Wall Street Firm Says Buy These 2 Stocks Ahead of a Weak Loonie

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While there might be a lot of pessimism surrounding  weak loonie, it turns out that pessimism might be unwarranted as of late. As our neighbours to the south continue to make rate cuts, many felt it was only a matter of time before Canada followed suit. However, on Sept. 4, the Bank of Canada announced it would be holding firm on Canadian rates. So, no cuts for Canada — yet, at least.

This has fuelled the opinions of many Wall Street firms, including Goldman Sachs. The firm believes there is a lot of worry over a country that, frankly, has been doing quite well economically speaking during all this turbulence. Of course, the America-China trade war will certainly continue to hamper Canada, along with really any economic decisions made in the United States. However, it looks like things might not be as bad as originally thought.

But if you’re still thinking a low loonie might be around the corner — and you could be right, with a recession on the way — then it might be a good time to invest in some stocks that stand to benefit from a weak dollar. In fact, these two have been touted as winners on Wall Street. So, let’s take a look.

Fortis

A great option for investors looking to diversify and find a stock that doesn’t completely depend on a strong economy is Fortis (TSX:FTS)(NYSE:FTS). This utilities company has remained strong, even during some of the weakest moments in our recent economic history. That’s because no matter what, people need to keep the lights on and the house warm. That means that during times of economic downturn, Fortis will continue bringing in cash.

This cash has allowed the company to expand well into the United States, and that’s where a weak Canadian loonie could really benefit this company. A weak Canadian dollar means its U.S. operations would be worth that much more. It also means it’ll have more cash on hand to make even more acquisitions — a process Fortis has already begun. The stock is up 25% year to date as of writing.

CNR

Another great stock to consider is Canadian National Railway (TSX:CNR)(NYSE:CNI), which also doesn’t necessarily depend on a strong economy to prove its worth. As with utilities, the railway keeps going because people need things like food and oil no matter what’s going on with the economy. In fact, CNR recently reported an increase in revenue due to the demand to ship oil across North America during this glut we’ve been experiencing.

And again we have the benefits of the U.S. dollar. As CNR continues to ship products across either side of the border, the company will benefit from its exporting services. This will help pay for the infrastructure reinvestment the company is currently going through and the acquisitions it keeps picking up. All great news for investors looking for a stock to buy and ride through a recession. The stock is already up 22% year to date as of writing.

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Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. David Gardner owns shares of Canadian National Railway. The Motley Fool owns shares of Canadian National Railway. Canadian National Railway is a recommendation of Stock Advisor Canada.

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Is it Time to Go Bottom Fishing With This Cannabis Stock?

Powder of Cannabis (Drugs), Analysis of Cannabis in laboratory.

Green Organic Dutchman (TSX:TGOD) was listed as a public company in April 2018. The euphoria about cannabis legalization in Canada drove TGOD stock from $4.12 in April 2018 to $10.2 in September 2018. However, cannabis stocks have experienced a massive correction in the last 12 months.

Now, TGOD is trading at $2.95 per share, which is 35% above its 52-week low and 71% below its 52-week high. Now, with the next wave of edibles legalization just a few days away, it is possible for cannabis stocks to move higher again, as investor optimism rises. So, do you buy TGOD shares? Let’s have a look at the company’s revenue and earnings growth as well as its valuation to see if it’s a good buy at the current price

Revenue growth is estimated at a staggering 1,843%

Analysts expect TGOD to post revenue of $36.51 million in 2019, a year-over-year growth of 1,843%. Sales are then estimated to rise by 515.5% to $224.71 million in 2020. While still unprofitable, TGOD will be improving the bottom line at a robust rate.

Analysts expect the net margin to improve from -162% in 2019 to 19.2% in 2020. Its EBITDA is estimated to rise from -$43.9 million in 2019 to $106 million in 2021. TGOD is valued at $752.1 million, which is 21 times its 2019 sales and in line with peer cannabis companies.

Why will TGOD become a major cannabis player?

Green Organic Dutchman has raised $465 million to date with a focus on rapid expansion. It has planned manufacturing capacity of 219,000 kg. The company has a 1.47 million square feet of hybrid greenhouses and processing facilities under construction in Canada. It is planning to have 167,000 square feet of manufacturing capacity in Europe and Jamaica.

