Ross Healy, chairman of Strategic Analysis Corp and portfolio manager at MacNicol & Associates Asset Management
Focus: North American large caps

Market Outlook

There are many reasons to look at the long-term outlook for the market – and values therein – but right now, most investors are interested in the shorter term. And the short term is bullish. The leadership is the key to this market and while it may be a bit narrower than one would like, it is persistent and strong. For now, it feels like the S&P 500 is trying to make its way to the same valuation peak in price-to-book terms that it did in 2000. That is 9 to 13 per cent away from current levels, which may seem not that far away, but an astonishing lot can happen when a market is peaking. Among other things, we have a massive horde of players entering the market for the first time who are making a mockery of any common-sense approach that you or I could conjure up. They will learn, but not now.

I would like to give you our target value, but the second quarter has just ended and in the next six weeks there will be a flood of balance sheets which will change our target price, very likely in a substantial way. If I’m back on the show towards the end of August or in early September, I should have a fix on that value for you.

Top Picks

Manulife Financial (MFC TSX)

Alamos Gold (AGI NYSE)

Pembina Pipeline (PPL TSX)

Past Picks: July 11, 2019

Newmont Corporation (NEM NYSE)

• Then: $39.28
• Now: $62.22
• Return: 58%
• Total Return: 61%

Valero Energy (VLO NYSE)

• Then: $84.43
• Now: $57.23
• Return: -32%
• Total Return: -29%

Manulife Financial (MFC TSX)

• Then: $23.99
• Now: $19.14
• Return: -20%
• Total Return: -16%

Total Return Average: 5%

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Website: www.Strategicanalysis.ca
Blog: The Occasional Contrarian