Chris Stuchberry, portfolio manager at Wellington-Altus Private Wealth
Focus: North American large caps and ADRs

MARKET OUTLOOK

In the short term, the market has had a good June rally to make up for the difficult May. Currently, we are slightly overbought. We expect a sideways to slightly positive summer. We believe earnings season will be good, but guidance declines have occurred that could be painful for individual equities. Longer term, we think the risk remains to the upside. The Fed is virtually certain to cut interest rates and in doing so it will stimulate an already strong economy and stock market. As interest rates decline, stocks generally go up; that tailwind could help give us a positive summer in markets.

TOP PICKS

FACEBOOK (FB.O)

A year ago, Facebook’s earnings resulted in the largest one-day drop in market value in the history of stock markets. A year on, the stock is within 15 per cent of its all-time high. Its core platform has slowed, but Instagram provides continued growth. It’s important to remember that Facebook generates most of its earnings on mobile advertising and mobile continues to climb relative legacy platforms. Their foray into cryptocurrencies is unique in that it will have virtually no customer acquisition cost.

CLOUDERA (CLDR.N)

Cloudera is an enterprise data company. Its software allows customers to analyze and assess their data. Generally, most data is simply stored, very rarely is it actually analyzed and acted upon. By using data to drive decisions, analysis companies will be more successful. Cloudera has a huge cash balance, no debt, is absorbing a large merger and also trading quite cheap at these levels. We like data analytics as a business and see long-term growth in the space.

ROYAL BANK (RY.TO)

Royal Bank is arguably one of the best companies in our country. It has a solid yield at these levels, its execution is second-to-none in the industry and in the event interest rates go back up, it’s likely a very good entry point. A safe yield of nearly 4 per cent with solid potential growth is a good payment while waiting.