Is the Carney government serious about building up Canada's defence industry?
The 'jury's out,' says president of the Canadian Association of Defence and Security Industries Christyn Cianfarani. Scaling up capacity in the procurement system is a 'heavy lift,' but if the country is signalling for change, 'industry will align to make that happen,' says Cianfarani.
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Globe and Mail
37 minutes ago
- Globe and Mail
Did Warren Buffett Make a Mistake Selling This High-Yield Dividend Stock? Wall Street Thinks So.
Warren Buffett became a legend for his investing prowess. These days, though, the 94-year-old billionaire is disinvesting more than he's investing. Buffett's Berkshire Hathaway has been a net seller of stocks for 10 consecutive quarters. In the first quarter of 2025, Buffett & team reduced Berkshire Hathaway's holdings in six stocks. They also completely exited the conglomerate's positions in two stocks. Citigroup (NYSE: C) was one of them. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More » But did Buffett make a mistake selling this high-yield dividend stock? Wall Street thinks so. Buffett's about-face on a turnaround play Buffett first initiated a position in Citigroup in the first quarter of 2022, buying around 55.2 million shares. Although bank stocks seemed to have lost some of their luster in the eyes of the Oracle of Omaha, Citigroup probably looked like a good turnaround play to him. Shares of the financial services giant had fallen sharply in early 2022, and Citigroup was the only large U.S. bank that traded below its book value. CEO Jane Fraser faced a steep challenge to right the ship. But Buffett likes solid underlying businesses available at attractive valuations. He scooped up shares of Citigroup and waited for the comeback. At first, the decision to buy the struggling bank stock might have seemed unwise, as Citigroup's shares continued to decline throughout much of 2022 and 2023. Buffett didn't flinch, though. Berkshire even bought another 89,000 or so shares of Citigroup in the first quarter of 2023. Buffett's patience was rewarded beginning in late 2023. Citigroup, along with the overall stock market, gained momentum that lasted throughout 2024 and into early 2025. Buffett sold most of Berkshire's stake in the big bank in the fourth quarter of 2024 and fully exited the position in the following quarter. Why did he bail out on Citigroup? We don't know for sure. It could be that Buffett thought Citigroup's turnaround was complete. Whatever his reasoning, Buffett almost certainly locked in a tidy profit for Berkshire by selling the stock when he did. Analysts overwhelmingly disagree with Buffett's move However, Wall Street seems to think Buffett & team made a mistake by selling all of Berkshire Hathaway's Citigroup shares. Of the 22 analysts surveyed by LSEG in May, 16 rate the bank stock as a buy or strong buy. The others recommended holding Citigroup. This overwhelmingly bullish take on Citigroup isn't new, either. Throughout the first quarter of 2025, at least 75% of analysts surveyed by LSEG viewed the stock as a buy or a strong buy with no analysts recommending selling. Wall Street's consensus 12-month price target for Citigroup reflects an upside potential of nearly 12%. The most optimistic analyst surveyed by LSEG thinks the stock can soar almost 46% over the next 12 months. Even the most pessimist analyst only sees a downside of around 7%. Who's right about Citigroup: Buffett or Wall Street? Was Buffett right to sell Citigroup, or are the majority of Wall Street analysts right about buying the stock? My answer is... both are probably right. Let's first look at Wall Street's perspective. Analysts see a solid financial services company with rising revenue and profits. They see a stock that trades at only 10.3 times forward earnings estimates. They see a share price that's still more than 25% below book value. And analysts recognize how attractive Citigroup's forward dividend yield of nearly 3% is. When we take these factors into account, it's easy to understand why so many Wall Street analysts recommend buying Citigroup stock. The optimistic consensus 12-month price target also makes sense. However, let's try to see things from Buffett's eyes. The investing icon isn't as big a fan of bank stocks as he has been in the past. He's likely concerned about the impact of tariffs on the U.S. economy. As previously mentioned, Buffett probably made a nice profit for Berkshire on its Citigroup investment. It's not hard to appreciate why he and his team might have chosen to sell the stock when they did. The bottom line is that it can be the right move for one investor to buy a stock while simultaneously being the right move for another investor to sell the same stock. Should you buy Citigroup stock? Or should you sell it? It depends on your personal circumstances, investing goals, and risk tolerance. Should you invest $1,000 in Citigroup right now? Before you buy stock in Citigroup, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Citigroup wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $651,761!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $826,263!* Now, it's worth noting Stock Advisor 's total average return is978% — a market-crushing outperformance compared to170%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of May 19, 2025
Globe and Mail
38 minutes ago
- Globe and Mail
Warren Buffett Doubled His Position in These 2 Stocks Last Quarter. Should You Invest in Them?
