Just because bond yields and interest rates are rising doesn’t mean stocks can’t do well in that environment. But it’s the type of stocks investors need to know to stick with or buy, and which ones to reduce or eliminate exposure to in order to protect investment returns. Here are some research hi-lights and illustrative charts detailing why investors should overweight these kinds of equities over the next 12 months.
Surging bond yields are something investors have rarely seen the last three decades or so. But they’ve been on full display recently, which has sent stocks generally lower and prompted debate about what it all means. Are bond yields returning to more normal levels after years of extraordinary stimulus from central banks and governments? Are they indicating investors see a stronger economy ahead post-pandemic, and reflecting the potential for higher prices? And/or could bond investors be signalling their concern the Federal Reserve will not be able to control inflation if the economy runs hotter than expected? We’ve got some answers.
Bond yields are surging and making headlines in the financial media. But these stories are merely catching up to the work done by the strategy team at BCA Research, which has been doing deep dives for months into the possibility of inflation. These are hi-lights of a research report by Arthur Budaghyan, Chief Emerging Markets Strategist, who concludes that after nearly 25 years of stocks and bonds generally performing in unison, we’re now seeing a paradigm shift, and the result will be higher inflation over the next one-to-three years.
Many try. Most fail. Those are just the facts when it comes to entrepreneurs who attempt to build a sustainable, successful company. The ones who do achieve success are usually generous with their advice for risk takers who are on similar journeys. Omri Brill has learned a lot since starting Adcore in 2006 as a boutique advertising technology company. It’s now worth more than $150 million after the stock surged more than 470 per cent since early December. That’s as investors begin to recognize what Brill and his team have built. Here are three keys to entrepreneurial success that Brill has learned thorough his achievements and setbacks.
Chris Mayer has read (nearly) every investment book that’s ever been written, famous and obscure. We’re sure there’s the odd investment book Mayer has not read, but you’d be hard pressed to find it. That’s why the co-founder and Portfolio Manager of Woodlock House Family Capital, and author of 100-Baggers, is a great resource to recommend three books investors ought to read, if they haven’t already, to enhance their investment knowledge.
Uncommon Sense Investor visitors continue to discover this article from deep in our archive. So, like a vintage song, we’re reposting it to our front page: Unless you’re a trader, the advice to investors from portfolio managers worth their salt is to own well-managed, dependable, market-leading companies that people touch every day, and to own them for the long haul. So what do you want to own from now until at least 2025? We ask because RBC Capital Markets Global Equity Research team has put together an exhaustive report entitled Imagine 2025: Themes, Opportunities and the “Law of Accelerating Returns”. We’ve plucked some key commentary, a list of 70 stocks from seven sectors, a sub-list of 10 stocks, and a few intriguing charts.
In early November, we posted an article entitled Is Air Canada’s Stock Ready for Takeoff? Turns out the answer was an emphatic yes as the shares surged soon after by about 37 per cent on the back of news vaccines were coming. The airline’s stock consolidated those gains and recently the shares have been jumping again largely on the concept that customers will flock back to air travel once the majority of people have been vaccinated against COVID-19. Here are the reasons TD Securities believes Air Canada’s transformative change post-financial crisis has left it flush with cash and poised to thrive post-pandemic.
A company eliminating a special dividend and contemplating cutting the regular dividend must be in trouble. But in the case of Constellation Software, it’s part of a bold plan by the perennially high-growth company to go after larger acquisitions, absorb slightly lower returns on investors’ capital, but also free up cash to invest back into the business instead of it going to shareholders. Chris Mayer, Founder & Portfolio Manager of Woodlock House Family Capital, and a shareholders of Constellation’s stock, loves this counterintuitive move by the company and explains why.
We’re always on the lookout for CEOs who may engage in the odd flight of hyperbole. But our gut tells us that the founder and CEO of Adcore is the real deal. Put on our radar by Jason Donville and Jesse Gamble, who own the stock at Donville Kent Asset Management, and see strong repeatable growth ahead, Omri Brill’s passion for his baby shines through. He started this digital advertising company 15 years ago, went public in 2019, just received conditional approval to graduate to the TSX, and Adcore is just now being discovered by investors, which have sent the stock higher by more than 470 per cent in the last few months. Brill outlines what makes Adcore different and why the best is yet to come.
Could the inflation shock of the 1970s happen again? In a word, yes. But to see how that’s possible it’s important to understand why prices actually surged during that decade. Turns out many of the causes had their roots in U.S. government policy mistakes of the mid-1960s. Peter Berezin, Chief Global Strategist at BCA Research, identifies nine myths and facts about inflation in the 1970s (we present the first three), hi-lights some of the eerie similarities to today, and tells the story with some excellent charts.
Investors previously content to set it and forget it in an S&P 500 index fund are now aggressively speculating in individual stocks more than they have in about 13 years. This is resulting in an exuberance and investor confidence not seen in decades, according to Bloomberg.
Inflation is supposedly benign. The massive amounts of fiscal and monetary policy stimulus unleashed due to the pandemic have not resulted in higher prices. That’s what the Consumer Price Index (CPI) numbers showed from StatsCan, which had January consumer prices rising just 1% year-over-year, and 1.3% if you strip out gasoline. But a quick look at the widely-followed Thomson Reuters Core Commodity CRB Index shows a rapid and steady move higher since bottoming in March of last year. Inflation is back and investors need to protect their investments, according to Daniel Lacalle, a phD Economist and Fund Manager.
