Paul Harris.
Paul Harris is a partner and portfolio manager at Avenue Investment Management. His focus is on North American and global equities.
Top Picks:
TD Bank
We believe TD's strategy of growing its retail operations in the U.S. will be very effective over the long run. The recent purchases have been astute which will help earnings over the next few years. The stock trades at 10 times earnings and 1.6 times P/BV and has a 4.0-per-cent yield.
SunTrust Banks
SunTrust is a commercial and retail bank in the southeast United States. The stock trades at .8 times book value and an 11 times earnings. The company will benefit from a continuing improvement of the U.S. housing market and a continued reduction in cost.
BCE
BCE has fallen due to increases in interest rates and the entrance of Verizon into Canada. The company is well run and recent purchases will start to add to earnings. The stock yields 5.3 per cent and has a free cash flow yield of 8 per cent. BCE is moving back to being a utility and capex and other metrics are going back to historical levels. The stock trades at 13 times earnings.
Past Picks: June 18, 2012
Davis+Henderson
Then: $16.40
Now: $23.10
Total return: +48.80 per cent
Hewlett-Packard
Then: $21.05
Now: $24.63
Total return: +20.45 per cent
Bank of America
Then: $7.76
Now: $12.98
Total return: +67.88 per cent
Total return average: +45.71 per cent
Market outlook:
We believe the tremendous amount of sovereign debt outstanding globally will lead to slower growth around the world over the next several years. This will keep rates low for an extended period of time and inflation will be benign. In this environment we look for companies with a strong balance sheet and growing dividends