RoBTV: David Burrows, Barometer Capital ManagementDavid Burrows, president, Barometer Capital Management
PATHEON (TSE:PTI): I do not think PATHEON is stock you want to look at..if it cannot rally in this market, it is bottom-fish play, not a stock that I would own
MANITOBA TELECOM (TSE:MBT): we do own it..underperforming stock, catalyst could be being acquired, there are other names, I prefer to own TELUS (NYSE:TU TSE:T) or ROGERS COMMUNICATIONS (NYSE:RG TSE:RCI.B)..ROGERS winning all the way around..getting great subscriber growth, paying down their debt
POWER CORP (TSW:POW): I like Power Corp, predictable cash flow..short-term issue is conjecture is that they may buy PUTNAM INVESTMENTS in US, expensive acquisition, $4 billion..issue is how to finance it..but I do think it is good company, comfortable owning
ROTHMANS (TSE:ROC): we do not buy tobacco stocks..having said that, group acting well..stable cash flow..always litigation risk..if we are seeing slowing economy, group would continue to do well
WESTERN UNION (NYSE:WU): relatively new spin-off as public company, trades at about 15X cash flow, relatively inexpensive compared to competitors..problem is last few months strong market, Western Union not participating..right now broad rally..which they are one of the few..if weakness in market, they are one of the first ones to get hit..better places to look
WESTJET AIRLINES (TSE:WJA): if you take a look at airlines around the world over last number of months, performing much better than market..WESTJET early in decade strong growth rate, difficulties with overcapacity but now stock doing quite nicely, earnings revisions on upside, trades at significant discount to US airlines..WESTJET would be preferred pick in Canadian market right now
CIBC (NYSE:CM TSE:CM): has had very good go, focus on retail banking and wealth management business..they would like to see fund business to some degree so I think this is good total return holding, nice dividend yield, little bit lower growth rate than past few years, good solid holding..
PAST PICK TELUS (NYSE:TU TSE:T): clearly there was expectation of TELUS going to trust, not happening..for wireless exposure, dynamic management, cash flow being generated, probably best telecom stock in Canadian market, not a bad dividend yield, now priced to be purchased, could see company taken private..
PAST PICK MERCK & COMPANY (NYSE:MRK): pharmaceuticals stocks fit in theme of large-cap growth..if you look at valuations, average large-cap growth stock trading less than half of valuation than in 2000..signficiant restructuring, new products in pipeline..they have had challenges but cheap stocks, benefit of globalization..like MERCK, also SCHERING-PLOUGH (NYSE:SGP)
CI FINANCIAL (TSE:CIX.UN): I cannot guess whether or not CI will go back to corporation or take advantage of tax holiday..there is firm trend where fee revenue in favor..CI has been knocked down, but I think it is a good business model..whether buying CI with slower asset growth or AGF (TSE:AGF.B) probably okay in both
POTASH CORPORATION (NYSE:POT TSE:POT): larger-cap, $14 billion market cap..most agricultural companies benefiting from themes out there, strong pricing in fertilizer, most analysts raising expectations in POTASH..AGRIUM INC. (NYSE:AGU TSE:AGU) similar, we own POTASH, this theme continues to be favorite of ours, we do not see trend in agriculture companies coming to an end because economy slows down..this is bigger than that..global demand will continue to fuel
COLGATE-PALMOLIVE COMPANY (NYSE:CL): a lot of these consumer stocks look extremely good..with lower inflation rate and less concern about inflation a little bit weaker economy, money looking for stable stocks..what I think you will see next year is increase in multiples..given COLGATE trading extremely well in this environment, great core holding in portfolio, I would be comfortable even buying at this level..we do not own the stock currently
SAFEWAY INC. (NYSE:SWY): interesting because over last number of months, analysts quite positive..earnings growth 12-13% range..just before Christmas they let analysts in on secret, gift-card business, called Blackhawk..significant contributor to earnings..on one hand, retail not as profitable, gift-card business worth probably $3-5 billion..there are two pieces to business..like growth profile, liquid, I would be comfortable buying
BANK OF AMERICA (NYSE:BAC) for number of reasons, we do prefer American banks to Canadian banks..we do own TORONTO-DOMINION BANK (NYSE:TD TSE:TD), BANK OF NOVA SCOTIA (NYSE:BNS TSE:BNS) and ROYAL BANK (NYSE:RY TSE:RY) but they are trading at premium valuations..Bank of America is the great model for US bank, growing nicely, lower valuation, better dividend growth..I would prefer investment banks and asset management companies..having said that, comfortable with owning Bank of America
TOP PICK FOCUS MEDIA HOLDING (NASDAQ:FMCN): had company for 3 months..I think over next 12-14 months, see significant in companies that are in video over Internet and some of the online advertising because they are picking up growth rate..FOCUS owns 74,000 LCDs screens for advertising in China..growth rate accelerating, trading at about 24X earnings..margins very high..$3.5 billion market cap, one that has accelerating growth rate, very interesting
TOP PICK CISCO SYSTEMS (NYSE:CSCO): had since September 2006..it is THE core network company..if you believe there is accelerating demand video network or smart networks for telecom service providers, CISCO is going to be key supplier..trading at 20X earnings wherein in 2000 was trading at 100X earnings, trading at half the share price with growth rate very attractive..if you are looking at way of participating next leg of telecom infrastructure and cable infrastructure, CISCO way to play..
TOP ROGERS COMMUNICATIONS (NYSE:RG TSE:RCI.B): holding that we have had and continue to hold..story about wireless, all service providers talking about increase in revenue selling additional services..picture, video, they announced good subscriber growth..winning in phone business..so it is quadruple threat of cable company..whether it is ROGERS in Canada or TIME WARNER (NYSE:TWX) or COMCAST (NASDAQ:CMCSA) in US, really has little to do with how strong economy is