Paul Harris, partner and portfolio manager at Avenue Investment Management
FOCUS: North American and global equities

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MARKET OUTLOOK

The global economy continues to grow, albeit at a slower pace than anticipated at the beginning of the year. We’re also seeing strong earnings growth and topline revenue growth and not the deterioration in margins that some have been expecting. After a volatile last few months, valuations are more reasonable at 16.5 times on the S&P. Although we see coordinated global growth, it should be at the 2 to 2.5 per cent levels with low inflation. The yield curve continues to flatten, which continues to indicate moderating long-term growth and inflation. This economic environment bodes well for stock longer term. In the short term, we may see great volatility as inflation or yields move higher. We would see this as a buying opportunity. 

TOP PICKS

Paul Harris' Top Picks

Paul Harris of Avenue Investment shares his top picks: Dollar Tree, FirstService and CN Rail.

DOLLAR TREE (DLTR.O)

Dollar Tree operates discount variety stores offering merchandise at a fixed price. The company has 14,334 stores in 48 states and in Canada. The stock trades at 12 times 2019 earnings, 9.0 EV/ EBITDA and a free cash flow yield of 5.7 per cent.

FIRSTSERVICE CORP (FSV.O)

FirstService was recently spun out of Colliers International. The company focuses on residential property management and services. It has room to grow market share in the U.S. in what remains a very fragmented business. Trades at 31 times next year’s earnings and yields 0.70 per cent.

CN RAIL (CNR.TO)

CN is aa rail and related transportation business with 20,000 route miles of track spanning Canada and mid America. The stock trades at 18 times 2018 earnings and has a yield of 1.64 per cent.

 

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
DLTR Y Y Y
FSV Y Y Y
CNR Y Y Y

 

PAST PICKS: MAY 1, 2017

Paul Harris' Past Picks

Paul Harris of Avenue Investment reviews his past picks: CVS Health, Blackstone Group and Bank of America.

CVS HEALTH (CVS.N)

  • Then: $81.96
  • Now: $66.14
  • Reuters: -19%
  • Total return: -17%

BLACKSTONE GROUP (BX.N)

  • Then: $30.84
  • Now: $35.64
  • Reuters: 16%
  • Total return: 23%

BANK OF AMERICA (BAC.N)

  • Then: $23.61
  • Now: $29.67
  • Return: 26%
  • Total return: 28%

Total return average: 11%

 

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
CVS Y Y Y
BX Y Y Y
BAC Y Y Y

 

WEBSITE: www.avenueinvestment.com