Investing

What did you buy? What might you buy??

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  • Nov 22nd, 2017 9:08 pm
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Sr. Member
Nov 14, 2003
809 posts
4 upvotes
Calgary
IrwinW wrote:
Nov 6th, 2017 4:21 pm
TD removed CCL.B from their model portfolio.
Looks like some people following this type of model, also dumped.
Volume today wasn't anything unusual, so likely a non-event.
how did you know that TD dropped them? Do you know which portfolio it was?
Member
User avatar
Oct 14, 2015
220 posts
26 upvotes
Drumheller
isleepinadrawer wrote:
Nov 7th, 2017 11:57 am
how did you know that TD dropped them? Do you know which portfolio it was?
I read it on 5iresearch.ca (members section).
I don't know which portfolio.
Deal Addict
Dec 3, 2014
1025 posts
183 upvotes
Ontario
Bought some more XLE at the open $70.30.

May look at some Cdn oil plays now. Open to suggestions.

Oil going up big or so says my crystal ball.
Jr. Member
Jun 25, 2012
117 posts
33 upvotes
Vancouver
In for some SNAP 15 puts before ER, taking a gamble on a disappoint.
Deal Addict
Dec 6, 2006
3795 posts
699 upvotes
Toronto
DuDe1411 wrote:
Oct 27th, 2017 5:26 pm
sold intc at 35 :( i'm not understanding this market anymore. they do not make any sense.
i'm waiting for AMD to go to $10 so i can buy more lol
Let's see what happen to AMD price tomorrow....
Deal Addict
User avatar
Oct 9, 2008
4038 posts
876 upvotes
Thornhill
stockboy88 wrote:
Nov 7th, 2017 3:06 pm
In for some SNAP 15 puts before ER, taking a gamble on a disappoint.
Good job man! -19% in AH.
Deal Addict
Dec 6, 2006
3795 posts
699 upvotes
Toronto
DuDe1411 wrote:
Nov 7th, 2017 4:15 pm
what's happening to AMD tomorrow? lol
Some guy left, heard from friends, should hit news soon perhaps.
Newbie
User avatar
Oct 15, 2017
30 posts
19 upvotes
boyohboy wrote:
Nov 7th, 2017 11:00 am
damn 70% premium... that's crazy
wasnt Alramforce always had a saying it was a public traded company in it's commercials.. lol.. it was screaming buy me.
Newbie
Oct 7, 2017
14 posts
ZCL down 23% post earning. Does anyone think it’s a good buy at this price?
Deal Addict
Nov 9, 2013
1908 posts
666 upvotes
Edmonton, AB
treva84 wrote:
Nov 6th, 2017 11:53 am
Thinking about KMB
Passed on KMB.

Bought SBUX.
Deal Addict
Dec 3, 2014
1025 posts
183 upvotes
Ontario
treva84 wrote:
Nov 7th, 2017 8:49 pm
Passed on KMB.

Bought SBUX.
What’s the SBUX growth story nowadays? China?
Deal Addict
Nov 9, 2013
1908 posts
666 upvotes
Edmonton, AB
llpresident wrote:
Nov 7th, 2017 10:58 pm
What’s the SBUX growth story nowadays? China?
NA same store sales are still growing (2-3%) which is good, but yes they are expecting 6-8% same store sale growth from their international markets (i.e. China). They are also starting to open Princi Bakeries in their US locations, which will hopefully increase same store sales (https://www.cnbc.com/2017/11/07/starbuc ... -2018.html).

Nonetheless, I think SBUX's growth will slow moving forward as it continues to mature. I think management recognizes this which is why they increased their dividend by 20%, and are targeting ~ 12% increases each year. With that being said management is still targeting low double digit earnings growth moving forward (i.e. low teens down from low twenties).

Overall I think SBUX has a stronger moat than KMB and the compounded growth moving forward will be higher. I would consider SBUX a premium brand so perhaps KMB would be more resilient in an economic down turn, but looking historically SBUX earnings only dropped by 18% in 2008 and then recovered shortly thereafter. The dividend didn't start getting paid until 2010 but the payout ratio is fairly conservative despite the growth, so in a recession I would anticipate they would just slow / halt dividend growth, rather than cutting it. Time will tell!
Deal Addict
User avatar
Apr 12, 2012
1449 posts
299 upvotes
Toronto
Explaining the wide gap between analysts' price targets and Enbridge's depressed stock price

JOHN HEINZL
INVESTMENT REPORTER
10 HOURS AGO
NOVEMBER 7, 2017FOR SUBSCRIBERS
With Enbridge's shares sinking last week amid growing concerns about its dividend growth outlook, today I'm presenting a Q&A to help investors put the pipeline giant's challenges into context.

