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Markets Energized Canadian and U.S. equity markets have recovered from the weakness earlier in the year. The improvement in equity markets has been driven by increased confidence due in part to recovery in the price of oil. As we have become more constructive on the outlook for oil prices, we are starting to plan slowly increase our exposure to producers, with a focus on companies that are in a strong financial position with attractive growth prospects and a low cost portfolio of assets. While the recovery has taken markets from undervalued to fairly valued, we also believe risk level has come down with some stabilization in global economic growth expectations, stronger energy prices and accommodative fiscal policies. The June 23rd UK referendum and the July 18-21 U.S. Republican convention are approaching which may create some ripples in the markets. We continue to focus on companies with reasonable valuation levels, strong financial positions and sustainable dividends. Corinne Fuhr-Hughes Sr. Wealth Advisor, Director Wealth Management corinne.fuhr-hughes@ scotiawealth.com Telephone: 780.413.7454 Rene Welz Wealth Advisor rene.welz@ scotiawealth.com Telephone: 780.497.3232 Follow Rene on: Investor’s Corner This week we are pleased to announce our newly redesigned website! If you have a moment, please visit it and provide us with any feedback or comments you may have. We are delighted to share with you our bold new look and enhanced navigation experience. To start, we’ve streamed lined our menus to give you quick access to the items you’re looking for: Aaron Kehr Investment Associate Telephone: 780.413.7471 Our ‘Team menu’ showcases information on all of our team members and the unique attributes that they bring to our Wealth Management proposition. The ‘Services menu’ offers an oversight to our Wealth Management approach and details our commitment that we offer our valued clients. We are excited to share our ‘News menu’ which offers the latest insights, as well as our ‘Research & Reports’ section which shares indepth market views as well as commentary reports that are updated on a daily basis for the latest and timely information. With a few more options to enjoy and rather than telling you about them, why not take a tour now on the link provided and share your thoughts with us. http://thefuhrhughesteam.ca/your-team/ Canadian Equity Recommendations Brompton Oil Split Corp. We believe the outlook for the sector is improving and we plan to start gradually adding to the sector. To achieve diversification as we build into the energy sector, we recommend Brompton Oil Split Corp. See details below: Approximately equal-weight portfolio of at least 15 large-capitalization North American oil and gas issuers. Focus is primarily on large capitalization issuers with significant exposure to a potential rebound in oil prices. Due to the unique nature of this investment and leverage as a result of the split share structure, a thorough discussion is required. Portfolio securities are S&P/TSX Composite Index or S&P 500 Index constituents which have a market capitalization of at least $2 billion (portfolio average market capitalization is $49 billion) and pay a dividend (portfolio weighted average dividend yield is Cheryl Garth Administrative Assistant Telephone: 780.413.4349 The Fuhr-Hughes Team 2300, 10104 - 103 Ave Bell Tower Edmonton, AB, T5J 0H8 Telephone: 780.413.7454 Toll-Free: 1.888.814.4223 Fax: 780.413.7477 3.5%*) Top 10 Holdings % of Portfolio Valero Energy 8.1% Corp. Chevron Corp. 7.4% Occidental 7.1% Petroleum Corporation Pioneer Natural 7.1% Resources Co. Exxon Mobil 7.1% Corporation Suncor Energy Inc. 6.6% EOG Resources 6.5% Inc. Keyera Corp. 6.5% Canadian Natural 6.3% Resources Limited Crescent Point 6.0% Energy Corp. Total 68.7% Shaw Communications (SJR.B) – we believe the stock offers an attractive risk/reward profile and an attractive dividend yield of 5.04%*. Shaw recently closed the acquisition of WIND Mobile, shifting its operating profile to one that is more consistent with its larger Canadian peers and, based on Scotiabank GBM analysis, positioning Shaw as a growth story in the years to come. To finance the acquisition, Shaw is selling its media business to Corus Entertainment, slated to close on April 1, 2016. SJR.B trades at 14.2x earnings. NTM consensus EPS while offering an attractive dividend yield of 5.04%*. The Bloomberg consensus ratings are six buys, seven holds and one sell recommendation with a consensus target price of $26.68. Agrium (AGU) – we believe the underperformance YTD has presented an attractive opportunity to buy. We attribute the underperformance to flat commodity prices (corn, wheat, soybeans), as well as weak fertilizer demands due to excess global supply. In