Paul Harris
Paul Harris is partner and portfolio manager at Avenue Investment Management. His focus is North American and global equities.
Top Picks:
Kraft Heinz (KHC-N)
It provides food services and food products which include ketchup and Kraft Dinner. The stock has a 3-per-cent dividend yield and trades at 20 times 2017 earnings. We continue to see cost cutting and organic growth through better distribution of Kraft products through the Heinz distribution network.
Potash Corp (POT-T)
It produces potash, phosphate and nitrogen to the agricultural and industrial industries worldwide. The next six to 12 months will be a difficult operating environment and pricing will remain weak, however long-term we are positive on the demand for postash growth and pricing. The stock pays a 6 per cent dividend which we think will be cut, but we would be a buyer as we like the longer term prospects for the company.
Bayerische Motoren Werke AG (BMW.AG)
It manufactures and sells luxury cars and motorcycles worldwide. With QE in Europe, we think that not unlike the U.S. consumer will front load purchases, especially automobiles (European auto sales are still below 2007 levels). The shares trade at 8.1 times 2017 earnings and has a 3.95-per-cent dividend yield.
Past Picks: July 8, 2015
DH Corp (DH-T)
Then: $39.46 Now: $32.18 -15.37% Total return: -15.37%
Element Financial (EFN-T)
Then: $19.09 Now: $14.53 -23.78% TR: -23.63%
Barclays PLC (BCS-N)
Then: $15.79 Now: $9.12 -42.24% TR: -40.54%
Market outlook:
The volatility should continue as the Fed remains on hold perhaps until July and the Brexit vote next week and the outlook for China and Europe remain mixed. We continue to believe that the U.S. will be the fastest-growing economy in the developed world. We continue to think that the Canadian economy will remain flat to marginally up, even with the budget and fiscal stimulus the federal government introduced. The TSX has benefited from oil, and the general resource rally has also helped the Canadian dollar. We still see value in certain sectors of the stock market such as financials, technology, health care and utilities. We are also concerned as many countries move to negative rates that do not bode well for growth and inflation going forward.