Analysts still have lofty price targets for Enbridge shares, even after the stock got crushed last week when the company failed to reiterate its 10- to 12-per-cent dividend growth guidance. Do you think these price targets are realistic?

It's true that analysts have been largely unfazed by the recent pullback in the stock. According to Thomson Reuters, of the 16 analysts who follow the company, there are nine buy ratings, seven holds and no sells. The average 12-month price target is $60.73 – or nearly 30 per cent more than Enbridge's closing price of $46.95 in Toronto on Tuesday.

That's a huge implied return, and it's even bigger if you include Enbridge's dividend, which currently yields 5.2 per cent. I'd be thrilled to make such an outsized return on a stock, but I'm certainly not counting on it. I do, however, expect that the share price and dividend will grow over the long run, for reasons that I'll explain shortly.

If analysts are so positive on Enbridge, why is the market so negative?

Analysts are focusing on the long-term benefits of Enbridge's $31-billion capital program (from 2017 through 2019) and its recent $37-billion acquisition of Spectra Energy Corp., whereas bearish investors are focusing on the short-term uncertainties regarding how Enbridge will fund its capital plans without impairing either its credit ratings or its dividend growth – one of the key reasons people own the stock.

As an Enbridge shareholder myself – I own the stock personally and in my Yield Hog model dividend growth portfolio (tgam.ca/dividendportfolio) – I believe the company's short-term challenges are manageable, although I suspect the stock will remain under pressure until there is more clarity on how Enbridge intends to proceed.

What role do Enbridge's credit ratings play in this?

Enbridge, which has about $64.9-billion of debt, stressed on the third-quarter conference call that protecting its strong investment grade credit ratings is a priority. It's worth noting that three of the four major credit agencies – namely Standard & Poor's, Fitch and DBRS – assign Enbridge a stable triple-B-plus (or equivalent) rating. That is three notches above speculative grade and speaks to the company's sound financial position.

The one exception is Moody's, which rates Enbridge's debt at Baa2 – two notches above speculative – with a negative outlook. Moody's (which in October downgraded subsidiary Enbridge Income Fund to Baa3 from Baa2) has said that Enbridge "could be downgraded" if the company fails to reduce its ratio of debt-to-EBITDA (earnings before interest, taxes, depreciation and amortization) to about 5.5 by the end of 2017. As of the end of the second quarter, the ratio was about 6.5, according to Moody's.

Will Enbridge cut its dividend growth target?

When Enbridge failed to reiterate its dividend guidance, many investors assumed it was signalling a slowdown in the growth rate from its 10- to 12-per-cent target as a way to save cash and help to preserve its credit rating. However, most analysts say it's more likely that Enbridge will come in at the low end of the current dividend growth range when it unveils its plans at its annual investor day in mid-December.

Why not just trim its dividend guidance?

For one thing, it could damage management's credibility. For another, Enbridge has other options for raising cash, including asset sales.

"We believe that a stepped up asset monetization program could be unveiled at the upcoming Enbridge Day," RBC Dominion Securities analyst Robert Kwan said in a note. "Assets that we believe could be attractive … sale candidates include the North American renewable power business, minority interests in long-term contracted pipelines and holdings in other partially owned assets."

What about the longer term?

Regardless of what happens in the short term, Enbridge's cash flow and debt ratios are poised to improve meaningfully over the next few years as the Spectra acquisition and new capital projects both start contributing fully to Enbridge's results, analyst Darryl McCoubrey of Veritas Investment Research said in an interview.

Including a full year of results from Spectra (which was acquired in late February) and from about $13.5-billion of capital projects that will have been put into service by the end of 2017, Enbridge's available cash flow from operations (ACFFO) is poised to rise to a range $4.30 to $4.50 a share in 2018, up from an estimated $3.60 to $3.90 this year, Mr. McCoubrey said.

That makes the stock's valuation look attractive, particularly after last week's sell-off. Applying a $4.30 ACFFO estimate for 2018 to Enbridge's current share price of $46.95, "that's like a 9-per-cent free cash flow yield on a pipeline company," he said. "Even if they're growing at anything above 5 per cent, that's such a better value proposition than we would see within our other utility names we cover."

So why didn't Enbridge reiterate its dividend guidance?

"That's a good question," Mr. McCoubrey said. "I suspect that they're still grappling with the decision of which is more important to their value proposition right now. Is it trying to appease concerns around heightened financial risk that's being highlighted by Moody's, or is it to keep the story intact that they are the premier dividend growth name for Canadian investors?"

Virtually everyone agrees Enbridge's dividend will continue to grow. By how much? We'll soon find out.

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