Similar to other cannabis companies, TGOD will focus on international expansion to drive sales. Its currently focused on gaining traction in Jamaica, Denmark, Poland, and Mexico. TGOD has secured licensing deals in Canada and international markets and has a vibrant consumer-driven product portfolio.

The company has valued the medical market at $758 million and the recreational market at $5.7 billion.

Strong distribution network

TGOD has partnered with Velvet Management Inc., which is a leading cannabis sales and marketing agency. Velvet Management was established by Philippe Dandurand Wines, which is the largest wine distributor in Canada.

TGOD recently completed its first supply order to the Ontario Retail Cannabis Corp. It has supply agreements with The BC Liquor Distribution Branch and The Alberta Gaming, Liquor & Cannabis Commission.

The biggest driver for TGOD sales will be its entry into the U.S. markets next year. It has partnered with billion-dollar ingredient heavyweight Symrise to create Califormulations which is a U.S.-based beverage innovation company. Symrise provides companies with beverage commercialization support, technical services, and contract manufacturing co-ordination services.

It has also partnered with Jamaican market leader Epican Medicinals. The latter is a vertically integrated company with licences for cultivation, extraction, manufacturing, and retail distribution of cannabis products.

The verdict

While it might seem like TGOD is just another unprofitable high growth cannabis company, it is growing sales at an astounding rate via partnerships. It is expected to be profitable in the near future. TGOD is a good bet, as it seems that cannabis stocks should move higher significantly, at least till edibles are legalized.

Analysts have a 12-month price target of $5.23 for TGOD. This indicates that the stock is trading at a discount of 77% to the average target estimate.

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Fool contributor Aditya Raghunath has no position in any of the stocks mentioned.

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Why did Mugabe spend his last days in Singapore?

Former Zimbabwe president Robert Mugabe spent his final days in Singapore at one of Asia’s best hospitals, more than 8,000 kilometres (5,000 miles) away from his homeland.

He died Friday aged 95 at Gleneagles Hospital, breathing his last while surrounded by family members, according to a relative.

Why would an African leader choose to seek medical treatment in faraway Singapore?

Why Singapore?

Singapore’s reputation as a strictly-ruled country is conducive to privacy and lacks a paparazzi culture and aggressive media.

Its healthcare system is reputed to be among the best in the world, offering a whole range of services from health screenings to high-end surgical procedures.

A controversial figure like Mugabe could expect no protesters to hound him, as Singapore has strict rules against political gatherings.

Up until his death, no one would even officially confirm the hospital where Mugabe was being treated, sending journalists on a wild goose chase in the early hours after the announcement in Harare of his passing.

How long had he sought treatment in Singapore?

Local media said he first sought medical treatment for a cataract problem in 2011 and returned in 2014 for another procedure. Since then, his visits became more frequent.

AFP journalists saw Mugabe at Gleneagles Hospital in 2017. It was the first time he has been seen in public since he was forced to resign after a military takeover brought a sudden end to his authoritarian 37-year rule.

He was back in Singapore in April this year as his health deteriorated and a relative said he was in and out of the hospital while in the city-state.

Mugabe’s nephew Adam Molai told reporters in Singapore the former leader was admitted at Gleneagles around a week before his death.

Molai said he died of afflictions related to old age.

Who was with Mugabe when he died?

Molai said the former leader “was surrounded by family” when he passed away and that he died “very peacefully”.

Mugabe also “spoke about how he loves his family” in his final days, Molai added.

How much is a room at Gleneagles Hospital?

According to its website, suites are priced between Sg$1,158 and Sg$7,588 ($838 and $5,500) daily, while the cheapest admission is in a four-bed ward at Sg$259.

What are Mugabe’s other Singapore connections?

Mugabe and his wife Grace travelled to Singapore to visit their daughter Bona, who studied in the city-state.

Both parents attended her graduation when she was awarded a masters degree in management, specialising in banking and finance.

Mugabe’s wife, dubbed “Gucci Grace” in the media, is also known for her lavish shopping sprees around the world. She was reported to have spent 8,800 pounds ($10,700) on a handbag in a Singapore boutique.

