Paul Gardner, partner and portfolio manager at Avenue Investment Management

FOCUS: REITS, Bonds, & Dividend Stocks

MARKET OUTLOOK:

The stock markets are euphoric going into the New Year. At one point there will be a correction, but with no large negative news on the horizon, Avenue believes we can see another leg up and see a further 10 per cent return going into the spring and summer. 

Interest rates will stay low. The bond curve is essentially locked down with the idea of curve steepening being put in place. S&P profitability will be strong despite the pandemic. We should see a sector rotation out of 2020 favorites such as the FANG stocks into value stocks. In this environment, commodities should do well and the TSX should finally outperform the U.S. markets after many years of underperformance.

TOP PICKS:

Paul Gardner's Top Picks

Paul Gardner, partner and portfolio manager at Avenue Investment Management discusses his top picks: Leon's Furniture, Boardwalk REIT and WPT Industrial REIT.

Leon’s Furniture (LNF TSX)

Boardwalk REIT (BEI-U TSX)

This multi-residential REIT is very undervalued. Most of its apartments are in Calgary and Edmonton, so Boardwalk is sensitive to the general economy of Alberta. With oil stabilizing and actually going up in value, the economy will continue to recover. The REIT trades at a 15 per cent discount to its net asset value (NAV) and during the

WPT Industrial REIT (WIR-U TSX)

The second theme in the REIT sector beyond apartments is the industrial space. WPT invests in U.S. industrials all across the nation. The pandemic has heightened the need for remote working and online businesses. Logistic companies and retail stores are now more online and need warehouse space. These businesses are increasing their industrial real estate space due to online shopping, favouringthe industrial space. WPT trades at NAV, but the sector should trade at a premium. The REIT yields a healthy 5 per cent.

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
 LNF TSX Y   Y   Y 
 BEI-U TSX Y   Y  Y
 WIR-U TSX Y  Y  Y 

PAST PICKS: January 29, 2020

Paul Gardner's Past Picks

Paul Gardner, partner and portfolio manager at Avenue Investment Management discusses his past picks: Cargojet, Berkshire Hathaway and Apple.

Cargojet (CJT TSX)

  • Then: $116.34
  • Now: $215.18
  • Return: +85%
  • Total Return: +86%

Boardwalk REIT (BEI-U TSX)

  • Then: $47.89
  • Now: $34.75
  • Return: -27%
  • Total Return: -25%

Berkshire Hathaway (BRK/B NYSE)

  • Then: $224.50
  • Now: $232.94
  • Return: +4%
  • Total Return: +4%

Total Return Average: +22%

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
 CJT TSX  Y  Y  Y
 BEI-U TSX  Y  Y  Y
 BRK/B NYSE  Y  Y  Y