Christine Poole, CEO and managing director at GlobeInvest Capital Management
Focus: North American large caps

MARKET OUTLOOK

The unprecedented fiscal and monetary policy responses to the global lockdown were necessary and stabilized both equity and bond markets. From an economic standpoint, the second quarter will mark the trough. As economies reopen, reported data measured in percentage increases will improve significantly, going from virtually no activity to some activity. More importantly, how quickly this improvement translates into a revival in consumer and business confidence and job growth will influence the shape of the recovery.

Notwithstanding the various assistance programs available to consumers and businesses, the longer the economy remains in a recession, the higher the potential for permanent structural damage. According to Fed Chairman Jerome Powell, a vaccine will likely be needed for the economy to recover to pre-crisis levels. In the meantime, the U.S. Federal Reserve remains committed to do whatever it can for as long as it takes to support the economy and to limit lasting damage to the economy. 

The direction of stock markets will largely be driven by the course of the virus and medical developments. Rising U.S.-China trade tensions and the U.S. election are also events that bear close monitoring. With volatility remaining relatively high, we expect heightened sensitivity to news flow. Long-term investors should be patient and use pullbacks to invest in financially sound income and growth stocks.

TOP PICKS

ABBOTT LABORATORIES (ABT NYSE)
Recently purchased at $88.75 range on June 2020.

Abbott is a diversified global healthcare company operating in four segments: established pharmaceuticals (15 per cent of sales), diagnostics (24 per cent), nutritionals (24 per cent) and medical devices (37 per cent). Its products are sold in over 160 countries, with 59 per cent of sales from developed markets and 41 per cent of sales from emerging markets. Abbott has increased its dividend for 48 consecutive years and offers a dividend yield of 1.6 per cent.

CGI INC (GIB/A TSX)
Recently purchased at $87.50 range on June 2020.

CGI is a global technology services firm deriving 55 per cent of its revenues from outsourcing and 45 per cent from systems integration and consulting. Its revenue breakdown by geography consists of approximately 53 per cent from Europe, 28 per cent from the U.S., 14 per cent from Canada and 5 per cent from Asia Pacific. CGI benefits from the need for enterprises and governments to develop a digital platform, explore digital technologies like artificial intelligence, formulate cybersecurity protection solutions and seek continuous productivity improvements. Management remains focused on creating shareholder value through profitable organic growth, accretive acquisitions at reasonable prices and timely share repurchases. 

WSP GLOBAL (WSP TSX)
Recently purchased at $83.95 on June 2020.

WSP Global provides engineering and design services to clients in the transportation and infrastructure, property and buildings, environment, power and energy, resources and industry sectors. Through strategic acquisitions, WSP has expanded its global presence, with Canada representing 16 per cent of revenues, Europe, the Middle East, India and Africa 35 per cent, the Americas 33 per cent and Asia Pacific 16 per cent. WSP is committed to its proven growth strategy of being a consolidator within a fragmented industry, continuous margin improvement and pursuing organic growth while maintaining a strong balance sheet. WSP offers a dividend yield of 1.8 per cent.

PAST PICKS: JUNE 11, 2019

ALPHABET (GOOGL NASD)

• Then: $1081.04
• Now: $1455.36
• Return: 35%
• Total Return: 35%

BROOKFIELD ASSET MANAGEMENT (BAM/A TSX)
Stock split 3-for-2 on April 2, 2020.

• Then: $62.97
• Now: $45.14
• Return: 8%
• Total Return: 9%

TD BANK (TD TSX)

• Then: $75.72
• Now: $61.12
• Return: -19%
• Total Return: -16%

Total Return Average: 9%