Wolfgang Klein, portfolio manager at Canaccord Genuity Wealth Management
Focus: North American large caps

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MARKET OUTLOOK

I'm underweight cash and bonds and overweight U.S. stocks, specifically American financials, tech and consumer discretionary. I believe a recession is several years away and, as such, equity markets risk is to the upside. We're living in the greatest credit expansion in history thanks to low interest rates and this is fueling record share buybacks. Earnings are expected to be $160 in the U.S. this year, so at 18 times earnings that equals to an S&P level of 2,880. At 20 times, it implies an S&P 500 value of 3,200. Global growth continues along at a 4 to 5 per cent clip while the U.S. grows at 3 per cent. Rates do stay lower for longer, but as we all know, they've begun their assent higher. Yes, there's better value in Europe and the emerging markets and I'm exposed to those markets with a 10 per cent weighting, but I continue to make the lion’s share of my money in U.S. technology and momentum names.

TOP PICKS

Wolfgang Klein's Top Picks

Wolfgang Klein, portfolio manager at Canaccord Genuity Wealth Management, shares his top picks: Facebook, Newell Brands and BlackRock.

FACEBOOK (FB.O)

A core holding for my Growth and Balanced mandates, the company grows revenue and bottom line at high double-digit levels yet trades and a very reasonable 26 times forward earnings. The company has several levers it can pull to increase revenue, including Instagram, Messenger and WhatsApp. With over two billion active monthly users and growing, Facebook is one of the world’s most powerful advertising companies, with only one real online competitor: Google.

NEWELL BRANDS (NWL.N)

A holder of a myriad of consumer brands including Coleman, Sharpe, Bicycle Playing Cards, Ugly Stick,  Rubbermaid and  Graco to name a few. Through its acquisition of Jarden the company took on a bit more debt than the market cared for.  Add to it some weather woes and integration risk and the market has gone cold on a cash flow machine. Trading at 10 times earnings and sporting a dividend greater than 3% this deep value play is a buy and hold until it unfolds story.  Add to it Carl Icahn has taken large stake in the company. This activist shareholder has done much of the heavy lifting for me.

BLACKROCK (BLK.N)

As the world goes passive, BlackRock is a way to expose yourself to the lazy investor. Don’t fight the trend: funds are challenged and ETFs are the new order — for now, anyways. BlackRock is the world’s largest provider of passive ETF investments. It isn't cheap, but quality in favor is never cheap. At 18 times earnings sporting a 2 per cent dividend, you're getting a market multiple on a company that should continue to outgrow the broad market.

 

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
FB Y Y Y
NWL Y Y Y
BLK Y Y Y

 

PAST PICKS: MAY 28, 2018

Wolfgang Klein's Past Picks

Wolfgang Klein, portfolio manager at Canaccord Genuity Wealth Management, reviews his past picks: MSCI, Moody's and Alphabet.

MSCI (MSCI.N)

  • Then: $159.34
  • Now: $170.07
  • Return: 7%
  • Total return: 7%

MOODY'S (MCO.N)

  • Then: $174.03
  • Now: $172.55
  • Return: -1%
  • Total return: -1%

ALPHABET (GOOGL.O)

  • Then: $1084.08
  • Now: $1165.23
  • Return: 7%
  • Total return: 7%

Total return average: 4%

 

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
MSCI Y Y Y
MCO Y Y Y
GOOGL Y Y Y

 

FUND PROFILE

Wolf on Bay Street Growth Mandate
Performance as of: May 31, 2018

  • 1 Month: 3.3% fund, 3.1% index
  • 1 Year: 17% fund, 7.76% index
  • 3 Years: 12% fund, 5.54% index

* Index: S&P/TSX Comp.
** Returns provided are gross of fees and net of transaction costs.

TOP 5 HOLDINGS AND WEIGHTINGS

  1. Facebook: 5.4%
  2. Blackrock: 4.06%
  3. Amazon: 3.7%
  4. Google: 3.4%
  5. Suncor: 3.03%

TWITTER: @CGWM_wolfonbay
WEBSITE: www.wolfgangklein.com