being challenged, heck I don't even mind being poked and ridiculed as long as the comments are fair and respectful but the fact of the matter is most people who visit this site or watch BNN won't ever give me a dollar to manage and hence don't represent income for me and my family. I think in this day and age of the Internet where anyone with a keyboard is an expert that people often forget that the likes of Donville and me are real people with real lives and real feelings. Sorry to get sappy here but I truly believe that Jason just got fed up. Look at the guy's track record; it's phenomenal. Ya he fucked up a few big picks and ya he wouldn't waver when he probably should have but the guy contribute(d) his work with zero expectation of financial return (his fund is closed and BNN types don't invest w him anyways). I can't speak for JD but I do it cuz I love this stuff. It literally doesn't feel like work to me. So with that said let's have a great 2017 and good luck to us.
RépondreSupprimerI think I mentioned this somewhere before in this blog. Donville has no responsibility to whoever decides to follow his advice. His only fiduciary responsibility is to the stakeholders in his funds. People have to learn to take responsibility for their own actions. When I make an investment in the market, I'm the one executing the keystrokes that makes it all happen. If you can't take responsibility for your own actions you shouldn't be investing for yourself, because the market in its own time will inflict many lessons on you. And there are no investing gods out there either. We're all just human beings trying to do the best we can. In the end I have found that the market itself has been my best teacher and all the more so when it really hurts.
SupprimerAngelo:
RépondreSupprimerI don't think you are wrong in terms of what investors have been conditioned to care about. Conditioned by the financial media and financial companies who rely on selling "research" and high MER index funds dressed as active funds. I charge a reasonable fee for what I do and my opinion is as follows: if you're going to charge a fee over and above what it costs to slap a few ETFs together and get market performance you sure as hell better be putting your clients in a position to outperform. Our flagship fund has a correlation to the market of 0.13 while beating it by an average of 6%/year since inception... and this is a balanced fund. Incidentally if it was a mutual fund it would rank #1 in the country. So why isn't my phone ringing off the hook and people throwing money at me? Because we are different... because owning a concentration of high ROE stocks is PERCEIVED to be risky because that's what their accountant, broker or talking head on TV AND their economics prof or textbook tells them. But it's utter bull shit. We have not only trounced the markets with this strategy (as has Donville, Hirsch, Mawer, Berkshire, Greenblaat etc...) but most importantly we've done it with LESS volatility than our benchmark. People are lemmings when it comes to investing. If they weren't we wouldn't have hundreds of billions of dollars invested in mutual funds who underperform the market they claim to be seeking to beat. Ok, I'm gonna get off my soap box but hopefully this makes sense. As a fund manager and investor I submit we have two choices:
1) go get market performance via cheap ETFs and resolve to the fact you'll still beat 85% of active managers OR
2) employ a strategy or portfolio manager who puts you in the position to outperform
Clearly I'm in the 2) camp but there's nothing wrong with 1). Putting your money in a fund that charges 2% and is basically the market is beyond crazy in my opinion. I know I'm preaching to the choir here but for me to justify my income and existence I feel like I need to find the CZOs, RXs, DCMs full well knowing that some of these will be crap... just the nature of the beast. If this resonates well and you've got family or friends asking who to invest with i would appreciate a referral; that's all I ask.
Well said Vicario! I also think Donville has a phenomenal record and has definitely made me money overall from some of his suggestions that I then did my own DD on. I know he will continue to produce stellar returns.
RépondreSupprimerAnyway here are my picks for 2017 in no particular order, good luck to all!
1.ITC
2.CRH (Thanks Donville, I'm averaged in at $3.70)
3.TIO
4.GUD
5.OTC
6.PBH
7.GILD
8.SIS
9.TOY
10.SHOP
Here are my picks for 2017.
RépondreSupprimer1. AGN.
2. LXFT
3.RL
4.UTHR
5. INP
6. WDC
7.AIG
8.FRFHF
9.MTYFF
10.HBI
Thanks Acioner.
RépondreSupprimerYou gave me one very good idea.
That's all it takes to make $$$$.
Hey ACe heartland can you let me know which one do you think is the very good idea among my list.
RépondreSupprimerAcloner, which INP do you mean? Input Capital corporation on the venture exchange or the etf that trades the India total return index?
SupprimerAlso: It's nice when other people find something valuable among your picks...but...which one of your picks do YOU have the most faith in? Why is that?
Input capital on venture exchange. I have had this stock for more than a year never sold a share. I picked up the shares in the bottom. I like the business because insider owns about 20% of the company so you have owner operator here who is working for shareholders not hired gun CEO. Their internal rate of return of capital is about 20-30%. There is a huge run way of reinvestment thus compounding shareholders return. Their operating cash flow in 2016 was 29 million with very low capex. The company is just 3 years old and they have started paying out dividend (about 2%); another sign the management is returning capital to shareholders....
SupprimerTheir clientele are farmers, they provide capital upfront to the farmer in the off seasons so that farmers can buy input (like seeds, equipments) during off season when the prices are 20-30% off and they never have to worry about monthly installments. Once they grow canola and harvest, then they pay back their loan with predetermined canola tonnage. The company sells the canola to crusher even at better price and makes some money trading canola futures too. They are growing very rapidly (profitably); they started out with less than 10 farmers 3 years ago and now they have 120 farmers (about). There are 50,000 farmers. Out of 50000, they will be targeting for about 20000 because not everyone is eligible. this is very new business model in ag space like streaming model they have in silver and gold.
