Full episode: Market Call Tonight for Monday, April 22, 2019
Gordon Reid, president and CEO of Goodreid Investment Counsel
Focus: U.S. equities
While Goodreid believes that the fourth quarter correction was overdone, we’re somewhat surprised by the dramatic snapback that we witnessed in the first quarter of 2019. The rally has been largely spurred by a reversal in approach by the U.S. Federal Reserve. This year could well see a more tepid economic and corporate performance but, in a reversal from 2018, market performance may surprise to the upside.
Latest purchase on April at $37.
Backlogs are rising for Ciena even in an environment of 20 per cent revenue growth in each of its geographies. This optical networking systems company is taking market share and counts Google, Facebook and Amazon among its customers.
CVS HEALTH (CVS.N)
Latest purchase on April at $54.
CVS has been out of favour, but Goodreid is excited for their future. The $70-billion Aetna merger was completed late last year and will increase customer touch points. With over 10,000 storefronts, they have a presence within three miles of 70 per cent of the American population. Their plan is to be a health solution, offering insurance, medical consultation and prescription and over-the-counter products.
Latest purchase on April at $440.
Household formations are trending higher and the recent interest rate pause is giving housing a boost. Combined with high employment numbers, strong consumer confidence and a push to advance real wage growth, Sherwin-Williams is in a sweet spot. Their Valspar purchase two years ago is now fully integrated and earnings are advancing at a rapid 12 per cent rate.
PAST PICKS: APRIL 25, 2018
- Then: $246.90
- Now: $195.95
- Return: -20.62%
- Total return: -19.64%
UNITED RENTALS (URI.N)
- Then: $157.88
- Now: $135.46
- Return: -14.20%
- Total return: -14.20%
WALGREEN BOOTS ALLIANCE (WBA.O)
Sold on March 4, 2019 at $65.50.
- Then: $65.95
- Now: $54.10
- Return: -17.97%
- Total return: -16%
Total return average: -16.61%
Goodreid North American Balanced Composite
Performance as of: March 31, 2019
- 1 year: 4.1% fund, 4% index
- 3 years: 7.3% fund, 5.9% index
- 5 years: 6.6% fund, 4.3% index
Index: Equity Balanced Category Average.
Returns are based on reinvested dividends and are net of fees.
TOP HOLDINGS AND WEIGHTINGS
- Canadian equities: 32%
- U.S. equities: 37%
- Canadian fixed income: 19%
- Cash: 12%