Chris Stuchberry, portfolio manager at Wellington-Altus Private Wealth

Focus: North American large caps and global ADRs

MARKET OUTLOOK

Markets opened 2019 as good as they ended 2018…badly.  The bounce has been built on certainty replacing uncertainty.  In December, we didn’t know trade policy, political policy and interest rate policy south of the border.  Since then, we have certainty in monetary policy remaining flat, Congress and the House will be forced to work together as they always have and the trade conflicts with China, although unsolved, are on the front page.

In terms of risks to the markets: unemployment is basically at or below structural in the U.S. and it can’t really get better. As this occurs wage inflation is beginning to happen.

Lastly, a company specific example: Home Depot shows earnings up nearly 30 per cent on tax reform. Healthy companies are unlikely to have massive layoffs causing recession.

TOP PICKS

BOX (BOX.N)

Box is a leading cloud content management company catering to fortune 500 customers.  Their platform as a service is open, relative a Microsoft or other competitor, so it allows best competitor software to integrate with the platform.  It has a solid balance sheet and good growth outlook. They recently released a lower guidance which we think is a buying opportunity.

SPIN MASTER (TOY.TO)

Spin Master’s Q4 earnings release was tough, the revenue was weak and earnings were very disappointing a continued result from Toys "R" Us.  This hides the fact that the company continued to strengthen the balance sheet.  They continue to accumulate cash, growing their cash balance in 2018 despite buying teddy bear company Gund, building out additional intellectual property in new TV shows and a deal with DC Comics to build toys.

TD BANK (TD.TO)

It’s currently trading with a yield of approximately four per cent which is quite high for TD.  You get exposure to both Canada and the U.S. with their interest rate environments.  We believe uncertainty in interest rate policy provides a buying opportunity.

DISCLOSURE PERSONAL  FAMILY PORTFOLIO/FUND
BOX Y Y Y
TOY Y Y Y
TD Y Y Y

PAST PICKS: Aug. 22, 2018

FACEBOOK (FB.O)

  • Then: $173.64
  • Now: $170.14
  • Return: -2%
  • Total return: -2%

ALIBABA (BABA.N)

  • Then: $177.85
  • Now: $180.36
  • Return: 1%
  • Total return: 1%

ING GROEP (ING.N)

  • Then: $13.92
  • Now: $12.36
  • Return: -11%
  • Total return: -11%

Total return average: -4%

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
FB Y Y Y
BABA Y Y Y
ING Y Y Y

FUND PROFILE

Custom Managed Growth Composite

Performance as of: Feb. 28, 2019

  • YTD: 9.3% fund, 12.1% index
  • 1 year: 2.3% fund, 6.9% index
  • 3 years: 12.5% fund, 10.8% index

Index: TSX

Returns are net of fees, distributions, and annualized

WEBSITE: stuchberrygroup.ca

TWITTER: @stuchberrygroup