Gordon Reid is the president and chief executive officer of Goodreid Investment Counsel. His focus is on U.S. equities.
The current market correction has been spawned by a resurgence of fears of European economic instability and a spotty corporate earnings season.
However, with U.S. Federal Reserve policies encouraging investors to own risk assets, expect markets to appreciate at a greater than normal rate over the next couple of years, albeit with considerable volatility.
Past picks: July 28, 2011
TR: -15.05 per cent
The Walt Disney Company
TR: +25.39 per cent
TR: -22.66 per cent
Total return average: -4.10 per cent
Deere & Co.
While somewhat counter intuitive, Deere could benefit from current drought conditions. Crop insurance will cover much of the anticipated losses, and the cycle will likely be extended because of the drought. All in all, with planted acreage on the rise, farmers worldwide are expected to do well over the long term.
Strong international operations are driving profitability at this Services and Equipment oil concern. North American margins should stabilize by year end leading to the likelihood of a 12 per cent earnings gain next year to about $3.75 per share. At that earnings level Goodreid anticipates strong stock price appreciation.
Hornbeck Offshore Services
Hornbeck is an offshore oil service transportation company, providing vessels to move equipment and supplies and to reposition drilling rigs. The industry is showing clear signs of having troughed as day rates and utilization rates are on the rise.