Kash Pashootan, CEO and chief investment officer at First Avenue Investment Counsel
Focus: North American dividend stocks and portfolio construction

MARKET OUTLOOK

“… We went from needing a correction to getting a correction to now arguably needing another correction. Now that we’ve wrapped up Q1 and we’ve been able to take a look at earnings and EPS growth and see how the real numbers look, what we’re seeing compared to Q1 of last year [is that] revenue was basically flat whereas last year at this time we had revenue growth of 8 per cent and on the earnings per share side [we have a] similar picture … So we’re seeing a clear slowdown in growth. Combining that with where some of the valuations are and that’s what I think has portfolio managers increasing the probabilities of a correction, us included.”

TOP PICKS

CMS ENERGY (CMS.N) | 3% Yield | 23x P/E | May 2019

• Fully regulated utility with transparent cash flows.
• +7% EPS growth conservative with cost cuts, rate cases and new investments.

BROADCOM (AVGO.O) | 4.6% Yield | 16x FP/E | May 2019

• Pullback on trade tensions = long term buying opportunity.
• Dividend now yields 4.5% after +50% December hike.

TD BANK (TD.TO) | 4% Yield | 16x FP/E | May 2019

• Expect TD to continue taking market share in the U.S.
• U.S. earnings +30% for both Q1 & Q2.

PAST PICKS: JUNE 27, 2018

FIRST AMERICAN FINANCIAL GROUP (FAF.N)

• Then: $50.53
• Now: $50.56
• Return: 1%
• Total Return: 3%

CRACKER BARREL OLD COUNTRY STORE (CBRL.O)

• Then: $159.75
• Now: $163.28
• Return: 2%
• Total Return: 8%

COLUMBIA BANKING SYSTEMS INC. (COLB.N)

• Then: $41.31
• Now: $34.67
• Return: -16%
• Total Return: -13%

Total return average: -1%

TWITTER: @kashpashootan
WEBSITE: www.firstavenuecounsel.com