Author: padlock

There is no question that US technology stocks have been the market leaders over the last 12 months. Two of those technology stocks, Alphabet and Apple, have certainly been big contributors to the returns of Padlock’s portfolios and two others, Facebook and Microsoft, have been on the Padlock watch list for a few months. The one year charts of those four stocks clearly show their strength in the past year until the declines that started last Friday. Alphabet (GOOGL-NASDAQ, $967.93) Apple (AAPL-NASDAQ, $145.15) Facebook (FB-NASDAQ, $150.25) Microsoft (MSFT-NASDAQ, $70.26) Charts courtesy of PC Quote and E-Signal The question is though whether or not these stocks are partying like it was 1999 and we all know what happened in 2000. Four “blue chip” technology companies that were among the market leaders in 1999 were Cisco, Intel, Microsoft and Texas Instruments. Their 20 year charts show a few years of very strong performance that ended in early 2000 followed by years and years of declining...

The Hill is an American political journalism newspaper and website published in Washington, D.C. since 1994.  It is published by Capitol Hill Publishing, which is owned by News Communications, Inc.  Focusing on politics, policy, business and international relations, The Hill is read by the White House and more lawmakers than any other site. A recent issue had an in depth look at the global semiconductor industry.  It is an interesting view at how the industry has changed and what the future may hold for technology consumers and investors.  Some readers may recognize that the author who happens to be my son-in-law.  Joel is an institutional equity trader focusing on Technology, Media and Telecommunications (TMT) in the Toronto office of Los Angeles based Wedbush Securities. I hope that you enjoy the article.   Semiconductor rally has room to run in 2017 BY JOEL M. KULINA, CONTRIBUTOR - 12/29/16 12:20 PM EST 1 © Getty Images As our lives become more and more connected to our devices, the...

For investors, 2016 is a year that can certainly be described as “unprecedented” (apologies to the other Donald for using one of his favourite words), “surprising” and “rewarding”. Strong moves in stocks came from unusual places and at unusual times. Investors have been rewarded with year to date (Dec. 20th) total returns of 20.9% for the S&P/TSX and 13.5% for the S&P 500. As with all years, some stocks rise more than the index and other rise less or even fall during a strong year. The trick is always to have more of the former and less of the later. The Padlock Scorecard for the stocks making up Padlock’s Model Portfolio is shown below. The returns are year to date total returns for stocks held at the end of 2015 and the year to date total returns from the time of purchase for stocks added during 2016: Padlock 2016 Scorecard Canadian Stocks  ...

In last quarter’s commentary, I wrote about the notion that 2015 was the most confusing year that I and many other investment professionals had experienced in their careers. On the surface, the first quarter of 2016 did very little to alleviate that confusion. Markets appeared to be disconnected from the fundamentals in the first six weeks of the quarter and very sharp declines ensued before an equally sharp recovery in the last weeks of the quarter brought equity markets essentially back to or slightly ahead of the year end levels. Fortunately, the capital in your portfolio was preserved with a positive return that was slightly ahead of an essentially flat benchmark. Stepping back with detachment from the “fear” of those first six weeks, it would appear that this disconnect from the fundamentals was largely driven by those investors with exaggerated exposure to energy commodities and in particular the Sovereign Wealth Funds...

Following Don Lato’s appearance on Market Call Tonight last night the following was published in the Report on Business Online Edition: http://www.theglobeandmail.com/globe-investor/investment-ideas/three-top-stock-picks-from-padlocks-don-lato/article28423621/ BNN MARKET CALL Three top stock picks from Padlock’s Don Lato Special to The Globe and Mail Published Thursday, Jan. 28, 2016 11:09AM EST Last updated Thursday, Jan. 28, 2016 11:09AM EST Don Lato is president of Padlock Investment Management. His focus is North American equities. Top Picks: Apple (AAPL.O) Latest purchase in early January at $98.56. Apple continues to be the largest holding in Padlock’s portfolios and was a Top Pick in my last BNN Market Call appearance in October. The stock has struggled since then, and last night’s earnings release won’t change that in the short term. One of the key points in the release was the service revenue within the Apple ecosystem that grew at 24 per cent year-over-year but seems to generate little value for the shareholder at this point. With cash of $39 (U.S.)...

