An Ernest Opinion

What I’m watching from first quarter earnings

2024-05-27T15:44:32-04:00By |Categories: An Ernest Opinion|

Beyond looking at reported macroeconomic figures from the Federal Reserve or the US Bureau of Labor, individual company results can provide an alternative gauge of the economy and business sentiment. Our portfolio companies tend to be leaders in their respective industries, and therefore give good insight into various dynamics at play within their various sectors.

How Patrick Doyle Can Fix Restaurant Brands

2023-06-20T15:30:33-04:00By |Categories: An Ernest Opinion|

Last November, shares of Restaurant Brands International, the parent company of Tim Hortons, Burger King, and Popeyes, shot up on the announcement that Patrick Doyle would be the incoming Executive Chairman. The market’s enthusiasm is well founded: Doyle is best known for leading the turnaround of Domino’s Pizza as CEO from 2010 to 2018 with Domino’s Pizza being the #1 performing stock in the S&P 500 during that time.

A compounder thesis for Brookfield Corporation

2023-05-25T13:39:53-04:00By |Categories: An Ernest Opinion|

Last December, Brookfield Corporation (BN) listed its asset management business into an independent company called Brookfield Asset Management (BAM), in essence separating Brookfield’s capital (Brookfield Corporation) from the third-party capital managed by Brookfield. The naming can be confusing, so in this blog, BN will refer to Brookfield Corporation, while BAM refers to Brookfield Asset Management.

ESG & Canadian Energy

2023-01-16T11:09:45-05:00By |Categories: An Ernest Opinion|

In recent years, it has become common for companies to include a section on Environmental, Social, Governance (ESG) during investor calls and presentations. As an example, here is a slide from RioCan explaining their initiatives on ESG: I usually glaze [...]

The bottom line for big tech

2022-11-10T17:01:17-05:00By |Categories: An Ernest Opinion|

The recent underperformance of the so-called “FAANG” stocks has led some investors to question whether a strategy of owning these large technology companies remains sound. Ernest outlines why the long term prospects for these companies remains attractive.

Creating value in volatile markets

2022-09-28T11:44:37-04:00By |Categories: An Ernest Opinion|

Amidst the market volatility, investors sometimes forget that stocks and bonds fundamentally represent sources of capital for business operations. When capital is plentiful and prices are high, it is cheap for companies to invest in growth to open new stores, spend on marketing, hire employees, and make acquisitions by issuing new equity or cheap debt.

Costco’s true moat

2022-08-31T12:10:36-04:00By |Categories: An Ernest Opinion|

If you ask investors why Costco is so dominant, you will likely get answers such as low prices, strong cost control, consumer-friendly returns practices, membership program, and cheap gas, hot dogs, and rotisserie chicken.

Have growth stocks bottomed?

2022-06-06T11:25:55-04:00By |Categories: An Ernest Opinion|

A notable feature of the current stock market decline is how disproportionately growth stocks have been impacted. The S&P 500 is down only about 12% year-to-date, while the technology-focused NASDAQ is down about 18%. Apart from Energy (+41%), the top performing sectors are low-growth, dividend-heavy Consumer Staples, and Utilities stocks. This result is not too surprising as high-growth stocks are more impacted by rising interest rates than low-growth stocks.

Go to Top