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Warren Buffett Is Betting Big on 5G Tech! 1 Top Canadian 5G Stock to Buy in 2021

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The world’s most renowned investor Warren Buffett yesterday revealed his latest investment moves in Berkshire Hathaway’s (NYSE:BRK.A)(NYSE:BRK.B) latest 13F SEC filings. While Buffett heavily trimmed his banking sector stakes, he also bought shares of some other companies like Verizon Communications, Chevron, Marsh & McLennan.

Let’s try to understand Buffett’s latest investment moves and look at an amazing Canadian 5G stock to buy in 2021.

Buffett big bets on 5G tech

On Tuesday, Berkshire Hathaway revealed that it bought 146.7 million shares of the American telecom giant Verizon Communications in the quarter ended December 2020. Buffett-led investment firm’s stake in Verizon was worth US$7.9 billion as of yesterday’s closing price. On Wednesday afternoon, Verizon stock was trading with over 4% gains for the day.

Interestingly, Berkshire Hathaway bought about 2.4 million shares of T-Mobile in the previous quarter. In Q4 2020, Buffett more than doubled his T-Mobile position. Now, his investment conglomerate holds about 5.2 million shares of the telecom company — worth US$640 million. Both T-Mobile and Verizon have been heavily investing in the 5G technology and infrastructure lately.

Is Buffett changing his investment strategy?

Interestingly, the global pandemic seems to have changed Buffett’s approach towards investing. Last year, his investment company sold all its airline companies’ holdings. In the last quarter, Buffett also cut his exposure to the banking industry. Berkshire Hathaway sold all its stake in JPMorgan Chase in the last quarter while cutting its stake in other large banks like U.S. Bancorp and Wells Fargo.

But I don’t think that Buffett has recently made any significant change in his core investment philosophy. Instead, he appears to adjust his portfolio to benefit from in the post-COVID world and avoid risks at the same time. The 90-year-old billionaire investor continues to be optimistic about a speedy global economic recovery after the pandemic — especially in the U.S.

His 5G bets could pay off well in the medium term, as the 5G technology becomes widely available across North America.

One TSX 5G stocks to buy in 2021

Canadian investors can follow Buffett and benefit from the upcoming 5G boom by investing in Telus (TSX:T)(NYSE:TU). The Vancouver-based Canadian telecom giant is continuously raising its bets on the upcoming 5G technology. Last year, nearly 53% of its total revenue came from the wireless network, while the remaining were from the wireline segment.

During the COVID-19 phase, its sales growth rate more than doubled. Telus reported $15.5 billion in revenue in 2020 — up 5.5% from a year ago. In the previous year, its revenue growth rate was only 2%. As the 5G technology goes mainstream, the company’s sales are likely to get another boost in the coming quarters. That’s why Street analysts expect its 2021 revenue to grow by over 8%.

The pandemic-related higher costs affected Telus’s bottom line in the last few quarters. I expect the company to see a sharp recovery in its profitability, as the pandemic gradually subsides in the coming months. Improving sales, expected profit margin expansion, and the upcoming 5G boom could start a medium- to long-term rally in Telus stock in 2021.

Final thoughts

Warren Buffett has cut his risk exposure by exiting the airline industry and trimming his banking sector stakes. However, his recent investment moves clearly show his confidence in how you could benefit from the ongoing rally in tech and telecom stocks. That’s why you may want to add some high-growth stocks to your investment portfolio before it’s too late.

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A big test of reusable packaging for groceries comes to Canada

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An online store has launched in Ontario selling groceries and household items from Loblaws in containers it will take back and refill — a test of whether Canadian consumers are ready to change their habits. Industry-watchers say it is breaking ground for reusable packaging.

The store, called Loop, launched in Canada on Feb. 1, in partnership with supermarket giant Loblaws, and offers items like milk, oats, ice cream and toothpaste for delivery in most of Ontario. Loop is already operating in the continental U.S., the U.K and France. 

Included so far are some products from well-known brands such as PC sauces and oils, Häagen-Dazs ice cream, Heinz ketchup, Chipits chocolate chips and Ocean Spray cranberries. 

“The goal is really validating that this is something the Canadian public is interested in,” said Tom Szaky, founder and CEO of Loop and its parent company TerraCycle.

Unlike existing small no-waste retailers, they want to offer “your favourite product at your favourite retailer in a reusable and convenient manner.”

The involvement of a huge retailer makes the launch notable in terms of scale and who it will reach, said Tima Bansal, Canada Research Chair in business sustainability at Western University in London, Ont. 

“I think it’s at the scale that’s needed to create the change in the community in Canada more generally,” she said.

How it works for customers

Szaky likens Loop to the reusable bottle system for beer in Canada “but expanding it to any product that wants to play in the [North American] ecosystem.”

The ultimate goal, he said, is to give people a greener way to consume that limits the amount of mining and farming needed to produce packaging.

“This allows us to greatly reduce the need to extract new materials, which is the biggest drain on our environment.

