Greg Newman, senior wealth advisor and portfolio manager at Scotia Wealth Management
Focus: North American dividend stocks and protection strategies

MARKET OUTLOOK

Since the March lows there have been two major rallies: The work-from-home rally with stocks like Amazon and the technology space and more recently, the anticipated re-opening rally of almost everything else until the implosion this week. This pull back aside, many are still scratching their heads wondering how stocks can advance in this climate. In short, I believe the market is telling us that economies will not shut down to the same extent again due to COVID-19, almost not mattering what comes next.

Add to this the mix of endless liquidity, physical stimulus, the Fed eliminating tail risk temporarily (on companies that would have otherwise likely defaulted), the TINA (there is no alternative) factor and you have this impressive move since late March. That said, many stocks are still overbought and a great many have limited visibility. Also if the Democrats win, the recent corporate tax cuts could change, which could have an enormous impact on earnings, a very great threat to the market.

We continue to see the landscape as divided into four different types of companies: those that benefit from the new trends, those largely unchanged, those that survive but do not thrive in a post-COVID world and those that one should be careful of approaching from an equity perspective. Try and buy groups 1 and 2 when they are mispriced and buy group 3 when they’re severely mispriced. Generally, avoid type 4 until some earnings visibility returns, unless it is perhaps for a short-term trade.

TOP PICKS

Greg Newman's Top Picks

Greg Newman of Scotia Wealth shares his top picks: Intact Financial, Brookfield Infrastructure and Alphabet.

INTACT FINANCIAL (IFC TSX)

It offers investors attractive and visible earnings growth at a compelling multiple with a decent dividend and unpriced acquisition upside.

BROOKFIELD INFRASTRUCTURE PARTNERS (BIP-U TSX)

It offers investors attractive earnings growth at a compelling multiple with a nice dividend and dividend growth.

ALPHABET (GOOG NASD)

Google offers investors an attractive growth profile at still a reasonable multiple.

 

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
IFC Y Y Y
BIP-U Y Y Y
GOOG Y Y Y

 

PAST PICKS: JUNE 18, 2019

Greg Newman's Past Picks

Greg Newman of Scotia Wealth reviews his past picks: Restaurant Brands, Intact Financial and Citigroup.

RESTAURANT BRANDS INTERNATIONAL (QSR TSX)

  • Then: $68.37
  • Now: $56.13
  • Return: -18%
  • Total return: -16%

INTACT FINANCIAL (IFC TSX)

  • Then: $122.80
  • Now: $131.26
  • Return: 7%
  • Total return: 9%

CITIGROUP (C NYSE)

  • Then: $67.98
  • Now: $51.62
  • Return: -24%
  • Total return: -22%

Total return average: -10%

 

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
QSR Y Y Y
IFC Y Y Y
C Y Y Y

 

Website: http://www.newmangroup.ca