Steal These 3 Stock Picks From Canada’s Top Portfolio Managers

Listening in on the Equity Investment Symposium turns up a handful of excellent investment ideas.

| More on:

On February 4, the Toronto CFA Society hosted its first-ever Equity Investment Symposium, which featured six portfolio managers presenting some of their favourite investment ideas. Here are three to consider for your own portfolio.

The Bank of Nova Scotia: Poised to grow in emerging markets

Anish Chopra, head of TD Asset Management, is responsible for investing the most money of any speaker at the conference, which may help explain why he was pitching relatively large companies. Nevertheless, his ideas were certainly noteworthy.

His first idea was The Bank of Nova Scotia (TSX:BNS)(NYSE:BNS), which he likes because it will benefit from growth in emerging markets, specifically Latin America. It is also important to remember that the people from those countries are generally under-banked, and as that problem rectifies itself, Scotiabank stands to benefit.

Scotiabank also has a strong Canadian banking business that should be resilient to issues surrounding Canadian housing, and its 9.1% Tier 1 Capital ratio is strong enough to support future dividend increases.

Suncor: A strong, stable energy producer

Mr. Chopra’s second idea was Canadian energy powerhouse Suncor (TSX:SU)(NYSE:SU). The company is Canada’s largest energy producer, holding excellent assets mainly in Alberta’s oil sands, with excellent growth potential. Mr. Chopra also likes the solid balance sheet, with net debt being only 61% of cash flow from operations. That should hopefully lead to further dividend growth, which has been 21% per year over the past five years.

Suncor is also much more integrated than its peers. The company is able to refine almost all of the oil it produces, meaning that changes in heavy oil differentials are not such a risk.

Hudson’s Bay Company: Real estate makes the difference

Another speaker was Brian Huen of Red Sky Capital Management, and his idea was department store Hudson’s Bay Company (TSX:HBC). It’s a company that on the surface appears expensive, with an EV/EBITDA ratio of almost 10x. This compares to an average EV/EBITDA ratio of 6.5x for the American department stores.

But Hudson’s Bay has a couple of aces up its sleeve. The first concerns its recent purchase of American luxury retailer Saks Fifth Avenue. The potential synergies between the two retailers would bring Hudson’s Bay’s EV/EBITDA ratio down to 8.8x.

The real catalyst for Hudson’s Bay is its real estate. The past year has seen two major Canadian retailers, Loblaws (TSX:L) and Canadian Tire (TSX:CTC.A) create REITs out of their real estate holdings, to the great benefit of investors. Mr. Huen believes that if HBC does the same thing, then the shares would conceivably be worth $22, well above the current $16 share price.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

More on Investing

woman analyze data
Dividend Stocks

The Smartest Dividend Stocks to Buy With $1,000 Right Now

Do you have some cash to invest but want to earn a safe, low-risk dividend return? These dividend stocks are…

Read more »

Safety helmets and gloves hang from a rack on a mining site.
Metals and Mining Stocks

What to Know About Canadian Mining Stocks for 2025

Several factors, including global economic stability and trade policies, could play an important role in driving Canadian mining stocks in…

Read more »

An investor uses a tablet
Dividend Stocks

5 Canadian Dividend Stocks I Think Everyone Should Own

These Canadian stocks have a solid track record of dividend growth and offer compelling yields near their current market price.

Read more »

calculate and analyze stock
Dividend Stocks

This 4.4% Dividend Stock Pays Cash Every Single Month

This high-quality Canadian dividend stock offers an attractive yield and plenty of long-term growth potential.

Read more »

edit Safe pig, protect money
Dividend Stocks

3 TSX Dividend Aristocrats That Can Weather Any Economic Storm

Market volatility has investors wondering which stocks can withstand an economic storm. Here are three to consider today.

Read more »

Digital background depicting innovative technologies in (AI) artificial systems, neural interfaces and internet machine learning technologies
Tech Stocks

2 Cheap-Looking Stocks to Could Win in the AI Revolution

It's about time we gave firms like Thomson Reuters (TSX:TRI) a bit more of an AI premium.

Read more »

up arrow on wooden blocks
Stocks for Beginners

1 Under-the-Radar Canadian Stock That Could Soar From Trump’s Tariffs

Not all Canadian stocks are at risk from Trump's tariffs, and this one could be a winner.

Read more »

people relax on mountain ledge
Dividend Stocks

Top Canadian Stocks to Buy for Passive Income 

Are you building a passive income portfolio that can beat inflation and provide higher purchasing power? You could consider buying…

Read more »