John Stephenson is president and CEO of Stephenson & Company. His focus is North American equities.
Top picks:
Duluth Holdings (DLTH-Q)
- Fast-growing niche retailer with a huge addressable market
- Revenue growth in the low to mid-20-per-cent range till 2020
- Sells direct and through retail stores high-quality functional apparel
*Short* Caterpillar (CAT-N)
- Was the beneficiary of a once-in-a-lifetime mining boom
- Challenging oil & gas and mining markets should have negative implications for CAT’s revenue/margins
- The company has posted a recent 35-per-cent move on limited news with a number of headwinds in place
Kinross Gold (KGC-N)
- Kinross has met or exceeded production/cost guidance over the past three years
- Valuation is still attractive to its larger-cap peers
- Gold prices should remain elevated in this uncertain market
Past Picks: July 10, 2015
WhiteWave Foods Company (WWAV-N)
Then: $49.88 Now: $43.96 -11.87% Total return: -11.87%
Allergan PLC (AGN-N) Then: $312.13 Now: $243.55 -21.97% Total Return: -21.97%
Moncler S.p.A. (MONC IM)
Then: €16.49 Now: €14.65 -11.16% Total Return: -10.31%
Market outlook:
Uncertainty has once again become the focus of the market with investors weighing the impact of negative interest rates in Europe and Japan and the upcoming Brexit vote. Investors should increase their defensive portfolio positioning by increasing their orientation toward quality dividend paying stocks and avoiding banks and other financial stocks.