April 30, 2018

On Monday, the S&P 500 was down 0.8% and Toronto was down 0.4%.

Berkshire Hathaway was down 1.8% to $193.73 and might be worth nibbling on in advance of its Q1 earnings to be released on Friday which will be followed by its famous annual meeting on Saturday.

Toll Brothers was down 3.1%. Presumably investors are worried about the impact of higher interest rates. But to my understanding, houses remain very affordable in most of the U.S. and I think Toll Brothers will continue to grow its earnings.

Couche-Tard was down 2.1%. This company completed its 2018 fiscal year today and so we won’t see any earnings report until around July 12 (based on last year’s schedule). So, there may be little reason for the stock to do much until then unless it announces a major acquisition – which is always possible. I continue to think the stock offers good value.

I did buy a few CN shares today as I mentioned I would in yesterday’s post. ANd I placed an order to add to that if it happens to drop to $95.

West Texas oil at $68.55 continues to be a LOT higher than last year. But it seems to have little impact in supporting the Alberta based stocks on our list. Of course, most Alberta oil is sold at discounted price due to transport costs and lack of transport capacity. Still, the pessimism about the Alberta stocks seems overdone.

Regarding Trans Mountain, it seems clear that Kinder Morgan Canada is not going to proceed if it faces a risky outcome of the new BC court challenge which will take many months or a couple years to resolve. I think the Federal government needs to declare the project in the national interest and to basically indemnify the company against the financial impact of any further actions by B.C. Otherwise, Kinder Morgan seems likely to halt the project indefinitely, if not abandon it. Meanwhile, news of $1.60 gasoline prices in B.C. plays well in Alberta, (and $2.00 would be absolutely cheered) and that is a sad state of affairs.

 

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