Warren Buffett's company Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) recently filed its latest 13F report, showing which stocks it has a position in. And by analyzing the filing, investors can see which stocks the company has been buying and selling. Berkshire hasn't been doing too much buying lately but there are a couple of stocks which it has dramatically increased its position in: Constellation Brands (NYSE: STZ) and Pool Corp (NASDAQ: POOL). Berkshire's share count in both of these stocks has more than doubled in just the past quarter. Are these stocks you should consider for your portfolio as well? Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More » Constellation Brands Berkshire increased its position in beer maker Constellation Brands by 114% this past quarter, and it now owns more than 12 million shares. However, that's still modest in relation to Berkshire's overall portfolio as Constellation accounts for less than 1% of its total holdings. Why would Berkshire be bullish on Constellation Brands right now? What Buffett may like is that it has some strong, identifiable consumer brands in Corona and Modelo, which gives the company a competitive advantage over its peers. The company has also been steadily growing its revenue over the years and its operating income has also been strong. In the trailing 12 months, Constellation's operating income totaled $3.4 billion on revenue of $10.2 billion, for an impressive margin of 33%. What may have enticed Berkshire to add to the position was that in mid-February, the stock hit a new 52-week low, and bargain investor that Buffett is, decided to load up on the stock at the time. Constellation Brands may look appealing but there are risks to consider as well. The company makes its beers in Mexico and tariffs pose a risk for the foreseeable future. And there are also rising health concerns around alcohol as it has been linked to an increased risk of developing several types of cancers, which could impact demand in the long run as consumers become more health conscious. For those reasons, I wouldn't go out and buy the stock. But if you want a cheap dividend stock, Constellation could make for a compelling option as it pays 2.2%, which is better than the S&P 500 average of 1.3%. Pool Corp The stock that jumped the most (in terms of percentage points) in Berkshire's portfolio this past quarter was Pool Corp. Berkshire's position in that stock increased by 145%, but at around 1.5 million shares, it's a much smaller position overall for the company than Constellation. Pool Corp makes up just 0.2% of Berkshire's entire portfolio. As its name suggests, Pool Corp is in the business of pools; it refers to itself as "the world's leading wholesale distributor of swimming pool equipment, parts and supplies, and related outdoor living products." The company has a strong global presence with sales centers in North America, Europe, and Australia. Pool Corp's numbers are good but not as impressive as Constellation's. For one thing, the company's sales declined for the past two years, from $6.2 billion in 2022 to $5.5 billion the following year, and falling to $5.3 billion this past year. It is profitable, but its operating income of $617 million in 2024 was a more modest 12% of its top line. That's a decent margin, but it doesn't look terribly exciting. As with Constellation Brands, Pool Corp stock has also been falling in recent months, and that may have incentivized Buffett to add the stock to Berkshire's holdings. Overall, it's a simple business to understand, it makes decent profits, and it pays a dividend of 1.7%. It's a no-nonsense stock that fits well with other consumer stocks that Berkshire has in its portfolio. But here again, I'd pass on the stock simply because its numbers aren't all that compelling, and a time when consumers are scaling back on discretionary purchases, there may not be growing demand for swimming pools anytime soon. Should you invest $1,000 in Constellation Brands right now? Before you buy stock in Constellation Brands, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Constellation Brands wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $651,761!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $826,263!* Now, it's worth noting Stock Advisor 's total average return is978% — a market-crushing outperformance compared to170%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of May 19, 2025
CTV News
42 minutes ago
- CTV News
Ontario wants to study building a 401 tunnel, but one expert says there's a much simpler fix than that
Doug Ford's government plans to study the idea of digging a tunnel under Highway 401. THE CANADIAN PRESS/Darren Calabrese + THE CANADIAN PRESS/Chris Young (CTV News file photo). Ontario is studying the idea of digging a massive tunnel under Highway 401 but one economist says there's a much simpler and proven way to reduce gridlock in Toronto — charge drivers at peak road times. 'The only response to traffic congestion, by which there's really any evidence, is congestion pricing,' said Matthew Turner, a professor of economics at Brown University and former University of Toronto professor. 'The problem is not road capacity, it's road capacity at peak times.' Premier Doug Ford has promised to build a traffic tunnel spanning from Mississauga and Brampton in the west to Scarborough and Markham in the east, despite criticism from opposition leaders. A feasibility study on the idea is planned and the deadline for firms to participate in the formal Requests for Proposal process officially passed on Thursday. The government has previously said that the study won't be completed until 2027. But experts say no matter what the study finds, the fundamental problem isn't how many lanes exist — but rather when they are being used. 'You add capacity, it gets filled up': 'My first reaction is that Toronto needs more transportation capacity,' Turner said. 'This is probably a very expensive way to get it, that it'll take so long to build that it's not even relevant to talk about it.' Highway 401 Traffic on Highway 401 in Toronto passes under a COVID-19 sign on Monday April 6, 2020. THE CANADIAN PRESS/Frank Gunn (Frank Gunn/THE CANADIAN PRESS) Turner has studied urban congestion for decades and says building new roads or tunnels simply doesn't work if the goal is to reduce traffic jams. 