Gordon Reid, president and CEO of Goodreid Investment Counsel
Focus: U.S. equities

MARKET OUTLOOK

The correction we’ve 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 and the Fed will likely end the expansion by tightening rates to the point of forcing a recession sometime late next year or early 2020. The alternative is to allow inflation to take hold. For almost a year, we have slowly harvested gains in companies that benefit from strong economic conditions and transitioned into more defensive situations.

TOP PICKS

BANK OF AMERICA (BAC.N)
Latest purchase: November 2018 at $28.

Bank of America is benefitting from margin expansion, evidenced by a 6 per cent increase in net interest income in the most recent quarter. The wild card is loan growth, which is dependent on a strong consumer on the personal side and capital spending on the commercial side. Expenses are well managed. Trading at book value and 10 times earnings, this issue has significant upside.

DISNEY (DIS.N)
Latest purchase: November 2018 at $115.

The long-term outlook for Disney is solid, based on an outstanding legacy platform of media properties and of course their famous parks. Going forward, the pending tie-up with Twenty-First Century Fox will give them a coveted library and a controlling interest in streaming engine Hulu, which we believe will set up their next chapter, taking on Netflix in the streaming wars.

DYCOM (DY.N)
Latest purchase: October 2018 at $72.

Dycom is a telecom services company, capturing a large share of the massive amount of work to upgrade wireline networks to accommodate greater bandwidth. Recent financial reports showed lumpy results, as customers’ annual budgets and consolidation in the telecom space led to a pause in spending. What’s lost in the market’s reaction is the decades-long initiatives that will likely result in an annual over 15 per cent growth in earnings before interest and taxes for Dycom.

 

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
BAC Y N Y
DIS Y N Y
DY N Y Y

 

PAST PICKS: DEC. 19, 2017

APPLE (AAPL.O)

  • Then: $174.54
  • Now: $192.23         
  • Return: 10%
  • Total return: 12%

CITIGROUP (C.N)

  • Then: $74.70
  • Now: $64.78
  • Return: -13%
  • Total return: -11%

PIPER JAFFRAY (PJC.N)

  • Then: $80.70
  • Now: $70.63
  • Return: -12%
  • Total return: -10%

Total return average: -3%

 

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
AAPL Y N Y
C Y N Y
PJC N Y Y

 

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: Sep. 30, 2018

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

Index: Globe Canadian Equity Balanced Peer Index Average.
Returns are net of fees.

TOP HOLDINGS AND WEIGHTINGS

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

WEBSITE: https://www.goodreid.com