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

MARKET OUTLOOK

Defensive equity issues are fading as two powerful forces take hold. First, the economy appears to be getting its second wind, leading to a resurgence of cyclical issues. Secondly, the “growth” part of the market has prevailed for most of this cycle and is looking expensive and tired. Conversely, value issues are far less expensive.

TOP PICKS

Gordon Reid's Top Picks

Gordon Reid of Goodreid shares his top picks: AbbVie, Citigroup and Raytheon.

 ABBVIE (ABBV:UN)
Latest purchase in November 2019 at $88.

AbbVie is making a bold acquisition, purchasing Allergan in a $63-billion deal. The benefits are numerous, from a reduction in product concentration to huge financial growth projections. Layer on the cost synergies and immediately accretive earnings expectations and, at less than 10 times earnings with a dividend yield of 5 per cent, this is a very attractive opportunity.

CITIGROUP (C:UN)
Latest purchase in November 2019 at $72.    

Management has done an excellent job of bringing this bank back to respectability. They have simplified the balance sheet, improved credit quality, and successfully passed stress tests to allow for a resumption of dividends and buybacks. As the likelihood of an extension of this economic cycle strengthens, banks will be a beneficiary. Trading at tangible book value and less than 10 times earnings makes Citigroup a compelling holding.

RAYTHEON (RTN:UN)
Latest purchase in November 2019 at $216.

Raytheon and United Technologies are merging. By purchasing Raytheon, Goodreid clients avoid messy spin-offs of Otis and Carrier. Investors are left with a powerful industrial, led by commercial and defence divisions. When the dust settles, investors will own a stable earnings grower, with the likelihood of doubling the growth of the market priced at a market multiple. Very good value.

 

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
ABBV Y N Y
C Y N Y
RTN Y N Y

 

PAST PICKS: NOV 13, 2018

Gordon Reid's Past Picks

Gordon Reid of Goodreid reviews his past picks: Bank of America, Disney and Dycom.

 BANK OF AMERICA (BAC:UN)

  • Then: $27.76
  • Now: $33.42
  • Return: 20%
  • Total return: 23%

DISNEY (DIS:UN)

  • Then: $116.85
  • Now: $151.48
  • Return: 30%
  • Total return: 31%

DYCOM (DY:UN)

  • Then: $69.92
  • Now: $52.16
  • Return: -25%
  • Total return: -25%

Total return average: 10%

 

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

 

WEBSITE: www.Goodreid.com