Geoff Scott, institutional portfolio manager at Cambridge Global Asset Management
FOCUS: North American equities
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MARKET OUTLOOK

We enter 2018 with a conservative posture across our portfolios. While economic growth has accelerated and we are seeing a synchronized global expansion for the first time in years, this positive bias is reflected in valuations, making opportunities for attractive risk-reward opportunities more difficult to find. Central bankers are also aware of the improved environment and have begun to tighten monetary policy by either raising interest rates or slowing asset purchases through their respective quantitative easing programs. There is heightened risk that this withdrawal of stimulus will not be a smooth process and equity market volatility will not remain near all-time lows. We will remain disciplined to our bottom-up fundamental investment process and focused on delivering strong risk adjusted returns to our clients.  

TOP PICKS

PRAXAIR (PX.N)
The company recently closed on the mega-merger with European peer Linde and upon regulatory approval, can apply their industry leading operational expertise to the new platform. These operational improvements should lead to significant margin expansion at the combined entity and create tremendous value for shareholders. 

MIDDLEBY CORP. (MIDD.O)
They design, manufacture, and service kitchen equipment for commercial and residential applications. Management has a great historical track record of allocating capital effectively into organic and acquisition growth opportunities, as well as demonstrating to their customers the value of their products. 

TOURMALINE OIL (TOU.TO)
We see these issues resolving themselves as the market rebalances – gas production can’t be supported at current prices, takeaway capacity is coming online, and demand continues to grow. We remain confident in the management team, the business model, and continue to see them as a low-cost operator in Canada that is well-positioned to capitalize on the challenging environment.

NO PAST PICKS — FIRST APPEARANCE ON MARKET CALL

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