Gordon Reid, president and CEO of Goodreid Investment Counsel

Focus: U.S. equities

MARKET OUTLOOK

The correction we have been going through seems to be in its final stages as individual stocks show signs of extreme oversold conditions. That said, at Goodreid we believe times are changing. The strong economic conditions are forcing the hand of central bankers but the Fed may well react to slowing economic indicators and low inflation by slowing interest rate increases. Markets would react favourably and the economic cycle could be extended further than is now built into most models.

TOP PICKS

APPLE (AAPL.O)

Latest purchase in November 2018 at $217

Apple’s stock has suffered lately on the stories of an impending slowdown in unit sales for the iPhone. Look past the breathless reporting of impending doom. iPhone unit growth has been lumpy since its introduction. But a super-cycle on the back of 5G technology is a couple of years away. They have over one billion installed devices, a 93 per cent loyalty rate and service revenues are growing rapidly. Valuations are compelling.

FEDEX (FDX.N)

Latest purchase in November 2018 at $220

FedEx has over $70 billion in sales and is operating in more than 150 thousand ground vehicles and 650 aircraft. This company is currently dealing with a changing economic background with Europe and China struggling as trade wars take their toll. This has created an excellent entry point to this stock as the price-to-earnings (P/E) multiples are less than 11 times, not far from where FedEx traded at for the lows of 2008. Overdone in our opinion.

VISA (V.N)

Latest purchase in November 2018 at $139 

Revenues and earnings are growing very rapidly as the world moves to electronic processing in place of cash to settle transactions. International operations now account for 60 per cent of Visa’s transactions. Visa is the electronics leader by far and processes more transactions than all of its competitors combined.

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
AAPL Y N Y
FDX Y N Y
V Y N Y

PAST PICKS: JAN. 30, 2018

WALT DISNEY (DIS.N)

  • Then: $110.11   
  • Now: $110.84    
  • Return: 1%         
  • Total return: 2%

HEXCEL (HXL.N)

  • Then: $67.55     
  • Now: $58.07      
  • Return: -14%     
  • Total return: -13%

TIME WARNER (TWX.N)

Acquired by AT&T (T.N) for cash and stock on June 15, 2018

  • Then: $94.45     
  • Now: $98.77      
  • Return: 5%         
  • Total return: 5%

Total return average: -2%

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
DIS Y N Y
HXL N Y Y
TWX N N N

FUND PROFILE

Goodreid’s North American Balanced

Goodreid’s balanced approach allows investors to participate in the potential growth of equity holdings while mitigating risk through ownership of quality fixed income instruments.

Performance as of: Sept. 30, 2018

  • 1 year: 8.5% fund, 3.7% index
  • 3 year: 9.0% fund, 6.0% index
  • 5 year: 9.4% fund, 5.8% index

Index: Globe Canadian Equity Balanced Peer Index Average

Returns net of fees, dividend and annualized

TOP HOLDINGS AND WEIGHTINGS

  1. U.S. equities: 40%
  2. Canadian equities: 31%
  3. Canadian fixed income: 18%
  4. Cash: 11%

WEBSITE: goodreid.com