Norman Levine, managing director of Portfolio Management Corp
Focus: North American large caps

MARKET OUTLOOK

History shows that panicking when stock markets collapse is the absolute wrong thing to do, with the Great Depression being the one exception. We’re not facing a depression. Corrections, bear markets, and crashes are all long-term opportunities, as any long-term chart will show you markets always recover and go on to new highs. Investors should be using the current turmoil to weed out stocks of companies whose fundamentals have deteriorated and their outlook is not as positive as expected. They should load up on quality companies whose outlooks remain excellent but whose share prices have declined substantially. One area of concern is the bond market, where yields near zero, meaning that owning bonds for the long-term will probably prove to be a losing proposition.

TOP PICKS

ENBRIDGE (ENB TSX)
Last purchased on March 11 at $43.18.

Enbridge is an energy infrastructure company with business platforms that include a network of crude oil, liquids and natural gas pipelines, regulated natural gas distribution utilities and renewable power generation. In essence, it is a regulated energy utility with relatively predictable earnings and a steadily increasing dividend, which currently offers a yield of approximately 7.5 per cent. The stock price has been hit more than it should have been as its shares are in many energy ETFs and as those were liquidated, shares have been dumped along with oil and gas company shares. This has created an extremely attractive buying opportunity.

SANOFI (SNY NASD)
Last purchased on July 7, 2016 at $41.

Sanofi is a French-based multinational healthcare company focused on pharmaceuticals and human vaccines. Like most other drug stocks have experienced, Sanofi recently faced a patent cliff, as many of its major drugs came off patent and its pipeline has been pretty bare. Historically, the best time to buy drug stocks is when nobody wants them. Sanofi currently has six promising drugs in the pipeline, some of which could prove to be blockbuster drugs.  Sanofi has a great balance sheet and is using that money to buy companies with promising new products. The company’s new CEO has identified Dupixent (eczema) and vaccines as it main growth areas. More important, its products are not economically sensitive for the most part so it and other pharmaceutical stocks are good to own during economic slowdowns. Sanofi is one of the largest vaccine companies in the world and it’s working on a coronavirus vaccine. An arthritis drug it owns with Regeneron is about to go into clinical trials as a possible treatment for COVID-19. The stock yields 2.7 per cent.

BERKSHIRE HATHAWAY (BRK/B NYSE)
Last purchased on Dec. 13, 2019 at $225.46.

Berkshire Hathaway is the ultimate value stock. Its operating companies are mainly in insurance, railways, energy, and manufacturing. Value stocks have underperformed growth and momentum stocks by a wide margin for the past three years and Berkshire’s stock has gone sideways for the past two years. The main negative on the stock is the ages of Warren Buffett and Charlie Munger. While the stock will likely suffer in the short term when one or both of them die, the major decision making at the company has been in the hands of others for some time. The big positive, Berkshire Hathaway is carrying about $130 billion in cash and is in an amazing position to take advantage of the current market decline.

PAST PICKS: APRIL 17, 2019

CENOVUS (CVE TSX)

• Then: $13.56
• Now: $3.45
• Return: -75%
• Total return: -74%

TRUIST FINANCIAL (BBT NYSE)
Formely BB&T Financial.

• Then: $49.84
• Now: $30.69
• Return: -38%
• Total return: -36%

NXP SEMICONDUCTORS (NXPI NASD)

• Then: $101.17
• Now: $91.99
• Return: -9%
• Total return: -8%

Total return average: -39%

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