Jim Huang, president of T.I.P. Wealth Manager
Focus: North American equities
Investors continue to bet heavily on the potential pro-growth policies from the Trump administration such as tax reform, infrastructural spending and deregulation. Major indices hit successive new highs and realized volatilities are at historical lows. This is despite the developing realization that with the multiple distractions present, many of these potential changes may be delayed or might not happen, even with Republican control of both chambers of Congress. Meanwhile, a higher interest rate is a reality and the economic expansion has been long in duration, and further stimulus at this stage may well accelerate the peak and subsequent valley. In other words, things are good in the financial market, but portfolios should embrace the short-term strength yet be aware of over-exuberance.
DIRTT ENVIRONMENTAL SOLUTIONS (DRT.TO) – March 2017 at $6.61
DIRTT (stands for “do it right this time”) is not your average prefabricated office furniture company. Founded by industry veterans including Mogens Smed, DIRTT uses its proprietary 3D software to seamless integrate the design, manufacturing and installation process, ensuring an on-time, on-budget experience. It is leveraging its network of partners to expand its reach globally, and to create solutions to new segments like health care, lodging and residential. With the drag from weaker energy industry orders lessening, DIRTT remains one of the best companies that grows organically in a big market.
INTERTAPE POLYMER GROUP (ITP.TO) – February 2017 at $21.99
Intertape Polymer is a manufacturer of a variety of tapes and films for industrial and retail uses. It has spent the last few years lowering its costs, in part by opening new, large-scale plants to replace older plants. It also enjoy the lower input costs from the shale natural gas production. Negative impact from the recent South Carolina flood should dissipate overtime. With a strong balance sheet, Intertape has the opportunity to selectively expand its footprints by acquiring smaller rivals and enhance shareholder value.
PAREX RESOURCES (PXT.TO) – January 2017 at $16.25
Parex is an oil and gas exploration and production company focusing in Colombia. It is led by management with good track records. Parex has been growing its production and reserves rapidly over the last few years due to its very successful exploration program. With its net cash position, Parex is a safe harbour in a volatile oil price environment, yet still provides great leverage to the upside due to its 100 per cent oil weighting.
PAST PICKS: MARCH 1, 2016
MAGNA INTERNATIONAL (MG.TO)
- Then: $53.13
- Now: $58.68
- Return: +10.44%
- TR: +13.92%
SLEEP COUNTRY CANADA (ZZZ.TO)
- Then: $19.17
- Now: $31.89
- Return: +66.35%
- TR: +69.82%
DIRTT ENVIRONMENTAL SOLUTIONS (DRT.TO)
- Then: $5.36
- Now: $6.70
- Return: +25%
- TR: +25%
TOTAL RETURN AVERAGE: +36.24%