'Los Angeles has been trying to build its way out of traffic congestion for 60 years,' he said, pointing to the Santa Monica Freeway as a prime example of a project that keeps expanding but delivers only temporary relief. 'What happens in Los Angeles is typical. You add capacity. It gets filled up. More people get to move around, but you still have problems with traffic congestion.' Ford backs tunnel while critics call it 'imaginary' Ford first floated the idea of a Highway 401 tunnel in September and made it part of his successful re-election campaign back in February. Earlier this month, Ford also asked Prime Minister Mark Carney to prioritize 'nation-building' projects including the tunnel idea. The feasibility study will include other options to increase the capacity of Highway 401 and review best practices from similar projects, including a four-lane tunnel in downtown Ottawa that was also the subject of feasibility study that pegged its cost at $2 billion. That project has never moved forward. 'The reason we're having a feasibility study is it's going to determine the length. If they're telling me, 30 kilometres is X, 40 kilometres is Y, and 70 kilometres or 60 kilometres is another cost, let's take a look at it,' Ford said of the Highway 401 tunnel back in September. 'But we're going to get the job done, mark my words.' The formal Requests for Proposals asks for the feasibility study to be completed by February 28,2027 and to examine a corridor that spans from east of Highway 410 in Mississauga to east of Scarborough. But experts say that while technically possible, the tunnel could cost billions of dollars and take decades to build. Opposition leader Marit Stiles has been extremely vocal dismissing the idea often referring to it as 'imaginary,' and a 'silly thought from a government that's run out of ideas.' 'His big priority is to get the feasibility study done on this silly tunnel under the 401, this imaginary tunnel,' she said last month. Meanwhile, Ontario Liberal Leader Bonnie Crombie called the plan a fantasy that 'could bankrupt the province.' Toronto Mayor Olivia Chow was asked about the proposal during an interview with CP24 Breakfast on Thursday morning and seemed to suggest it is not a 'priority' for the city at this time. 'That is really up to Premier Ford and the federal government. I just know that I want public transit,' she said. 'In terms of priority infrastructure, the priority is still public transit, subway stations, the subway cars as well….' Does congestion pricing work? Here are the numbers While Ford remains confident on his big promise, some cities have already turned to congestion pricing — and seen significant results. Earlier this year, New York City began implementing a USD $9 congestion charge during peak hours south of Central Park. The result: a 7.5 per cent drop in traffic in the first week, or about 43,000 fewer vehicles entering the downtown core daily. Manhattan Tolls Signs advising drivers of congestion pricing tolls are displayed near the exit of the Lincoln Tunnel in New York, Wednesday, Feb. 19, 2025. (AP Photo/Seth Wenig, File) (Seth Wenig/AP) Turner says the evidence is overwhelming. 'If you are building more infrastructure with the idea that you're going to reduce traffic congestion, then there is an enormous amount of evidence that says that you're going to fail.' 'This infrastructure is so expensive, and it's so disruptive to build more, and people will fill it up if it's free.' Toronto, he says, already has the technical expertise to make pricing work. Why pricing the 401 is a hard sell Toronto has flirted with the idea before. In 2017, former Mayor John Tory proposed tolls for the Gardiner Expressway and Don Valley Parkway. But then-premier Kathleen Wynne shot it down, suggesting conditions were not right. Ontario, however, introduced legislation in 2024 that prohibits the introduction of any new tolls on provincial highways. Toronto is technically able to implement tolls on city-operated roads under the City of Toronto Act but the provincial government would be able to override it as it did in 2017. 'I think that the politicians want to build things, and congestion pricing is a hard sell, and so it's been really hard to implement,' Turner said. Today, the Ford government remains firmly opposed to tolls. In an email earlier this year, Transportation Minister Prabmeet Sarkaria's office said the government 'will never add a tax or toll to any road in Ontario,' citing their commitment to building infrastructure instead. Ontario's Minister of Transportation Prabmeet Sarkaria attend Question Period at the Ontario Legislature in Toronto, Tuesday, Nov. 28, 2023. THE CANADIAN PRESS/Chris Young Ontario's Minister of Transportation Prabmeet Sarkaria attend Question Period at the Ontario Legislature in Toronto, Tuesday, Nov. 28, 2023. THE CANADIAN PRESS/Chris Young Matthias Sweet, a congestion expert at Toronto Metropolitan University, said the refusal to consider tolls comes at a cost. 'Unless you take a policy like that, then you're basically saying traffic congestion is not as bad as the burden of potential solutions,' he said. Weighing the burden of Toronto traffic The Toronto Region Board of Trade estimates congestion costs the GTA $11 billion annually in lost productivity. A broader analysis by the Canadian Centre for Economic Analysis puts the cost to the Greater Toronto and Hamilton Area at $47 billion when social and economic losses are included. But Turner cautions against thinking of megaprojects like the 401 tunnel as a fix. 'These things take forever, and they're really disruptive while they're being done,' he said, pointing to Boston's infamous 'Big Dig' project — a tunnel and highway reconstruction that took over 15 years to finish, cost of over $14.8 billion, and was plagued by costs, delays, leaks, and hundreds of millions in lawsuits. 'If you're interested in managing the use level on these things, the only way that we know how to do that is pricing,' Turner said, adding that 'nobody wants to hear that.' With files from CP24's Joshua Freeman and The Canadian Press...
