Reviewing My Single Stocks

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Many of the follow stocks trade in USD and CAD I hold in CAD

Algonquin Power & Utilities Corp. (AQN) HOLD For Now

Also known as the anchor of my portfolio. 😅

Taking a quick look at it’s price movement, we are sitting at a 52 week low of $6.03 and a 52 week high of $9.28.

YTD wise we are up around 5% and in the first half of February we are up almost 10%.

Biggest issue is that we haven’t seen interest rates decline as fast as hoped in order for this stock to improve.

Next earnings report is March 7th 2025. I will likely wait until closer to then before pulling the trigger.

• My hunch is that I will continue to hold to try and recover some of my paper losses.

AQN is one of the holdings in VDY so even if I did sell I would have some exposure.

Alimentation Couche-Tard Inc. (ATD) SOLD

Even though it is by no means the same as AQN the price trend has been starting to give me bad vibes. It has consistently made slightly lower lows throughout the past year.

While the earnings call is approaching March 24th 2025 I decided not to wait and did exit my position here. Overall I was up about 12% and decided to add the proceeds straight into VDY.

Thoughts on recent management decisions:

• Their August bid on 7/11 was exciting and stirred up a lot of publicity.
• Personally I think their 22% increase in the fall on the original bid was excessive. Particularly as it meant they were essentially buying a same size (at least valuation wise) sized company.
  • Thus likely meaning high amounts of dilution and debt which based on my experience with AQN is not for me.

Shopify (SHOP) HOLD

My best performer, the stock that I started buying a soon as it went under $100 and I continued to buy it all the way down.

• Main regret is that I didn’t buy more.

Shopify just had their earnings on February 11th where they did miss EPS predictions, which caused the stock to go down pre-market but is was up 9% as of a week later. This is standard noise that we are all familiar with at this point. Other than that one metric everything is trending up nicely anywhere from 20-35%.

Their most important metric being GMV (Gross Merchandise Value) was up 25.7% year over year for Q4 which is their biggest quarter due to the christmas rush.

• CAGR of GMV is sitting at 29.2% since Q4 2019 which is fantastic growth for a company of this size.

My notes from the Earnings Call:

• Operating income surpassed $1 billion for the 2024 year
• Believes the current version of Shopify is the strongest and most durable
  • Goals set in 2023 for last year were smashed
  • Profitability levels are exactly where they want them to be
• Wins:
  • Support more variants in merchant shops
  • Increased the breadth of no code solutions in Shopify Store
  • Campaigns available to all tiers
  • UPS support
  • Partnership with Paypal brought more payment options.
  • Many new big brands have switched to Shopify stores:
    • Reebok
    • Reitmans
    • Champion
    • West Wing
    • David’s Bridal
    • And many more
  • FC Barcelona and 330 million fans now run merch store through Shopify
  • Note there are many huge sports teams such as the Toronto Maple Leafs already using the platform
  • Shop Pay use is up 50% over last year
    • nearly double the next highest
  • Expecting continued growth throughout all geographies
    • Extra attention to Europe and Japan
• Quarter Streak Stats
  • 7th in a row of 25% revenue growth or greater
  • 6th in a row of growth over 20
  • 9th in a row of positive free cash flow
  • 6th in a row of double digit free cash flow margins
• Outlook / Guidance
  • Focus is more on growth than it is on profitability
  • Merchant expected to grow more than online store
  • Q1 and Q2 are typically the weaker two quarters this will be exaggerated by 3 month trials vs the old 1 month trials.
  • No expected increase to subscription prices this year so no help there

As much as I would like to exit all of my single stocks I believe I should let this one run.

The Toronto-Dominion Bank (TD) TRIMMED -> HOLD

Near the end of January I decided to trim my TD position by about 1/5th around my break even price. At the time I thought I was likely early, but, hey this is why I held onto 4/5s. Personally I think the new leadership paired with a refocus will allow TD to continue to climb throughout the year. If I was to pick 1 single stock to hold onto it would be either TD or Shopify. Given all the uncertainties and the fact that SHOP has run so much recently I would lean towards TD.

TD’s earnings call for Q1 2025 was on February 27th or yesterday at time of writing.

• Gross Impaired Loans are still ticking up
  • Unfortunately with interest rates staying higher longer and people are starting to renew we are seeing hardships
    • This is why it is very important your mortgage is no more than 30% of your take home pay. Unfortunately ours is currently over that mark but hopefully we will be under come renewal in a few months
• Back to the numbers
  • Total Revenue came in at $15 billion much higher than $13.7 billion last year Q1
  • Provision for credit loss 1.2 billion compared to 1 billion last year
  • Net Income Adjusted came in slightly lower but almost flat compared to last year
• In terms of predictions
  • EPS was 2% higher than predicted
  • Revenue was 12% higher than predicted

A friend of mine once passed on some advice he received from his father. In Canada the worst performer of the previous year will be the best performer in the coming years and I’m going to let that theory ride as I hang onto my remaining shares.

Telus (T) HOLD for Now

I bought Telus way back in 2020 that was sold in 2021 for a down payment on our current residence. I re-added Telus as a part of my portfolio in March of 2023.

It popped a bit into April but after then it has been on a steady decline as interest rates were hiked and hiked some more. Out of the big 3 I believe Telus is in the best position currently. At time of writing Telus is up 13% year to date which is amazing. (Especially with VOO only up 2.66% on the year).

Listening to the earnings call:

• General frustration with the share price especially considering it is outperforming of national and global peers.
• Management team laser focussed on hitting targets, increasing sustainable free cash flow expansion year in and year out.
• 2025 de-leveraging and ratcheting down of discounted DRIP starting in 2026.
  • Currently Telus offers 3% discount with this being removed is another reason to toss this money into XEI / VDY.
    • There will be more information on this in May as well as the plan to return capital to shareholders starting in 2026 through 2028
• Free cash flow was lower than expected at 2 billion vs 2.1 billion
  • blamed device discounts
  • partially offset by lower expenditures
  • prediction for 2025 2.15 billion free cash flow
• Loans
  • Average term over 10 years
  • Average rate 4.37%
  • Leverage Ratio is 3.9x
    • committed to bring this to 3x in 2027
• Stated getting payout ratio down in the range of 60 to 75%.
  • On yahoo finance at time of writing it shows 232.33%

Summary

While I believe there are times where individual stocks can be picked up at a great value to propel your portfolio, over time I continue to lean more to indices and basket ETFs. A nice thing about indices is that there are likely more of them than you think. You don’t have to simply buy the total market or S&P 500.

For example, if you believe the Canadian Financial sector will out perform you can buy VDY (FTSE Index) or buy an ETF basket like BANK or HBNK.

Following up with those thoughts I expect to be out of all the stocks listed above except TD and SHOP by year end.

For the dividend growth side of my portfolio I will lean heavily on SCHD + VDY with a smaller allocation to XEI.

Index wise XAW to give me some global exposure, Nasdaq for growth, VTI or potentially switching to VOO.

Individual stock purchases in the future will likely be very small moonshots or smallish investments in undervalued companies. If I’ve learned anything from the 5 stocks above it’s that you need to be willing to hold long term if needed or cut your losses early. Yes I have heard this probably hundreds of times at this point, but, there is no better teacher than first hand experience.

That’s all for this week folks, I hope you join me back here next week as I will be diving into my remaining single stocks and my plan for their future!

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Cheers ☕