I have held a small position in INP since March 2014 so I am still under water on this stock for now but I have high hopes for this company. This was an excellent summary of the company's prospects by Acloner...
SupprimerAcioner, I really like Haines Brands.Morningstar has it as undervalued and a 5 star.The numbers are great with a 2% dividend and share buyback.The ROE is excellent.The forward P/E is 10.5.
RépondreSupprimerI love the chart.Straight down for 2 years and oversold on the weekly chart.My favorite way to pick bottoms.
Finally,I like the product...wouldn't use anything else.
Me too. I also use Haines. Nothing else.
SupprimerHBI has a roe of over 40% (but with $4 billion in debt). What's the story with United Therapeutics (UTHR)? They are debt free. A six billion dollar company with $1 billion in cash and a lot of free cash flow coming in. They also have a roe above 40% and next year p/e of ten just like HBI.
RépondreSupprimerIs there something the financials are not telling us about UTHR? A patent about to run out? Weak pipeline? Competition cutting hugely into their turf? Seems like a screaming bargain on the surface.
United Therapeutics is on at least three of the lists (including the penetrator picks at the very top). what risks might UTHR be facing?
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SupprimerThere are 40 000 patients with PAH in the US. 10% get lung transplant and 90% need ongoing medical therapy.
SupprimerOrenitram:
current revenue about 160 million (run rate)
Revenue per patient for orenitram is close to 100,000 dollars/ year. That would be 1 billion dollars/year if orenitram captures 25% of market share.
potential revenue: 1 billion
Remodulin:
current revenue: 500 million
There are 3500 patients with external remodulin pump and if there is implantable pump, this number can double because many patients are unable to use pump and not willing to go through rigor of handling the pump.
Current revenue from remodulin is about 500 million with pump it can double to 1 billion.
Potential revenue: 1 billion
Tyavaso:
current revenue: 400 million (run rate)
Expiring patents and how company is trying to mitigating these risk:
Adcirca: 250 million dollar revenue: nothing they can do about it. Expiring 2017
Remodulin patent expiring in 2018. Planning on getting medtronic implantable pump by 2017.
THis is mission critical.
It will save remodulin patent. How? Medtronic will only sell branded remodulin on the implantable pump.
for subcutaneous remodulin, the company is developing new drug device combination (patent protected) schedule to launch at about patent expiring time frame.
Tyavaso : even if patent expires; it is protected because it was approved with the device which is only manufactured by United.
Orenitram patent can be protected by orange book till late 2020.
Pipeline:
Medtronic implantable pump by 2017
Freedom products: Orenitram for reduction of morbidity and mortality by 2018
Beats product: 2018; berapost in combination with tyvaso for reduction of morbidity and mortality.
By 2020: Inhaled trepostinil for Group III PAH. addressable market 3.5 billion.
So I don't see material revenue decline by 2020.
The key event will be approval of medtronic implantable pump.
so by 2020 potential revenue of the company could be:
Remodulin if the implantable pump approved: 1 billion
Orenitram: 1 billion
Tyavaso: 500 million:
so by 2020 I expect the revenue to increase towards 2.5 billion.
Hey Guys;
RépondreSupprimerI came across this fucking stock Williams-Sonoma (WSM); looks darn cheap but quality stock.
the stock is at 2 years low; 3% dividend yield; ROE averaged last 5 yrs > 20%; ROIC > 20%;
In past 5 years 1.6 billion returned to shareholders in the form of buy-backs and dividends. Shareholder friendly;
Growing earning per share,,, trading at forward PE of 13.
I did my own DCF modelling with following inputs:
no debt
FCF : 379 million (trailing)
10 yr growth rate: 3% (very very very conservative)
long term growth rate: 3%
Discount rate of 10%;
I get fair value estimate of 60 that is 20% discount to today's share price.
This is fucking screaming buy for long term; has excellent dividend growth;
Only thing that I couldn't understand is why the hell book value is not growing in tandem with EPS... it is because of dividend or what?
I want to know what am I missing here or just market is offering us something...
Seems like a bargain. The market is pricing in soft guidance, worried about future sales growth and possibly even concerned about the future of brick and mortar retailers. However, WSM seems to operate through both the retail and e-commerce channels.
RépondreSupprimerThis ties in beautifully with the very next blog entry about EVOLUTION. (evolution vs your portfolio/ jan. 5, 2017)
Do you have any idea their book value per share is not growing?
Supprimerno idea, Acloner.
RépondreSupprimerIn honor of memories past,today I purchased Valeant Pharmaceuticals @ $20.00.Should be interesting.
RépondreSupprimerBUY LOW.
Sorry,$22.00.
RépondreSupprimer2017 Top Picks
RépondreSupprimer1. GUD Knight Therapeutics
2. TNC TIO Networks
3. TOY Spinmaster
4. SHOP Shopify
5. BIR Birchcliff Energy
6. PBH Premium Brand Holdings
7. MPH Medicure
8. COR Coresite Realty
9. Ulta Ulta Cosmetics
10. APH Aphria
Hi unknown:
SupprimerI have been following PBH for sometime. It is one of the holdings of Turtle Creek asset management. What is your intrinsic value estimation on this stock?
Anyone's thought of cxi.to latest earnings release?don't know if I should average down
RépondreSupprimer