addition, we believe that AGU’s status as a safe-haven within the Materials sector has also contributed to the underperformance as investors use it as a source of cash in order to move back into precious and base metal stocks. Soft commodities have improved from the lows in February, increasing the likelihood that farmers will increase planted acreage from the depressed levels in 2015. Farmer economics should also be helped by lower energy prices. We also like AGU’s extensive retail network, which provides stability to AGU’s revenue and profitability compared with most of AGU’s peers that primarily operate wholesale fertilizer businesses. The retail segment now represents 77% of total revenue, which is up from less than 50% in 2007. We believe that AGU will continue to utilize free cash flow to buy back shares and also expect to see a dividend increase later this year. The stock is trading at a forward P/E of 12.7x while offering a sustainable dividend yield of 4.18%*, which we believe represents attractive value. The Bloomberg consensus ratings are 12 buys, 11 holds, and one sell recommendation with a consensus target price of C$127.63. Boardwalk (BEI.UN) – we view this company as an attractive and defensive oil proxy with current yield of 5.99% With almost 80% of this apartment REIT’s net operating income attributable to the energydependent provinces of Alberta and Saskatchewan, BEI.UN’s unit price has been under pressure since late 2014. While the units have performed well since midFebruary, we believe the outlook remains attractive. BEI.UN is trading at an approximate 10% discount to its NAV, based on Scotiabank GBM estimates, and its balance sheet is one of the most conservative in the Canadian REIT sector. (39% debt/gross book value), as is its AFFO payout ratio, which is approximately 72% based on Scotiabank GBM estimates. We view BEI.UN as an attractive alternative for a dividend focused investor with upside potential in the event of an oil price recovery. The Bloomberg consensus ratings are seven buys, four holds, and one sell recommendation with a consensus target price of C$58.05. Portfolio Updates Magna (MG): We continue to believe the strength in the auto sector may begin to wane given the length of the cycle and that the auto parts companies have seen the peak in margins and that earnings growth going forward may begin to moderate. As such, we plan to remove the last of the MG positions in the portfolios. We believe we can exit the positions at higher prices (closer to $60), as the recently improved market sentiment and stabilization in global growth forecasts may provide a near-term lift to auto sales and related industries. Walt Disney’s (DIS) “The Jungle Book” won the weekend box office by a wide margin, taking in $103.6 million in North American ticket sales and raking as the second best ever April opening. We continue to have a positive view of DIS and believe the risk/reward profile is attractive with the shares trading at a discount valuation. Hold this position. Atco Ltd. (ACO/x) – Announced the expansion of its international modular structures business by acquiring 50% ownership of Sabinco Soluciones Modulares S.A. (Sabinco) from Sitrans Servicios Integrados de Tranportes Ltda. (Sitrans), which will retain 50% ownership of the company. The transaction re-establishes ATCO’s presence in the South American market. Headquartered in Santiago, Chile, Sabinco’s fleet of nearly 2,500 space rental and workforce housing units accounts for approximately 10% of the Chilean market. Bank of Nova Scotia (BNS) – Announced the sale of Roynat Lease Finance, a division of BNS’ wholly-owned subsidiary Roynat Inc., to Meridian Credit Union Limited, Ontario’s largest credit union. The transaction is subject to regulatory approval and is expected to close in the second quarter of 2016. The transaction is immaterial to Scotiabank. Roynat Lease Finance provides customized commercial equipment leasing solutions with a specific focus on the small to mid-ticket market and had a portfolio of leases valued at approximately $910M at the end of 2015. In explaining the sale, BNS said the lease finance business was not core to Roynat’s offering. Gibson Energy Inc. (GEI) - Announced a new management structure resulting in a headcount reduction, including elimination of approximately 20% of executive level positions. General Motors (GM) reported strong first quarter results with adjusted EPS of $1.26, $0.26 better than the consensus estimate as revenue rose 4.5% to $$37.3 billion, also beating the consensus estimate of $34.55 billion. * All Dividend Yields as of April 21, 2016* Please do not hesitate to call Corinne or René if you are feeling concerned or have questions about recent market volatility or your portfolio. Regards, Corinne and René The Fuhr-Hughes Team