FOCUS: Global Equities

Market Outlook:

The Price-Earnings ratio for the major indexes (S&P 500, TSX, Euro600) all exceed 23 times, which often signals a market peak. Given that top-line revenues aren’t rising enough to increase earnings substantially (causing operating margins to fall), second-quarter results may disappoint. If this occurs, the market could face another correction.

As a result, any new purchases that I’m making are only ½ positions, meaning if the full allocation is $10,000, I’m only buying $5,000 worth and keeping the rest in cash. If the market continues to rise higher, the clients will participate. If the market falls, cash is available to buy at lower prices. I’d rather make 0.5 percent in cash than lose 10 percent in the market.

TOP PICKS:

Paddy Power Betfair PLC (PPB ID) 

It provides online betting and gaming products in the UK, Italy and Australia. Compared to its peer group, Paddy Power has the strongest on-line presence, which has provided stronger cash flows and growing dividends. Profitability should be helped by higher betting volumes in 2016 when the Summer Olympics begin in Rio de Janeiro. It was last purchased on March 23rd at 117.00 Euros.

AmerisourceBergen (ABC.N)

t is a healthcare distributor of generic and over-the-counter products to hospitals, doctor’s offices, veterinary clinics and pharmacies worldwide. The company is currently experiencing headwinds from a decline in generic brand price inflation and the 2016-17 overhang of stock warrants being exercised by its partner, Walgreen Boots Alliance. For patient investors, the stock is worth buying today for future growth in 2018 and beyond. It was last purchased on March 23rd at $ 87.08.

Fairfax Financial (FFH.TO)

It owns property and casualty and reinsurance subsidiaries. A lot of them were purchased as turnaround targets and now are quite profitable. The kicker, however, remains the deflationary bet the company has made, whereby their $1 billion bet on deflation could prove to make them over $100 billion if the economies of the world continue their deflationary slide. As a result, Fairfax investors own a natural hedge to any stock market collapse. It was last purchased on March 23rd at $711.73.

​
Disclosure Personal Family Portfolio/Fund
PPB Y Y Y
ABC Y Y Y
FFH Y Y Y

Past Picks: Jan. 15, 2016

Dassault Systemes (DSY FP)

Recommended at: Now at: Change Total Return
€64.49 €70.78 +9.75% +9.75%

Atrion Corp. (ATRI.O)

Recommended at: Now at: Change Total Return
$356.45 $392.25 +10.04% +10.30%

Jardine Matheson (JM SP)

Recommended at: Now at: Change Total Return
S$52.90 S$55.85 +5.58% +7.60%

 

Total Return Average : -+9.22%

Disclosure Personal Family Portfolio/Fund
DSY Y Y Y
ATRI Y Y Y
JM Y Y Y