Evertz Technologies Ltd. (ET.TO)

They make hardware essentially for use in television broadcasting. Has an inherent bias against hardware companies. His view is that hardware should trade at a huge discount to the rest of the market.

Recently released earnings which were quite good. Beat on both revenues and on earnings. Provides audiovisual software to the broadcast industries. Dividend is about 4% and this is a name he would own for that. Lots of cash on the balance sheet. Very range bound, going up about 5% and down about 5%. When it hits those peaks and troughs, that is a pretty good signal for buying and selling.

(Top Pick June 20/14, Down 6.29%) 4% dividend. They are leaders. They follow election and Olympic cycles and we have seen none of these this year. He would hold on to it. He has added in fact.

(A Top Pick June 10/14. Down 2.17%.) This company continues to do well. They are a free cash flow generator. There is good opportunity for the business.

A really good Canadian company and should really benefit from a fall in the Cdn$. They manufacture their boards in Ontario. A lot of their hardware costs are still in US$’s, so there is a bit of a pass through. This is really a play on the entertainment industry and an upgrade in technology to have better visuals, going from high definition to multicasting to probably 4K. This is probably going to be at the forefront of the movement. Have some really good products. Dividend yield of over 4%.

(Top Pick Jun. 10/14, Down 1.09%) He is out of it. Has free cash flow and pays a dividend but it does not trade enough and so it got booted out of the index.

TV technology, a leader in their space. They benefit from a strong US dollar. He expects their margins to improve and revenues to increase. Management executes very well. They are getting kicked out of dividend ETFs due to a rule change and this brought the stock down. 4% dividend. There are high barriers to entry for competitors.

Basically has 2 chunks of business. One brings signals into the broadcast studio and moves them around as well. They are also moving towards blisteringly fast routers. This is important because the industry is moving from about 10-40 gig speeds towards 100 to move massive amounts of video. Not only involved with data, but also data, voice and pictures all together. Not cheap at 20X PE against 1% earnings growth. Free cash flow positive. There are indications they are getting pretty strong pickup in their new product. This is one that you can buy and safely tuck away for about 3 years.

Do a lot of work for ESPN in their studios, such as building out studios, refreshing them in terms of the cameras, etc. Thinks their deal with ESPN is going to start to revenue over the next number of quarters. Not very liquid as people at that moment don’t want to sell it. Management has done a very good job of executing. Looking for a lot of good earnings growth over the next 12-18 months.

Decent dividends which has been raised over time. Ranks 36, top 5% of his database. 2014 earnings are expected to grow by 9% and to accelerate by 14% next year.

They do technology for broadcasters, such as multitasking, high definition globally and 4K. This will be new reasons for companies like NBC, CBS, etc. to spend. Probably one of the best companies in their space. They are also going to have leverage from a weakening Cdn$.

Their market is expanding beyond conventional TV broadcasters as over the top providers deliver content to consumers. As an example, Netflix now accounts for about a 3^rd of Internet traffic during the peak periods, and this company’s technology easily handles the explosion of the combination of voice, video and data traffic for over the top and for Web2.0. ROE is forecast to grow by 22% and earnings forecast of 76%. Cheap stock and he thinks it will surprise when they report on June 11.