John O'Connell, chairman and CEO at Davis Rea

Focus: North American large caps

MARKET OUTLOOK

We believe that markets will continue to react in the short-term to headlines on trade and interest rate policies. We feel that many good companies can be purchased at attractive valuations today and will provide for good returns over a five year time frame.

TOP PICKS

John O'Connell's Top Picks

John O'Connell of Davis Rea shares his top picks: JPMorgan Chase, Thermo Fisher Scientific and Walt Disney.

JPMORGAN (JPM:UN)

JPMorgan is a premier global financial services and retail bank. The company has always navigated difficult times well in the past. It has a three per cent yield and has grown at a 15 per cent rate for the past five years. We expect this growth rate to continue. The valuation of 11 times previous years earning is compelling valuation for long-term investors when one considers that a loan to the U.S. government pays half what owning one of the best run banks in the world pays.

THERMO FISHER SCIENTIFIC (TMO:UN)

Thermo Fisher Scientific is a world leading manufacturer of scientific instruments and the consumables for use in such instruments. Its global customers are governments, universities, hospitals and diagnostic labs, as well as the pharma and the biotech industry. The company has a long track record for double digit earnings growth. Its revenues are highly recurring.

WALT DISNEY (DIS:UN)

Walt Disney is the largest entertainment company in the world. It recently acquired 21st Century Fox allowing it to consolidate its ownership position of its soon to be launched Disney+ offering on a global basis. Disney is the owner of the most diverse library of entertainment content in the world with multiple ways to monetize that content with direct-to-consumer, theme parks, hotel and cruise lines, theater, TV and retail stores. Its dividend has grown at a 15 per cent rate for the past five years and can be expected to continue to deliver similar growth well into the future.

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
JPM Y Y Y
TMO Y Y Y
DIS Y Y Y

PAST PICKS: Sept. 18, 2018

John O'Connell's Past Picks

John O'Connell of Davis Rea reviews his past picks: Kelt Exploration, Scotiabank and Stanley Black & Decker.

KELT EXPLORATION (KEL:CT)

  • Then: $7.96
  • Now: $2.91
  • Return: -63%
  • Total return: -63%

SCOTIABANK (BNS:CT)

  • Then: $76.62
  • Now: $67.96
  • Return: -11%
  • Total return: -7%

STANLEY BLACK & DECKER (SWK:UN)

  • Then: $150.76
  • Now: $136.03
  • Return: -10%
  • Total return: -8%

Total return average: -26%

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
KEL Y Y Y
BNS N N N
SWK Y Y Y