Loopstore.ca currently lists just 98 products, although many are sold out or “coming soon.” 

As with other online grocery stores, customers fill their virtual shopping cart, but in addition to the cost of the item itself, they pay a deposit for its container. That can range from 50 cents for glass President’s Choice salsa jars like the ones that are normally at the supermarket to $5 for a stainless steel Häagen-Dazs ice cream tub. 

The items are delivered to a customer’s home by courier FedEx for a $25 fee, although the fee is waived for orders over $50.

Once you’ve spooned out all the salsa or ice cream or squeezed out all the toothpaste, the container doesn’t go in the recycling bin. Instead, you toss them into the tote bag they came in — even if they’re dented or damaged — and they get picked up.

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This wearable device beeps when workers get too close to each other

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It’s a device that emits a high-pitched beep, buzzes and lights up if your coworker steps too close.

While some introverts would have bought this device before the pandemic to stave off chatty colleagues near the coffee machine, ZeroKey designed the product with a more important purpose — helping employees physically distance to reduce the risk of spreading coronavirus. 

The Calgary tech company’s “Safe Space” device looks like a small plastic badge that can be worn on a wrist or clipped to a shirt pocket or belt. 

“Our products, in a nutshell, localize or figure out where things are in 3D space and our big claim to fame is we do it very precisely, more precisely than anyone else in the world,” said Matt Lowe, co-founder and CEO of ZeroKey.

The company says its location-tracking technology passively monitors the distance between each device and is accurate down to 1.5 millimetres. The distance on devices can be set — so if, say, science determines three metres apart is actually safer that two, that can be tweaked. 

Lowe says the company came from humble beginnings — he and a co-founder, working out of a room in his house. The company has grown from two to 30 employees and has more openings it’s looking to fill.

Inspired by sci-fi

Their inspiration comes, as so many technological innovations have, from sci-fi. 

Lowe recalls watching Minority Report, and being transfixed with the gesture-based user interface Tom Cruise’s character operates. 

“Wouldn’t it be awesome if we had an interface that was more in tune with how humans operate naturally with their hands. So if you could just walk up to a new piece of technology … and just immediately be proficient,” he said. 

But applying that tech to the COVID-19 era wasn’t something the company had anticipated.

Lowe said some of the company’s clients in the manufacturing industry approached ZeroKey with a request.

“They came to us and said, ‘hey … we have the data where people are, can you build some sort of system so that we can do contact tracing and we can let people know if they’re closer than two metres?’ And we said, ‘absolutely … that’s easier than what we normally do,'” he said.

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Blistering rallies spur Canadian tech world to repeat equity sales

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Canadian technology companies have been making multiple trips to the equity market over the past year, capitalizing on a rally in tech shares that’s helping them raise cash at ever higher valuations.

Dye & Durham Ltd., which makes software used by law firms, took advantage of a more than sixfold rally in its shares since its July IPO to raise $500 million (US$394 million) in a bought deal of stock and convertible debentures, the company said Tuesday. Dye & Durham, which went public at $7.50 a share, received $50.50 per share in the private placement. Peers including Lightspeed POS Inc. and Docebo Inc. have made similar moves.

Shares of technology companies have gained since the onset of the pandemic as their corporate customers increasingly turned to cloud-based applications to support their remote workforces, said Anurag Rana, an analyst at Bloomberg Intelligence. The technology sector was one of the few places investors could look for growth during the crisis, with huge swaths of the economy including retailers, restaurants, airlines, hotels and casinos hammered by lockdowns, he said.

“Issuers and private-equity investors are not stupid, and they know somewhere down the road that valuations may come back,” Rana said. “So this is the time when they sell.”

Canada’s S&P/TSX Information Technology Index has risen 82 per cent in the past year, fuelled by rallies in Lightspeed and Shopify Inc. That compares with a 36 per cent advance for the U.S. S&P 500 Information Technology Index.

Those gains are giving early investors in tech companies an opportunity to take some profits. In conjunction with Dye & Durham’s private deal announced Tuesday, some investors agreed with the underwriters to sell 1.98 million shares at the $50.50 price as well.

Lightspeed, which provides cloud-based point-of-sale systems for retailers and restaurants, has also seized the moment. The company went public in Canada in February 2019 and last year followed that up with a U.S. IPO, selling shares for US$30.50 apiece. The deal raised US$332.3 million for the company and US$65.4 million for some shareholders.

After Lightspeed’s share price more than doubled, it went back to the market again last week with a public offering of shares for US$70 each, raising US$620.2 million for the company and US$56 million for other shareholders.

Docebo, which sells cloud-based learning software, has tapped the market multiple times over the past year. The firm, which went public in Canada in October 2019, completed a bought deal of shares atC$50 apiece in August. The move raised $25 million for the company and $50 million for investors including founder and Chief Executive Officer Claudio Erba, Chief Revenue Officer Alessio Artuffo and top outside investor Intercap Equity Inc.

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