David Burrows, president and chief investment strategist at Barometer Capital Management

Focus: North American large caps
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MARKET OUTLOOK
The Barometer team was bullish and expecting a year-end rally coming into the U.S. election. They are focused on the four key leadership themes that were in place and improving relative to the market beginning in June. The team’s base case is an economic re-acceleration following a 2015 inventory correction in the U.S., which also pointed to a bottoming in long-term interest rates and inflation. Their portfolio holdings are largely concentrated in financials (banks, insurance companies, investment dealers and asset managers), industrials (aerospace, machinery and transports), technology (semis, cloud and Internet of things) and energy (infrastructure and low-cost producers). Barometer is avoiding utilities, telcos and REITs, which are likely to be challenged by slowly-rising bond yields.

TOP PICKS

In the financials, Barometer is invested in JPMorgan Chase & Co (JPM.N), one of the best-managed, largest banks in the world. As a major beneficiary of rising rates, an improving economy and potentially reduced regulation, JPM should be able to continue to grow earnings and dividends, which have risen 18 per cent per year over the last five years. Last bought on Oct. 25 for $68.82.

In technology, Barometer has long favoured Texas Instruments (TXN.O) as a means to participate in the growth of the Internet of things. TXN is a leader in custom designing and producing specialized, long-life semiconductors that enable autos, appliances and machines to connect to the Internet. Last bought on Nov. 21 for $73.49.

As a final top pick, Barometer highlights Ingersoll Rand (IR.N). IR's HVAC and compressor equipment business has contributed to earnings growth of 15 per cent annually over the last five years despite otherwise low levels of capital spending in the U.S. With a slowly-recovering domestic economy, likely fiscal stimulus and infrastructure spending, investors could benefit from both accelerated earnings growth and a higher earnings multiple (P/E). Last bought on Nov. 8 for $71.13.
 

PAST PICKS: NOVEMBER 2, 2015

PRICELINE GROUP (PCLN.O)

• Then: $1467.18
• Now: $1535.42
• Return: +4.65%
• TR: +4.65%

GENERAL ELECTRIC (GE.N)

• Then: $29.40
• Now: $31.18
• Return: +6.05%
• TR: +9.34%

COGNIZANT TECH SOLUTIONS (CTSH.O)

• Then: $68.43
• Now: $53.18
• Return: -22.28%
• TR: -22.28%

TOTAL RETURN AVERAGE: -2.76%