Well folks, it’s been a long week of bears and bulls duking it out, but at the time of writing - the S&P 500 is back up above the key 4000 level, adding 5% to its price since Monday open. Can it continue? Many would like to think they have the answer, but positioning one’s self tactically and defensively in this market, while trading the heightened volatility is IMHO the way to go; so stay tuned for our picks next week and remember to buy our long term reco before close!
"I love what I do, and when you love what you do, you want to be the best at it."
- Shawn Carter
Long Term Investment Pick - Capture Lasting Energy Upside with Enbridge Inc. (ENB:TSX)
Act as a tactical investor in a rising interest rate and inflationary environment, real assets in the form of real estate, commodities and infrastructure are some of the best ways to hedge and safeguard capital - with equities in this space having already experienced triple-digit increases since the start of the pandemic, not only is there still room for growth but also a couple of undervalued picks that can benefit from further growth in the sector and a realization of their true value: Enbridge ($ENB:TSX) is one of these names ($ENB revenue top, earnings below).
As Q1 earnings were reported last week to a mixed consensus audience, shares took a slight 5% dive, opening up an opportunity for investors to buy this name at a discount. The silver lining was management’s reaffirmation of 2022 guidance with solid operational results and utilization with the throughput of the mainline at 3mm bpd. This pipeline company is uniquely shielded with long-life assets and new, innovative projects that are unlike those of many others in the industry. This contributes to Enbridge’s tactical, two-pronged strategy where they continue to grow their conventional business by modernizing their pipeline assets, increasing nat gas offering and accelerating their investment into export markets, but then also by expanding their low-carbon business-line growth through their renewable initiatives. This low P/E (14), high-dividend (5%) name should make its way into your portfolio as the energy allocation you’ve been looking for.
Chart of the Day: Commodities vs. Nasdaq
Welcome to an inflationary regime. After two years of incredibly strong correlation, commodities are now decoupling from Nasdaq.