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John Zechner. (Danny Yu)
John Zechner. (Danny Yu)

BNN Market Call

3 top stock picks from J. Zechner Associates’ John Zechner Add to ...

John Zechner is chairman of J. Zechner Associates. His focus is on North American large caps.

Top picks:

Crescent Point Energy Corp.
Crescent has a large and growing production base in highly-valued Bakken and Lower Shaunavon plays in Saskatchewan. It is well-financed after raising equity three times in 2012; it also pays a dividend with a current yield of more than 7 per cent.

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Barrick Gold Corp.
Gold stocks have dramatically under-performed the price of gold and the overall stock market over the past two years and look more under-valued than any time in the past 20 years. Barrick has re-focused on profitability and is expected to shed unprofitable assets, as well as reduce capital outlays and return more funds to shareholders.

Open Text Corp.
The company continues to grow in business process management with a strong product portfolio including more cloud-based services. It has strong distribution partners such as SAP and Oracle and has made good strategic acquisitions over the past few years. It generates substantial free cash flow and trades at only about 10 times current annual earnings.

Past picks: Dec. 28, 2011

Suncor Energy Inc.
Then: $28.56
Now: $34.41
Total return: +22.41 per cent

Uranium Participation Corp.
Then: $5.41
Now: $5.72
Total return: +5.73 per cent

Manulife Financial Corp.
Then: $10.45
Now: $14.46
Total return: +44.44 per cent

Total return average: +24.19 per cent

Market outlook:

We continue to be positive on the outlook for stocks as the global economic data rebounds. Stock valuations are at multi-year lows and investor sentiment remains subdued. We expect that increased corporate takeover activity, growth in corporate earnings and the continued ‘easy money’ policies of most of the world’s major central banks should support higher stock prices. Economically sensitive stock sectors such as technology, industrials, energy and basic materials make up our top choices.

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