Stocks you won't touch

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Re: Stocks you won't touch

Postby Curmudgeon » 06 Mar 2012 08:44

Sensei wrote:... especially the comment about Quebec (the province) by Curmudgeon. Good reply by Quebec (the person) by the way.

For me, it's personal. I'm one of the 800,000 or so English-speaking refugees who were forced to leave Quebec with my young family in the early 1970's, along with plenty of good companies like BMO and SLF. As a result, I'm one of a growing group of Canadians who feel that Quebec should have separated long ago and hope they will soon. Investing in Quebec is like betting against myself. Of course I realize that in the event of separation companies like CNR would would still operate, but what would the uncertainty do to revenues and stock prices? I'm not missing any opportunities because there are plenty of alternatives. I avoid Quebec provincial and corporate bonds too. The province feels more foreign to me than the U.S. does.

I didn't elaborate earlier because my reasons are off-topic for this forum.
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Re: Stocks you won't touch

Postby newguy » 06 Mar 2012 09:53

Curmudgeon wrote:In general, I avoid any dual class non-voting stock. I also avoid any company based in Quebec.

I dunno, they used to get lots of corporate welfare - that can't hurt. I don't like to invest in funds that invest only in Quebec like Fonds de solidarité FTQ.

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Re: Stocks you won't touch

Postby Quebec » 06 Mar 2012 10:06

OK then, back to the topic of the thread. Most of my equity portfolio consists of broad ETFs (Canada, US, EAFE, EM), but when selecting Canadian and US stocks I apply a “dividend growth” strategy. So I want to see raising dividends (by at least 5% a year CAGR over 5 and 10 years, preferably more than 10%); I want to see EPS growth that matches the dividend growth, I want to see rising revenues to support the earnings, I want to see reasonable debt:equity ratios, and reasonable payout ratios (below 50% for most companies). If the company lost money (negative EPS) in even a single year (over the last 10) I avoid it. If dividends have been cut, I avoid. If there is a big merger coming up, or the company wants to split in two companies, I avoid buying this stock. I use to look at S&P “quality ratings” too when I had free access to their reports, but you can sort of guess roughly what this ranking would be by looking at the criteria I’ve just mentioned. The stocks I am looking for tend to be in the financial, utility (including pipelines), consumer staples, healthcare and industrial sectors. I avoid thinly traded stocks, small caps, and high-yield.

I avoid strongly cyclical sectors like mining and energy: I don’t even look for individual stocks in these sectors, since I am not expecting to find any stocks that fit my criteria – and if they did now, they probably won’t anymore in 10 years. Plus I am exposed to these sectors already through XIU. I’ve stayed away from consumer discretionary and technology so far, because of the cyclical reputation of these sectors as a whole, but may need to look harder at individual companies within these sectors. Buffet bought some IBM recently (acknowledging he was late to the party)…
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Re: Stocks you won't touch

Postby Quebec » 06 Mar 2012 10:31

newguy wrote: I don't like to invest in funds that invest only in Quebec like Fonds de solidarité FTQ.
The main problem I see with this fund is that their main goal is to create jobs, not to make money. That can lead to investments in businesses that would have disappeared otherwise, and probably will end up dying slowly anyway. The results have been OK, but my understanding is that people mostly buy such funds in their RRSPs a few years before retirement, essentially to get the special tax refund.

Along the same lines of thinking, I avoid “ethical funds”. The ones I’ve looked at in Canada tended to have about 50% financials in them, which is way too much. I give 1% of my pre-tax income to charities every year (and I will leave charities a portion of my estate), I intend to do volunteer work when I have more free time, I take public transit to work, etc.: that’s how I intend to do my little bit to “save the world”. As far as investing goes, I am a nearly pure capitalist. Walmart destroys local businesses: possibly true, but if I can shop there (and I do, cause prices are low and I typically find what I need) I can buy their shares as well. My limit would be a company that only makes bombs, that’s a bit too much.
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Re: Stocks you won't touch

Postby Taggart » 06 Mar 2012 11:24

Sensei wrote:
As far as retail goes, I sold out of two clothing retailers RET and CTU in 2011. I don't feel there is as much a moat left, if there ever was one, especially with Target moving in.


I make it a point of not trying to make future predictions of competitive pressures on a company. I wait for the company to tell me, either in their financial statements or a cut in the dividend. I lucked out and got out of CTU "before" the dividend cut. If I start predicting, then I would never have had the guts to buy the Telecom stocks a couple of years ago, nor Consumer Staples grocers like Empire or Metro. Too many negative comments around at that time. As for Reitmans, looking forward to seeing their annual report for 2011.
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Re: Stocks you won't touch

Postby Soils4Peace » 07 Mar 2012 04:31

Won't touch SNC, given our own company's attitude to corruption. We forego certain "opportunities."

Won't touch companies that have never made money unless they are on the verge with geometric sales increases.
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Re: Stocks you won't touch

Postby flywaysuzy » 07 Mar 2012 09:51

I picked up some SNC after the plunge-what can I say? At least they aren't an airline...
Also have National Bank-what a nice stock. Would never occur to me to avoid an entire province's companies.
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Re: Stocks you won't touch

Postby kcowan » 07 Mar 2012 17:02

flywaysuzy wrote:Would never occur to me to avoid an entire province's companies.
Me neither. I guess there is separatism at work in the finance industry. I will take my extra basis points on Quebec Hydro bonds (and avoid the old Ontario Hydro entirely)!
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Re: Stocks you won't touch

Postby flywaysuzy » 07 Mar 2012 21:22

But I totally get the idea of a major mad-on for a single company and avoiding them no matter what. Mine is for the Bay. I had a nightmarish experience in one of their stores when I was on crutches last year. Will never go in a Bay again and would never consider the stock either. (and not just because of Target coming in :twisted: )
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Re: Stocks you won't touch

Postby Quebec » 08 Mar 2012 10:29

Quebec wrote: Well I hate Bell...
Bell called me twice since the new year, basically to offer me to lower my phone-internet-TV bill (they did not phrase it that way, but this was obviously one of the goals of their call). The first time, in January, I got discounts on Satellite TV ($20 off a month for 1 year!), and on the landline ($12 off a month for one year). This week I got rebates on the internet service ($5 off a month for one year). On both occasions the reps were quite friendly; they did try to push new products (faster internet, etc.) but only softly, they did not insist strongly as they would have done in the past. So I am now paying $37 less per month in total for the same service. As a customer, I am pleasantly surprised by this change in attitude (but I still hate Bell due to innumerable bad experiences). As a former investor who gave up when the stock was doing nothing for years, but is always looking at potential additions to my portfolio, I am asking myself, (1) is this change of attitude towards the clients (i.e. not taking them for granted anymore) generalized or I am just lucky?; (2) is voluntarily lowering client’s bills really a good idea for Bell’s revenues and bottom line?
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Re: Stocks you won't touch

Postby northbeach » 08 Mar 2012 12:05

I have noticed Bell's service improve over past two years. I think you will have to phone them yearly to continue discounts. Meantime there will be yearly increases before the discounts are reapplied.
I have owned BCE for the past two years.
I will not buy stocks like Ballard. I actually still hold 100 shares I purchased at 50 and 100 dollars years ago.
At the time I was buying Ballard, I kept thinking about Apple. Never did buy Apple.
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Re: Stocks you won't touch

Postby kcowan » 08 Mar 2012 16:56

northbeach wrote:At the time I was buying Ballard, I kept thinking about Apple. Never did buy Apple.
being in BC, I would never buy Ballard. There is something about Executives sucking on the government teat that make them evasive when asked about business cases for their products...their CEO was slick/slippery.
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