David Driscoll is partner with Toron Capital Markets. His focus is on global equities.
Amerisource is in the logistics business for the pharmaceutical companies. It packages and delivers drugs and instruments to hospitals and doctors offices. I like it because the returns on equity and capital are large and, compared to the pharmas, there's no litigation, nor patent protection risks. They have just begun expanding outside the United States which should help grow profits and its share price.
(Symbol COH on Australian Stock Exchange)
Cochlear manufactures cochlear implants for the hearing aid industry. One in six people in the world suffer from some sort of hearing loss. Hearing aids and implants help those to communicate in the world. Unlike its major competitor, Sonova, Cochlear leads in sales growth in the Asia Pacific region where revenue and profit growth should be better than in Europe or North America.
Uni-Select is the sixth-largest automotive parts distributor in North America. I like the company because its recent acquisitions have helped spur its revenue growth and better cost management has ensured better profit growth. At 8 times earnings, the stock is undervalued relative to the overall TSX index that trades at 14 times earnings.
Past Picks: March 31, 2011
Jardine Matheson (Symbol JM on the Singapore Exchange)
Then: $44.54 Singapore dollars
Total return: +17.53%
Total return: +17.16%
Total return: -25.41%
Total Return Average: +3.09%
After a massive stock market rally from October, 2011 to March, 2012, a slowdown in corporate earnings growth will probably cause the stock market to correct in the coming weeks. The magnitude will depend on the extent of continued concerns over U.S., European and Chinese economies. With GDP growth marginal, thanks to de-leveraging (debt reduction by individuals and governments) real stock returns (after taxes, inflation and fees) project to be in the low single digits for the coming years. As a result, investors should have some cash available to take advantage of buying opportunities as they are presented and own stocks that are cash rich and debt-free. They'll be the ones able to take advantage of acquisition opportunities to grow their market share.
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Compiled by Franklin Cameron, BNN Market Call Tonight
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