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Jason Donville.
Jason Donville.

BNN Market Call

3 top stock picks from Donville Kent’s Jason Donville Add to ...

Jason Donville is president and CEO of Donville Kent Asset Management. His focus is on growth and financial stocks.

Top picks:

Direct Cash Payments Inc.
The Calgary-based, global ATM company is integrating two recent acquisitions in Australia and England. Early signs suggest these two acquisitions are going to exceed expectations. The company boasts a dividend yield of 5.1 per cent and we expect it will raise its dividend as early as the third quarter of 2013.

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Constellation Software Inc.
This Toronto-based software company is on track for a huge 2013. We think the Street is light on its estimates for Constellation and that full-year cash earnings could exceed $260-million. Constellation enjoys a healthy 3.1-per-cent dividend and we expect that will be raised this year, perhaps as early as the upcoming AGM in May.

CGI Group Inc.
Montreal-based CGI Group, which is growing at close to 20 per cent per annum, trades at 8.2 times 2013 cash earnings, making it one of the cheapest large-cap growth stories in Canada. While the company does not pay a dividend, its aggressive share buyback should continue in 2013.

Past picks: May 7, 2012

Paladin Labs Inc.
Then: $42.21
Now: $48.35
Total return: +14.55 per cent

Jean Coutu Group (PJC) Inc.
Then: $14.63
Now: $15.25
Total return: +6.20 per cent

CGI Group Inc.
Then: $21.71
Now: $26.34
Total return: +21.33 per cent

Total return average: +14.03 per cent

Market outlook:

While we don’t see any particular macro risks on the horizon, we are entering a period of seasonal market weakness, and natural resource stocks appear particularly vulnerable. Now would be a good time for investors to sell their low-conviction holdings with the idea of building cash. Typically, the best time to deploy the cash on bargains is mid-summer.

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