It has obviously been a difficult start to the year but I have come across an article that does an excellent job of allaying some of the fears that we all have while advocating patience and common sense.  The article was written by Ben Carlson of Ritholtz Wealth Management on their website A Wealth of Common Sense.  I couldn’t have said it any better than this article did and so rather than re-invent the wheel, here’s the article: http://awealthofcommonsense.com/stock-market-sell-offs-without-a-recession/ Stock Market Sell-Offs Without a Recession Posted on January 17, 2016 The stock market is a forward looking indicator. Markets are meant to discount future cash flows and events to a present value. It’s not always right — stocks have predicted four out of the last eight recessions and so on —  but investors are constantly looking for signals in stock prices to shape their current outlook. In a swift drop like we’ve seen in the recent...

North American equity markets posted negative nominal returns in 2015 with S&P/TSX Index dropping 11.1% and the S&P 500 Index declining 0.7% (it was slightly positive on a total return basis). In managing a portfolio, it is always interesting to look back and see where the absolute and relative returns evolved from during the year.  The following scorecard shows the nominal returns(not including dividends) for the holdings that form the basis of Padlock’s North American Growth portfolios and which significantly outperformed the two indices above that make up its benchmark: 2015 Padlock Scorecard 2015 Return New Flyer 110.0% CCL Industries "B" 78.3% Alphabet 46.6% Alphabet "C" 44.2% Parex Resources 38.0% Dollarama 34.6% Jarden 19.3% Visa 18.3% Sleep Country Canada* 14.1% Walgreen Boots Alliance 11.8% Gilead Sciences 7.4% Sun Life* 5.9% Rogers Comm. “B” 5.6% Tricon Capital 3.9% S&P 500 Index -0.7% Toronto Dominion -2.3% Equitable Group* -2.6% Apple -5.0% S&P/TSX Index -11.1% Corning* -12.2% Cdn Natural Resources -15.9% NCR -16.1% Peyto Exploration -25.7% Paccar -30.3% Kohlberg Kravis Roberts -32.8% Performance Sports Group -36.9% Tourmaline Oil -42.2% Canyon Services Group -54.7% Hi Crush Partners -80.9% Returns are in the currency of the holding. Holdings introduced to the portfolio in 2015 with returns since purchase * It should be no surprise that the majority of the holdings at...

As the end of the year approaches, I just wanted to thank you for taking the time to read the various issues of The Lato Letter that you received during the year. I would especially like to thank my clients for their continued loyalty and support in a difficult but yet rewarding year. I have the best clients possible and look forward to continuing our relationship in 2016 and beyond. Padlock’s office will be closed from December 24th to January 4th. I will be checking emails during that period but should you need to reach me on an urgent matter, please call my cell. Best wishes for a wonderful holiday season and a healthy, happy and prosperous 2016. This information, including any opinion, is based on various sources believed to be reliable, but its accuracy cannot be guaranteed and is subject to change without notice. To receive The Lato Letter by email from now on,...

As we approach the end of 2015, it is not too early to start thinking about tax planning for 2016. Padlock’s auditing firm, Segal LLP, recently published an excellent piece on some of the tax changes coming in 2016 and what you may want to do about them before the end of this year and into next year. With the permission of Dan Natale, the Segal partner responsible for Padlock, the entire article is included below. Padlock has been very pleased with the service and advice provided by Dan and his team at Segal and so if you are in need of their expertise, let me know and I will make the introduction. Enjoy the article. Act Fast to Head Off Potential Tax Changes in 2016 With the end of the year in sight, and tax changes expected from the new federal government leadership, tax planning may be more important than it's been...

To say that the last few sessions in the equity market have been unnerving is as big an understatement as saying the Blue Jays scored a few runs this weekend (for those who don’t follow the Jays, they set a franchise record this weekend for runs scored in a three game series). The financial and mainstream press has inundated us with commentaries, predominantly on the negative side, about the equity market action over the past few days. There have also been a number of commentaries urging investors to stay the course and to avoid joining the panic. As you know from reading previous issues of The Lato Letter, Padlock has remained constructive on the equity markets for the balance of the year and into next year. We remain committed to that view and suggest that the current market turmoil should not be the beginning of lengthy declining market but rather a somewhat...

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