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

For the first time since the great recession, now almost 10 years ago, all important regions of the world economy are showing reasonable growth. The Euro Zone is showing good progress on both employment and GDP, as are the U.S. and Canada. There is virtually no sign in consumer price inflation and no reason to expect interest rates to rise more than modestly. Not surprisingly, this benign economic environment has seen stock markets rise around the world, leaving Canada as a noticeable laggard.

Canadian investors who own foreign stocks were hit this summer by the rising Canadian dollar, which ate up almost all gains from markets denominated in U.S. dollars. Coupled with the slow returns on the TSX and very low interest rates, most investors have had little to cheer about in the past four or five months.

We think the best opportunities lie in the TSX, particularly in banking, insurance and asset management. Canadians may have one last chance to buy quality U.S. stocks, particularly in technology, health care and leisure sectors, while the loonie maintains its altitude.

TOP PICKS

BROOKFIELD ASSET MANAGEMENT (BAMa.TO)
Now widely recognized as a world leader in infrastructure ownership and management, including diverse assets such as transportation, power generation and distribution and real estate. The company recently held its annual Investor Day and presented compelling evidence that its stock price will double within five years. We view BAM as a core holding for all clients.

INTERTAPE POLYMER (ITP.TO)
Has been hit by a sharp rise in raw material costs, in part associated with the shortage of refinery capacity due to storm damage in Texas. This is a temporary problem which should resolve in 2018. In the meantime the company is seeing high demand for its products and should show good increases in both revenues and profits, again in 2018. The current low stock price presents an excellent entry level for new shareholders.

PRICELINE GROUP (PCLN.O)
One of the world’s leading travel booking sites, with a focus on Europe and Asia. Leisure travel is expanding rapidly particularly in those regions and Priceline is well placed to benefit. The stock price hit is currently down about 10 per cent from its all-time high, presenting an attractive entry point.
 

PAST PICKS:  JULY 7, 2016

WALT DISNEY COMPANY (DIS.N)

• Then: $98.41
• Now: $100.15
• Return: 1.76%
• Total return: 3.30%

KAR AUCTION SERVICES (KAR.N)

• Then: $41.52
• Now: $48.38
• Return: 16.52%
• Total return: 20.78%

FIRSTSERVICE CORP. (FSV.TO)

• Then: $57.28
• Now: $83.80
• Return: 46.29%
• Total return: 47.82%

TOTAL RETURN AVERAGE: 23.96%
 

TWITTER: @davidbaskinBWM
WEBSITE: www.baskinwealth.com