Category: Equity Investing

General Electric – Selling Shares as Part of My RRSP Meltdown Strategy

Summary

  • GE released Q3 result on October 20th which fell far short of expectations.
  • The new Chairman and CEO and his senior leadership team are undertaking a rigorous analysis of all areas of the business in order to make major an urgent changes.
  • GE’s new cash flow from operating activities projection is $7B, a steep drop from the company’s previous view of $12B-$14B.
  • The ability to service the existing dividend, pensions, and capital investments is in jeopardy. GE has previously cut its dividend and another dividend cut is not beyond the total realm of possibility.
  • I am selling our GE shares as part of our Registered Retirement Savings Plan meltdown strategy.

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Genuine Parts Company Stock Analysis – View the Pullback as a Buying Opportunity

Summary

  • GPC released Q3 results below expectations on October 19 which has resulted in a ~8.5% drop in stock price.
  • Two additional bolt-on acquisitions were announced October 19 with closings to occur November 1. No definitive closing date has been revealed regarding the acquisition of Europe’s Alliance Automotive Group.
  • GPC, established 1928, has previously successfully navigated challenging competitive conditions. Management is taking steps to expedite corrective action.
  • Industry dynamics presents an opportunity in that GPC is likely to be a consolidator of smaller competitors.
  • Amazon’s expansion into GPC’s automotive parts segment will appeal to the DIY/consumer market (25% of GPC’s business in that segment). Amazon is unlikely to be able to adequately service the commercial segment.

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Canadian Pacific Railway Stock Analysis – More Upside Potential

Summary

  • Canadian Pacific released its Q3 results on October 17. Despite the ~5% stock price increase subsequent to the earnings announcement, CP remains an attractive long-term investment.
  • Adjusted diluted EPS grew 6% to $2.90. CP has revised adjusted diluted EPS upwards to double-digit growth versus high single-digit growth from full year 2016 adjusted diluted EPS of $10.29.
  • Free Cash Flow for the 9 months of FY2016 and FY2017 amounted to $0.488B and $0.575B.
  • CP has recently expanded its geographic coverage through a new partnership with Genesee & Wyoming Inc.
  • CP has various expansion projects in the works and technological enhancements being implemented to improve efficiency levels.

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Constellation Brands Stock Analysis – I Like the Company But Not the Valuation

Summary

  • This Constellation Brands Stock Analysis is based on Q2 2018 results released October 5, 2017.
  • Constellation Brands has certainly rewarded long-time shareholders.
  • As an investor who currently has no position in the company I view the current valuation to be too rich to initiate a position.
  • The company released its Q2 2018 results at the beginning of October 2017. FCF projections and the current number of shares outstanding suggest the Share Price/FCF ratio is well above historical levels.
  • We are several years into a bull market. I suspect many investors have never experienced a dramatic market correction subsequent to becoming a self-directed investor.
  • Complacency appears to be the mindset of many an investor. I suspect geopolitical risks of the like we have not experienced in many years are being taken lightly.

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I Applaud J.P. Morgan Analyst For Downgrading 3M

Summary

  • JP Morgan’s analyst downgraded 3M to “Sell’ In September 2017. Some investors voiced their displeasure on blogs and message boards.
  • In a January 2017 post I indicated I thought MMM was expensive. The price has just ratcheted up subsequent to that post.
  • I am cautiously optimistic JP Morgan’s analyst’s call will be correct and the stock price will drop.

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Stelco’s Impending Initial Public Offering – Avoid It at All Costs

When I originally thought of creating this blog and forming the Financial Freedom is a Journey Community, my intent was to provide a forum in which a community of people could share ideas on how to become financially free.

My wife and I became financially free several years ago. I can assure you that once you become financially free it is a whole lot easier to cope with less than pleasant things that are bound to surface at some stage of your life.

We became financially free by doing several things right. Two of those “things” were to:

  1. invest in wonderful companies and let them do the heavy lifting for you;
  2. avoid fair companies regardless of valuation as the likelihood is they will just part you from your money.

In today’s post I want to share with you something that will help you with point #2 reflected above. This post is particularly pertinent to Canadian residents. Continue reading “Stelco’s Impending Initial Public Offering – Avoid It at All Costs”

Brookfield Asset Management – Calling All Long Term Investors

Summary

  • Brookfield Asset Management (“BAM”) is an ideal investment for investors with a long-term investment time horizon;
  • Its astute management team has developed a reputation which enables it to raise billions of dollars for investment purposes from institutional investors;
  • BAM has exposure in geographic regions where others may not venture. Limited competition for some acquisitions enables it to negotiate attractive terms;
  • BAM approaches its investments from a long-term perspective. You should approach any investment in BAM in the same manner;
  • Investors primarily seeking dividend income may wish to consider investing in 3 of BAM’s Limited Partnerships (BEP, BIP, and BPY);
  • September 27, 2017 is Brookfield’s Investor Day. Readers may wish to check BAM’s website shortly thereafter for any information presented.

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