Who else has sought treatment in Singapore?

Former Myanmar military leaders Soe Win and Than Shwe sought treatment in Singapore at various times.

Former Indonesian first lady Ani Yudhoyono died at Singapore’s National University Hospital in June.

In 2003, 29-year-old conjoined Iranian twins Laleh and Ladan Bijani chose Singapore to have their separation surgery but both died after a marathon operation.

And in 2012, a student who was critically wounded after a gang-rape in New Delhi — a case that sparked national outrage in India — was brought to Singapore for treatment but succumbed to her injuries soon after her arrival.

– AFP

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Riot police deployed as Hong Kong protesters target airport

Riot police fanned out across Hong Kong on Saturday in a bid to thwart plans by pro-democracy protesters to target the airport in the movement’s first mass mobilisation since the city’s leader made a surprise concession earlier this week.

Millions of pro-democracy supporters have taken to Hong Kong’s streets for the past three months in the biggest challenge to China’s rule since the city’s handover from Britain in 1997.

On Wednesday, the city’s pro-Beijing leader Carrie Lam surprised many by announcing she was scrapping a hugely unpopular extradition law that sparked the widespread and sometimes violent rallies.

The withdrawal was one of the protesters’ key demands and both she and Beijing had previously refused to budge on the issue.

Lam, who was not directly elected but appointed by an overwhelmingly Beijing-friendly committee, portrayed the move as a bid to de-escalate tensions and start a dialogue.

But it has been widely dismissed by protesters as too little, too late after 14 weeks of clashes with more than 1,100 arrests and many facing lengthy jail sentences.

Online messaging forums used by the largely leaderless movement had called for protesters to “stress test” the airport on Saturday afternoon, filling up with suggestions for how to disrupt the road and rail links leading to the terminals.

Police maintained a heavy presence at key bus, ferry and rail terminals across the city, many already dressed in riot gear and searching mostly young people’s bags or checking their IDs.

Some train and bus services to the airport were running a more restricted service in a bid to reduce the likelihood of large numbers of protesters getting to the airport, while officials advised travellers to leave extra time to catch flights.

At the airport on Saturday afternoon, the atmosphere was calm but passengers had to queue to have bags searched and boarding passes checked before being allowed to enter.

An AFP reporter saw one young man be detained and taken away.

Travel chaos

In recent weeks, the airport — the world’s eighth busiest — has become a repeated target of pro-democracy protesters as they try to ramp up pressure on Beijing and city leaders by denting Hong Kong’s reputation as a stable business hub.

But the tactic is controversial because of the travel misery it causes — and the fact that the target is not the state but ordinary people.

Last month hundreds of flights were cancelled over two days when huge crowds of protesters staged a sit-in at the airport, with ugly scenes playing out as two men suspected of being Chinese spies were beaten.

Previous protests at the airport had been non-disruptive and peaceful, aimed at enlightening travellers about the movement’s goals.

Since the violent scenes, security has been ramped up around the sprawling hub — which lies on reclaimed land west of the main city — and access to the terminals has been restricted to those with boarding passes.

But last Sunday protesters returned to the airport and showed they could still wreak havoc.

Operators of the express train that links the airport and the city suspended services after the station was besieged and objects were thrown onto the rail line.

Black-clad protesters also built barricades at the bus terminus and attempted to stop traffic on the main road leading to the facility.

Stranded travellers were forced to abandon their vehicles and drag their luggage along the airport road for many kilometres.

Protesters have said their movement will only end when other key demands are met such as an amnesty for those arrested, an independent inquiry into police use of force and the granting of fully free elections, all of which Lam and Beijing have rejected.

At a peaceful rally on Friday night in the city’s commercial district, many protesters said they planned to continue hitting the streets.

“It’s too late now. In these three months, a lot of people have sacrificed themselves and been arrested,” said a retiree who gave his surname as Cheng, bursting into tears as he spoke.

The same night, tear gas was fired at small groups of more hardline protesters who were shining laser pens at a police station in the district of Mongkok, an area that has seen repeated clashes.

They later built barricades and vandalised a nearby subway station.

– AFP

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