Atco Ltd (ACO.X.TO)

This company has not managed to grow its business outside of Canada. It is predominantly a business that runs in Alberta, so a bit of a bad postal code right now. There are better businesses if you want to play a rebound in Alberta. If you own, consider switching into Fortis (FTS-T) or Emera (EMA-T).

Still has a lot of growth in the industry. Last quarter they spent a lot to finance that growth so we need to see their next quarter. This is a good entry point.

Sees utility growth continuing. Sees 2013-15 as 10.4% growth rate compounded. Likes the name.

A regulated utility so he feels capital appreciation potential is somewhat limited, especially in his view of where he thinks interest rates are gradually going to increase in North America. Would rather have some merchant power exposure. Likes Capital Power (CPX-T) a little bit better and where you get better dividend growth.

A very interesting company. As activity picks up, particularly out West, this is going to be good for them. They service a lot of industries, not just oil and gas, but forestry and so on. Company has been run very well over the years. Always looks a little expensive, but for people who have held onto it for a long period of time, they have done very well. On a valuation basis, he would not be jumping in today.

He believes there is a bubble in utilities. You are getting very marginal growth, if at all and paying 17 time earnings. They reported they underperformed their numbers. This is a safety stock and people are using it for safety, so it won’t affect this stock much right now. He doesn’t like utilities and pipelines.

(Market Call Minute.) He owns Canadian Utilities (CU-T) but this is actually cheaper.

Owns Canadian Utilities (CU-T) and some service assets out west. As interest rates went up a little bit, all the utilities got hit and this one went down with it. Very cheap stock. At some point, people will be in favour again for utilities. Prefers owning Canadian Utilities as it is a little more liquid and pays a higher dividend.

This is effectively a utility and benefited tremendously from the safety trade with bonds coming down from 4.5% to 1.5% 5 years ago. Stock recently dropped because of a rebalancing of portfolios. Expects we will only see higher interest rates for many years and this does not speak well for this company.

Sold his holdings a few months ago as he had thought it had become fairly valued. If you own, it never hurts to take a profit. This company is doing very well with the build out in the mining and oil/gas sectors.

Chart shows a long upward trend from early 2010. Had a little bit of a spike on news of a share split. You can probably see it come back and test the $85 range. Boring name, but profitable.

(Market Call Minute.) Problem is that it owns Canadian Utilities (CU-T) which is trading up at a 30 year valuation high, very expensive and he wouldn’t hold either one.

Fabulous company. Very illiquid. Will benefit from growing sales to the oil sands. Nothing bad to say.