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Looking for investing ideas? Here’s your weekly digest of the Globe’s latest insights and analysis from the pros, stock tips, portfolio strategies plus what investors need to know for the week ahead.



Gordon Pape: It’s time to review your portfolio. Here are some stocks to hold and some to fold

Some securities are holding up well during the COVID-19 crisis, but others that seemed rock solid a few weeks ago are being battered, Gordon Pape writes. Given these dramatically changed circumstances, we need to review our portfolios and get rid of positions that are likely to drag down our returns for months. Here are some recommendations on what stocks to hold, and which ones to dump, including companies in the retirement living and energy fields.

More from Gordon Pape: Five cornerstone stocks to hold through the market turbulence to come

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Warren Buffett loves this number – here’s why you should, too

Bargain hunters might want to pay attention to an often-overlooked number – retained earnings – among the beaten down rubble in the stock market, writes John Reese of Validea. It’s a somewhat dry term for the cash a company has left after covering all its costs, including dividends paid to shareholders.

Companies that report retained earnings show they are generating extra cash they can use to reinvest in their business, a positive sign about management performance, especially in turbulent economic times such as now when cash on hand and cash generation seem more important than ever.

Warren Buffet spent some time writing about the importance of retained earnings in his annual letter to shareholders earlier this year. As he sees it, a management that can get an above-average return on its retained earnings is a good investment for his company, Berkshire Hathaway, and its shareholders.

High-scoring stocks according to Buffett-based model

NameTicker$ Price
(Apr. 22)
Mkt Cap
($-mln)
P/ELT EPS
Growth
Dividend
Yield
U.S. stocks
UnitedHealth Group Inc.UNH-N 277.02 262,456 19.425.3%1.6%
Tractor Supply Co.TSCO-Q 95.43 11,072 20.512.3%1.5%
Biogen Inc.BIIB-Q 298.01 49,496 9.521.3%n/a
Mastercard Inc.MA-N 256.91 255,441 32.523.8%0.6%
Apple Inc.AAPL-Q 276.10 1,208,070 21.811.4%1.1%
Cdn stocks
CI Financial Corp.CIX-T 13.79 3,065 9.57.5%5.2%
IGM Financial Inc.IGM-T 26.90 9,230 12.31.1%5.8%
Metro Inc.MRU-T 60.02 15,164 19.339.8%1.0%
Constellation Software Inc.CSU-T 1,346.63 28,441 61.633.2%0.4%
Canadian National Railway Co.CNR-T 109.08 77,890 20.111.6%2.0%

Source: www.validea.ca

U.S. stocks in USD; Canadian stocks in CAD.

Related: Berkshire sells entire stakes in U.S. airlines, ‘world has changed’ for aviation industry, Buffett says

David Rosenberg: Four things every wise investor should know before buying into a rally

As stock markets continue recovery amid sharp volatility, the struggle against the coronavirus is far from over. David Rosenberg is highlighting four things for wise investors to consider before buying in, including that it’s best to avoid bear markets all together: “Staying out of trouble provides you with a total annualized price performance of 17 per cent versus the 7 per cent you get by riding out all bear and bull markets and playing the part of the ‘buy and hold’ investor. The more than 70 million U.S. baby boomers, I can assure you, don’t have the luxury of that long timeline in any event.” You can read more here, along with his three other things wise investors should know.

Read more: Here are the returns of every TSX Composite stock since markets bottomed last month

Four investing lessons from the coronavirus pandemic

Just as scientists and governments are learning important lessons during the coronavirus pandemic, investors are getting a crash course in crisis portfolio management, John Heinzl writes. Here are some key investing lessons, including utilities are your friend: “I’m a big fan of utilities and other companies with regulated or contracted cash flows, such as power producers, pipelines and infrastructure stocks. During a crisis, these stocks can provide much-needed stability."

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Consider Fortis, an electric and gas utility with operations in Canada, the United States and the Caribbean. The shares initially plunged with the rest of the market, but by the middle of this past week they had clawed their way back to within 5 per cent of their pre-pandemic high. Other utilities stocks have also held up relatively well: Through April 30, the S&P/TSX Capped Utilities Index posted a year-to-date total return (including dividends) of negative 1.5 per cent, compared with a total return of negative 12.4 per cent for the S&P/TSX Composite Index.

More from John Heinzl: Loblaw, Mastercard and more investing stars and dogs for the week

Also: John Heinzl’s Yield Hog model dividend growth portfolio as of April 30, 2020

Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up here.

Three situations where you should totally keep your money out of the stock market

The bull market that ended abruptly in late February has left us with some bad habits, Rob Carrick writes. Strong returns from stocks, coupled with low rates on savings vehicles, led some people to put money in the markets when it should have been in something safe, such as guaranteed investment certificates or savings accounts. Here are three examples, including if you’re saving for a down payment on a home:

Even now, with stocks way down from the peak earlier this year, it’s too risky to put your house down payment fund in the markets. The temptation to do so is easy to understand: Houses cost a lot in many cities and catching a wave in the stock market will make you a lot more than the 2 per cent or less you get from savings accounts. But they are going to be volatile for quite some time to come because of uncertainty over how quickly the economy will rebound from the pandemic-drive recession. Don’t expose your house down payment money to the next round of panic on the markets.

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More from Rob Carrick: Check your schadenfreude, advisers. Robo-advisers are thriving in the bear market

What investors need to know for the week ahead

Many more companies are releasing their latest earnings in the week ahead, including Air Canada, BCE, Telus, Hyrdo One, Shopify, George Weston, Thomson Reuters, Manulife Financial, Sun Life Financial, Great-West Lifeco, Enbridge, Magna International, Marriott International, Linamar, RioCan REIT, Walt Disney, T-Mobile, Barrick Gold, Suncor, Great Canadian Gaming, Ballard Power Systems, Algonquin Power & Utilities, Inter Pipeline, Recipe Unlimited, SNC-Lavalin and Emera.

Economic data on tap include Canading and U.S. employment figures for April on Friday, as well as: U.S. factory orders for March (Monday); Canada’s merchandise trade deficit plus U.S. goods and services trade deficit for March (Tuesday); U.S. productivity for the first quarter (Thursday); Canadian housing starts for April and building permits for March (Friday).

Looking for more investing ideas and opinions?

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