BNN - Monday, May 27, 2024 - 12:00 p.m. (ET) - Segment #3

Champion Iron offers a rare solution to decarbonize the steel industry. Which represents up to 10% of global emissions. The company recently doubled production capacity at its mine in eastern Canada. It is now investing to produce one of the world's purest iron ore. Enabling green steelmaking without the use of coal. Controlling a large portfolio of high purity iron ore resources. Champion is considering strategic partnerships to further develop the region. Champion Iron. At the cse, we're always invested in public markets, in business, in growth, in you. Harvest Equal Weight Global Utilities Enhanced Income etf. The world's top utility companies in one etf, global Utilities and steady monthly income. Harvest ETFs, income happens here. -If you're looking for an investment with a strong, consistent track record, maybe it's time to look at a new approach. -Last quarter Capital Direct investors saw a return of over eight percent. That's impressive. It feels good to help Canadian homeowners accomplish their dreams. Find out why so many people have been trusting Capital Direct for over sixteen years. -If you'd like to invest along with us, visit us online or speak to your financial advisor today and ask for a copy of our offering memorandum. CapitalDi.ca Text on Screen Text on Screen Text on Screen Text on Screen Text on Screen Text on Screen . It's spring time in paris and the kings and queens of clay have come out to play Tennis played on another planet That is a piece of art right there Ooo lala! Roland garros on tsn and tsn+ >> Andrew: an email from martin. Glad to see you on "market call." you are one of my favourites. What do you think as tmx as a long-term holding? >> Yeah, so thank you for the kind remark. Tmx group is I mean they basically have a monday oply, right. And we generally like businesses that don't have much competition. The only thing would keep us on the side line there would be the fact that it is not founder-run founder-owned. So professionally managed group. And I would also say that perhaps the -- this is a long-term growth runway for the business constrained. [ audio interruption ] and I think data which is good and you have a few growth levers. So if you held it for a long time that's great. I would continue to hold. If you are looking to have it as a new position I would suggest that there is perhaps other companies out there that we would enjoy better but as far as companies go I would say this is top 5, 10% of quality primarily because of the monday police monopolistic nature of the business. >> Andrew: alex in toronto, go ahead, please. >> Caller: hi. I want to inquire about the future of a timeline for the growth of canada pacific railway. >> Andrew: cp rail. Thanks, alex. >> So cp rail is I mean similar to tmx in certain respects in that they don't have a lot of competition. Cn rail would be really their only major competitor at least in terms of moving product across rails. And you know the barrier to entry to competing with a company like this is nearly unsurmountable. The ability to stick railway tracks across a continent would either be prohibitively expensive or just incredibly difficult from all sorts of standpoints least of which would be environmental concerns and so on and so forth. Again, not a founder-run founder-owned business but they have done an excellent job at compounding shareholder wealth over the long-term. So we don't own it. We did own cn rail in the past. If you do own it you know I would expect you could probably expect us to do 10 to 15% long-term compounded which is certainly nothing to sneeze at. So strong company, very high moat around the business but something that we are not involved with at this time. >> Andrew: okay.

we have perry in toronto. Go ahead, please. >> Caller: hi. I just wanted to know about baytex it. Goes down every day. Thank you very much. >> Andrew: thank you. Open text. >> So I am not that familiar with open text but the caller said something here that I want to highlight which is that it goes down every day. Now if you have a stock that goes down every day and this is a high quality predictable sock you should be getting excited. You should be smiling. You should be rubbing your hands together because the low rate stock price the higher the forward rate of return assuming that this is a high quality predictable business where you think or can predict that the earnings will be higher next year or in five years or in ten years. I think this is something that many investors often don't quite understand. And it's something that for example when I am on bnn a number of the interviewers or guests will say to me oh, wow you are bringing stocks to us that are down. Yes, I am bringing you sale. Who doesn't like a sale. There is a great quote by warren buffett and he talks about how many in his household he will buy hamburgers every single day and when hamburgers are down in the buffett household they rejoice and sing hallelujah. When they are up they are in love. When you have a high quality predictable business producing earnings one that you can actually value when the stock price is down that is always things being equal an opportunity for to you either add to the position or enter the position and the forward rate of return of open text at $40 is higher than it was at 72. So focus on the business. Focus on the fundamentals of the business and the stock price second and if that stock price is down for a business that you like you should be excited. You shouldn't be calling me worried that it's down. You should be calling me excited that it's down or the question should be is this a high quality predictable business. It's down. What do you think I should do? >> Andrew: do you have a broad thought on open text gluers is it a stock on your radar, jay cnn. >> It is a stock that we have looked at in the space in canada we would much prefer enghouse or constellation software. And really constellation software is this clear market leader. You know we have a number of these tech companies in canada that will rely on acquisitions to drive their growth so in our view constellation software is the clear leader, open text has done a fairly good job I would stay they are sort of. [ audio interruption ] -- >> Andrew: okay. I -- I think we lost threw a bit at the end, sorry. Katie in vancouver. Go ahead, please. >> Caller: hi. Thank you for taking my call. I want to find out about constellation -- oh, no, sorry. I want to find out about taiwan semiconductor. It's in -- I want to know what the future prospect of it is. It's been going up quite a bit. And whether it is a good time to enter or maybe I missed the entry point. >> Andrew: thanks. >> So taiwan semiconductor is obviously involved in the semiconductor space and is based in taiwan. So we don't own it. We haven't really looked at it. The semiconductor space is also quite cyclical so the qualer should be aware of that. When we say it's cyclical this is a business where you know their earnings won't necessary will I be going up every single year for a very consistent or similar clip. They are at the mercy of let's say the overall economy or the macro economics but we see here, for example, with taiwan semiconductor that their return on equity has averaged between 22 and 30% over the last 15 years. That is a very strong return profile. The risk here I think would be some geopolitical risk and this is risk that is very difficult to quantify with them being based in taiwan. We all know what's -- the risk going on in that region. I know that for example berkshire hathaway had a position in taiwan semiconductor that they subsequently owned -- sold. Because they found a similarly high quality business that wasn't in an area where there was heightened geopolitical risk. So you know I -- you know. When a stock has gone parabolic. I am just looking at the chart that andy has put up here, that should usually be cause for at least a pause or to have a reassessment. At 26 times earnings they are not incredibly expensive but I would look to add to this position in the low 20s so you know 20 to 30% below where it is right now should gift investor a

Copyright protected and owned by broadcaster. Your licence is limited to private, internal, non-commercial use. All reproduction, broadcast, transmission or other use of this work is strictly prohibited.

Transcripts