Rick Stuchberry, portfolio manager at Wellington-Altus Private Wealth
Focus: Canadian large-caps and international ADRs

MARKET OUTLOOK

We think the market is likely to go sideways through the summer and consolidate the gains in place. The secular market trend remains strong and we should see the market continue higher over time. As there are few financial investment alternatives to stocks, the market has been in melt-up mode to start the year.

Earnings have come in line with expectations, company balance sheets continue to look good, the consumer south of the border has low leverage and generally things look good for the longer term. U.S. unemployment is at a 50-year low at 3.6 per cent and even at this point in a hot economy the country just added over 250,000 jobs last month.

In our view, the single most important market event is the Fed keeping interest rates low. This is actually beneficial to stocks. It creates a real TINA (there is no alternative) situation that generally pushes stocks higher as the most likely asset class to earn a higher return. By keeping interest rates lower for longer, the Federal Reserve has effectively done its best to prevent downside in the stock market. This is a positive thing in the short term, but over the longer term it will be hard to take away.

TOP PICKS

Rick Stuchberry's Top Picks

Rick Stuchberry of Wellington-Altus Private Wealth shares his top picks: Box, Spin Master and Enerplus.

BOX (BOX.N)

Is a cloud content management company, that provides data management for fortune 500 companies. It has a clean balance sheet and solid revenue growth in a growing underlying business of outsourced data management. The company effectively operates breakeven on cashflow, so it should be a matter of time for growth toe enhance profitability.

SPINMASTER (TOY.TO)

The Toys R Us bankruptcy is effectively behind Spinmaster and the difficult 2018 is in the past. Both Mattell and Hasbro have outperformed on their quarters and we expect Spinmaster to restart its organic growth. Its balance sheet is clean and it has a powerful growth by acquisition model. The Balance Sheet is even stronger than this time last year as the company grew its cash balance in 2018.

ENERPLUS (ERF.TO)

Enerplus was one of the first midcap energy companies to clean its balance sheet when energy prices failed in 2015. Its debt load is half what it was at the onset of the decline in oil prices, it now has an incredibly safe corporate structure and provides a conservative vehicle for future growth in the energy market. It is entirely possible it could hike its dividend if the company chose to go down that path.

 

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
BOX  Y Y Y
TOY Y Y Y
ERF Y Y Y

 

PAST PICKS: APRIL 23, 2018

Rick Stuchberry's Past Picks

Rick Stuchberry of Wellington-Altus Private Wealth reviews his past picks: Royal Bank, Tencent and Alimentation Couche-Tard.

ROYAL BANK (RY.TO)

  • Then: $97.98
  • Now: $106.42
  • Return: 9%
  • Total return: 14%

TENCENT (TCEHY.PK)

  • Then: $50.43
  • Now: $47.76
  • Return: -5%
  • Total return: -5%

ALIMENTATION COUCHE-TARD (ATDb.TO)

  • Then: $54.05
  • Now: $78.53
  • Return: 45%
  • Total return: 46%

Total return average: 18%

 

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
RY Y Y Y
TCEHY Y Y Y
ATDb  Y Y Y

 

FUND PROFILE

Custom Managed Growth Account Composite
Performance as of: April 30, 2019

  • Year-to-date: 16.3% fund, 16.9% index
  • 1 year: 9.9% fund, 9.6% index
  • 3 years: 12.9% fund, 9.1% index

INDEX: TSX total return.
Returns are based on reinvested dividends, net of fees and annualized.

WEBSITE: Stuchberrygroup.ca
TWITTER: @stuchberrygroup