BCE is a “long-haul” stock, this fund manager says

Ryan Bushell, president and portfolio manager at Newhaven Asset Management, said BCE (BCE Stock Quote, Chart, News, Analysts, Financials TSX:BCE) remains an attractive defensive holding amid shifting investor flows and growing interest in value and yield names.

Speaking on BNN Bloomberg’s Market Call on Dec. 12, Bushell said recent broker upgrades have begun to change sentiment toward the stock, with those revisions feeding into quantitative models and reversing fund flows after a prolonged period of underperformance.

“In the past week and a half, everybody’s coming out with their year-ahead outlooks, and BCE has been a top pick at five or six brokers,” Bushell said. “The upgrades start to come through, that flows through the quants, and we start to see a reversal of funds flow.”

Bushell said he recently met with BCE management and came away encouraged by the company’s strategic direction, including its focus on operating discipline and growth initiatives. He highlighted Ziply Fiber as a potential upside catalyst, noting management optimism around the asset.

“They’re pretty excited about Ziply, and I think that has potential for upside surprise,” he said.

Bushell also pointed to BCE’s dividend yield, currently around 5%, as increasingly compelling in a market that has favoured momentum and growth trades for much of the past year. He said the stock could benefit if broader equity markets become more volatile and investors rotate back into stable, income-generating names.

“If and when markets get choppier, you’re going to see money flow back to what’s cheap and stable, and that’s BCE,” Bushell said. “When some of the froth comes out of the market, this could actually be a beneficiary.”

He added that tax-loss selling toward year-end may have weighed on the shares and could set the stage for renewed buying interest in January. While acknowledging the stock’s decline from earlier highs, Bushell emphasized a long-term investment horizon.

“It’s frustrating to see it come down from $63.00, but it probably goes back to $63.00 someday too,” he said. “This is a long-haul play.”

BCE shares have fallen 11.5% over the past 12 months and are down about 40% over five years. Of the analysts covering the stock, nine rate it “Buy,” five “Hold,” and four “Sell,” with an average price target of $36.42.

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