Bill Harris, partner and portfolio manager at Avenue Investment Management
Focus: Canadian large- and mid-cap stocks
MARKET OUTLOOK
This is an extraordinary time in the market for how many companies are valued. A key underlying factor seems to be liquidity. Interest rates are low, but many stocks have high dividend yields.
The Canadian stock market is close to a high, but it mainly looks like companies are pricing in a recession. Added to that is a perception that a lot of what Canada does is uninvestable.
We continue to look for and invest in consistent income streams — wherever we can find them. We believe this is a great time to invest in Canada, as many of these companies are being given away. That said, we’re making sure our portfolio is diversified and we use risk management in case an individual story starts to fall apart.
TOP PICKS
KEYERA (KEY.TO)
Keyera owns and operates key pieces of western Canadian natural gas processing. We’re now getting a 5.5 per cent dividend yield for a long-life hard asset. The company plans to expand its reach and better integrate many of their plants by building a new pipeline to Northeast B.C. by 2022.
CAMECO CORP (CCO.TO)
Cameco is an extraordinary part of Canada’s mining history. The Saskatchewan uranium mine has been idled, so the company can buy uranium in the spot market and deliver into their long-term hedges to help bring the global market for the commodity back into balance. We hope we will see a significant move in uranium in the coming 12 months.
WESTERN FOREST PRODUCTS (WEF.TO)
Western Forest Products is a more stable business in the commodity cyclical world of lumber. We believe we’re closer to a bottom in the lumber price. The company is debt-free and has a dividend of 5 per cent, which should be sustainable as we wait for a recovery.
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| KEY | Y | Y | Y |
| CCO | Y | Y | Y |
| WEF | Y | Y | Y |
PAST PICKS: APRIL 13, 2018
ENBRIDGE (ENB.TO)
- Then: $40.42
- Now: $46.35
- Return: 15%
- Total return: 24%
CENOVUS ENERGY (CVE.TO)
- Then: $12.72
- Now: $11.36
- Return: -11%
- Total return: -9%
ROXGOLD (ROXG.TO)
- Then: $1.16
- Now: $1.02
- Return: -13%
- Total return: -13%
Total return average: -1%
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| ENB | Y | Y | Y |
| CVE | N | N | N |
| ROXG | Y | Y | Y |
WEBSITE: www.avenueinvestment.com
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