Bruce Murray's Top Picks
Bruce Murray, CEO and CIO at The Murray Wealth Group
FOCUS: North American growth stocks
The economic shutdowns in reaction to the pandemic have led to a sharp and significant recession which unfortunately for many businesses sped up an already ongoing trend we shall call “online living.” This benefited major companies leading technology provision and retailer and other businesses which had developed an online or drive-through presence. We saw quick recoveries and new highs in most of these stocks.
With the announcement of successful vaccine trials, the market in November looked towards full economic recovery and gave investors the best monthly gain in many years. We believe a new secular bull market is well underway. Look forward to a decade or so of rising economic numbers.
We expect continued long-term gains in major technology, media and retail companies that gained market advantage in pandemic. We also feel many cyclical companies will have a few years of strong markets as we recover from the economic shutdown. A focus on healthcare is also a theme of the portfolio as medical advances continue unfold.
Amazon (AMZN NASD) - Most recent buy Nov. 20, 2020 at $3,107.
Amazon was perfectly positioned for the pandemic and its empire continues to flourish. Corporate sales pass $400 billion in 2021 and $500 billion in 2022. On top of this, their profitability also increases as the “high-margin” businesses of advertising, memberships and AWS exceed 25 per cent of total revenue for the first time in 2021. We see Amazon as an unstoppable juggernaut for the next few years as it enters new verticals like pharmacy and Prime Video. If it holds its multiples, the stock could exceed $4,000 next year.
Linamar (LNR TSX) - Most recent buy Nov. 16, 2020 at US$3,107.
This Canadian-based, multi-industry company is well positioned for the stronger economy in a post-COVID environment. Its large automotive machining division is already benefitting from a pickup in auto demand, particularly in pickup trucks where Linamar supplies the 9- and 10-speed transmissions to both GM and Ford. It has also won major contracts for electric vehicles.
Subsidiary Skyjack offers good upside to rebounding construction led by housing in the U.S. market. The MacDon farm machinery division is benefiting from recently strengthening grain demand. Despite being up almost 40 per cent, in the last month we expect Linamar’s earnings per share to surpass $10 and the stock to move significantly higher to the $80-$120 range.
Boston Scientific (BSX NYSE) - Most recent buy Nov. 20,2020 at US$33.89.
Boston Scientific is one of the largest medical device manufacturers focused on cardiology, endoscope, urology and pelvic health products. Non-emergency medical procedures have declined during the pandemic and a recent recall of a discontinued heart valve has caused the stock to fall from a January high of over US$45 to a price below US$34. We believe this trend will be reversed over the next year as the economy opens up and medical procedures normalizes.
PAST PICKS: NOV. 28, 2019
Facebook (FB NASD) - Target: $4,000+
- Then: $202.00
- Now: $284.94
- Return: 41%
- Total Return: 41%
Amazon (AMZN NASD) - Remains a core holding with favourable multi-year outlook. Target $315 +
- Then: $1,818.51
- Now: $3,176.74
- Return: 75%
- Total Return: 75%
Aritzia (ATZ TSX) - Still holding awaiting economy reopening. Target: $30+
- Then: $18.75
- Now: $23.33
- Return: 25%
- Total Return: 25%
Total Return Average: 47%