Telemedicine is one of the hottest growth sectors right now. It’s estimated the use of healthcare over the internet has been pulled forward by about five years as a result of the pandemic. MindBeacon Holdings is a newly-public company that specializes in internet-based mental health therapy. We’ll be interviewing the Chairman & CEO next week. The firm has an impressive executive group, and large customers including RBC, Sun life and the Ontario Government. What’s potentially exciting for investors is that MindBeacon’s growth is expected to remain robust for the next several years. Here are hi-lights of a report on the company from TD Securities.
Ahead of our interview this week with Omri Brill, founder & CEO of Adcore (TSXV:ADCO), we present this research report on the company from Keystone Financial. Editor Ryan Irvine and Senior Analyst Aaron Dunn, started coverage of the advertising technology company about a year ago with a “speculative buy” rating. The stock is up 175 per cent since then. Brill started Adcore in Tel Aviv in 2006, and has grown it into a $100 million plus business with offices in various parts of the world, including Toronto. Adcore competes in the fast-growing digital advertising market. Get a good primer before you watch our conversation with Brill, later this week.
Delivering a nearly 18 per cent average annual return to their clients over the last 13 years hasn’t happened by luck for Jason Donville and Jesse Gamble. For one, the President & CEO, and Senior VP & Portfolio Manager, respectively, of Donville Kent Asset Management, have a plan, a framework that they believe in and stick to. That includes knowing the type of investors they are. There are also certain types of companies that fit Donville and Gamble’s criteria, and most firms they look at don’t fit under their rarefied umbrella. Here’s some professional advice, three investing principles to help investors with their approach to picking winning stocks.
Those Battlin’ Brookfields have their hands full these days. Brookfield Infrastructure has made a hostile $13.5 billion offer to Inter Pipeline, which is playing coy for now. And Brookfield Property Partners is weighing a bid from its parent company, Brookfield Asset Management (BAM), to take it private. While John O’Connell sings BAM’s praises and owns the stock, here’s why he believes Brookfield Property Partners unitholders should reject the offer.
Office life will never be the same after the pandemic. Or will it? There’s been much discussion about the future of offices and whether they’ll ever be utilized as they were before COVID-19 forced millions to work from home. Some argue a hybrid system will reign with workers splitting their week at home and at the office. Others say people, especially younger ones, desire a social office environment and all the amenities of urban living. Here’s John O’Connell’s measured take on the future of office real estate investment trusts.
You’ll recall we interviewed Horst Hueniken a few months ago. One of the top ideas of the President, CIO & Portfolio Manager of Hueniken Asset Management, was Legend Power Systems (TSXV:LPS). It’s a name I was familiar with having interviewed the CEO a few years ago. The stock is up more than 70 per cent since we talked to Hueniken. He provides an update on the Legend Power Systems story and explains why the shares could more than double from here.
The easiest way to answer the question in the headline is to say that it depends on what type of investor you are. Do you like to take some profit when your stocks are hitting new highs or do you have the stomach to absorb some volatility over the longer-term to wait for bigger, compounded gains down the road? In effect, do you protect your short-term gains or your long-term gains? Here’s some thought-provoking context and perspective on that vexing question from Felix Narhi, Chief Investment Officer & Portfolio Manager at PenderFund Capital Management.
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John O’Connell fielded a number of questions from viewers during our recent Uncommon Sense Investor live MoneyShow presentation – 10 Profitable Investing Rules for All Market Conditions. One of the questions was whether technology stocks were in a bubble. John explains why certain technology stocks are trading at unreasonable valuations, and why the heavyweights are not overvalued for several different reasons.
We continue our conversation with Jason Donville and Jesse Gamble, President & CEO, and Senior VP & Portfolio Manager, respectively, of Donville Kent Asset Managment. In this segment, Donville and Gamble detail why they have high conviction about the prospects of these three Canadian technology companies, and how they all have that magical formula of high returns on equity and high profit margins.
Stock market peaks usually coincide with excessive levels of debt. More specifically, they happen at the same time investors are using record amounts of margin to place their bets. Jesse Felder, Founder, Editor & Publisher of The Felder Report, and former hedge fund manager, comments on this speculation and backs up his views with some telling charts.
John O’Connell and I really enjoyed our MoneyShow live webinar. We started with the Davis Rea Investment Counsel Chairman & CEO’s take on the GameStop phenomenon, and the implications for the broader market. Then we delved into John’s 10 Profitable Rules of Investing for All Market Conditions. These are philosophies, strategies, techniques, and mental approaches he has developed over his more than 35 years managing people’s financial futures. We received some thoughtful questions from our viewers, which John adeptly answered. And, Davis Rea Investment Counsel is offering a free, no strings, second opinion consultation on your portfolio. Check that out at 45:45, or email email@example.com You can also sign up for our free Uncommon Sense Investor newsletter: www.uncommonsenseinvestor.com/sign-up/
These top stock ideas from Chris Mayer have several similarities. The main one is that they all have large insider ownership by the founders and/or families of the companies. They all have long histories. They are all seemingly old economy type firms but effectively use technology. They’re large caps. They’re not household names. And they all have been consistently churning out gains for shareholders for many years. These three stocks are presented in our interview by Mayer, the co-founder and Portfolio Manager of Woodlock House Family Capital, and author of 100-Baggers.