David Baskin, president of Baskin Wealth Management
Focus: North American large caps

MARKET OUTLOOK

While there are definite signs of a slowdown in parts of the Canadian and U.S. economies, particularly in manufacturing, employment remains high and consumer spending is holding up very well. We see surprising strength in U.S. housing and consumer essentials. The major concern continues to be trade tensions, heightened this week by Donald Trump’s threats against Argentina and Brazil. Low interest rates continue to make stocks look relatively attractive even after the very large gains in 2019. We see no signs of a recession in the near future and corporate earnings in the third quarter were fairly solid. All in all, we feel the stocks markets in North America are fairly priced and present opportunities that must be found one by one based on fundamental analysis of sectors and companies.

UPDATES

Bookings Holdings, sold at US$1,718 on June, 4, 2019. The competitive environment for online booking services has resulted in reduced margins and we decided to sell.

TOP PICKS

ROGERS COMMUNICATIONS (RCI/B:CT)

We believe Rogers shares are undervalued after falling on weak earnings. The key impact in the quarter came from Infinite unlimited data plans being much more popular than Rogers had anticipated, which led to lower data overage fees and lower average revenue per user (ARPU). We believe that unlimited data is an inevitable shift for the industry and that despite the short-term impact, experience from U.S. peers suggests that Rogers and the industry will ultimately benefit from higher pricing and lower customer service costs. At 15 times earnings, Rogers is now trading at a discount to its Canadian peers.

LIVE NATION (LYV:UN)

Live Nation is the largest concert promoter in the world, hosting 100 million fans in over 38,000 concerts around the world. Live Nation is a key beneficiary from growth in experiential spending and is the only company with a global network of venues that can offer artists a global tour. Through Ticketmaster, Live Nation helps an artist maximize their reach and earnings by optimizing ticket pricing to recapture secondary market volumes. We think that the shares on the recent dip are attractive given the long-term fundamentals.

NATIONAL BANK (NA:CT)

We like the Canadian banking sector overall as long-term investments given their strong history of profitability and dividend growth. We would like to highlight National Bank due to its strong exposure to Quebec. The province has been the fastest-growing economy in Canada over the last two years, with strong economic fundamentals relative to the rest of Canada. Quebec has less housing risk, less energy exposure and consumers have less debt. We believe that at 11 times earnings, National Bank should delivery healthy returns and dividend growth going forward.

PAST PICKS: JAN. 22, 2019

BERKSHIRE HATHAWAY (BRK/B:UN)

• Then: $200.72
• Now: $218.08
• Return: 9%
• Total return: 9%

BOOKING HOLDINGS (BKNG:UW)

• Then: $1708.98
• Now: $1879.98
• Return: 10%
• Total return: 10%

BCE (BCE:CT)

• Then: $55.76
• Now: $63.54
• Return: 14%
• Total return: 18%

Total return average: 12%