Hap Sneddon, chief portfolio manager and founder at Castlemoore
Focus: Technical analysis

MARKET OUTLOOK

Markets have been batted about by trade concerns between China and the U.S. and the U.S. and Europe amidst slowing economic numbers. It’s not quite clear how much trade and economics are related at this point.

Consumers globally, particularly in Canada and the U.S., are doing quite well. Inflation is benign and central banks are a tailwind. The only mother of the markets is liquidity: until it becomes restricted, equities will move higher.

The top ranked sectors on the mid-term look are utilities, staples, discretionary, technology and gold producers. Dropping down to the shorter term, materials and healthcare, including biotech and mining, come into the picture as well.

TOP PICKS

Hap Sneddon's Top Picks

Hap Sneddon, founder and chief portfolio manager of Castlemoore, shares his top picks: Healthcare Leaders Income Fund, OpenText and Premium Brands International.

HEALTHCARE LEADERS INCOME FUND (HHL.TO)
Last purchased May 24, 2019 at $7.53.

This is a great way to play the healthcare sector if you want to net away the currency exposure (we anticipate a rise in the loonie over the next year), reduce volatility and receive a decent monthly income. Healthcare is not only in a long-term secular bull market, but it’s also timely right now from both a seasonal and technical perspective. 

OPEN TEXT (OTEX.TO)
Last purchased on April 2, 2019 at $51.29.

Open Text, the largest enterprise software company in Canada and frequently a rumoured takeover target, recently reported decent earnings, including increasingly favourable cash flow. While perennially growing through acquisitions, the company has also shown a robust recurring internal revenue stream and general organic growth. Technically, the stock displays strong relative strength against both the TSX and the S&P.

PREMIUM BRANDS (PBH.TO)
Last purchased May 22, 2019 at $85.45.

Premium Brands, a specialty food manufacturer, distributor and wholesaler, recently came off a technical bottom following some poor results. We think the poor earnings are temporary and overblown. The stock broke out of a short-term bottom that sees no resistance until $105 following news of a significant investment by the Canada Pension Plan Investment Board.

 

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
HHL Y Y Y
OTEX Y Y Y
PBH Y Y Y

 

PAST PICKS: JAN. 10, 2019

Hap Sneddon's Past Picks

Hap Sneddon, founder and chief portfolio manager of Castlemoore, reviews his past picks: Bombardier, Teck Resources and CGI Inc.

BOMBARDIER (BBDb.TO)

  • Then: $2.03
  • Now: $2.21
  • Return: 9%
  • Total return: 9%

TECK RESOURCES (TECKb.TO)

  • Then: $29.39
  • Now: $28.77
  • Return: -2%
  • Total return: -2%

CGI INC (GIBa.TO)

  • Then: $83.50
  • Now: $100.73
  • Return: 21%
  • Total return: 21%

Total return average: 9%

 

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
BBDb N N Y
TECKb N N Y
GIBa Y Y Y

 

WEBSITE: castlemoore.com
TWITTER: @CastleMoore
PERSONAL TWITTER: @Hap_Sneddon