Michael Smedley.Fred Lum/The Globe and Mail
Michael Smedley is executive vice-president and chief investment officer, Morgan Meighen & Associates. His focus is Canadian equities.
Top Picks:
Clearwater Seafoods Inc. (CLR-TSX)
Barriers to entry are about the highest in any business because of Clearwater's dominance in shellfish quota rights on the east coast of North America. Earnings multiple is about 18x earnings, probably declining to 14x on next year's earnings in a disturbed world where chomping on food brings a moment of much needed happiness.
Restaurant Brands International (QSR-NYSE)
This is an early stage and even a contrarian "drinking and chomping" stock, a combination that fascinates me in a world seeking happiness. The game is how will a couple of guys around thirty turn Tim Horton's and Burger King, a couple of brand giants, into a world leader, coffee being the biggest addiction known to mankind and BKW stunning the millennial generation with thicker, higher fat snacking, particularly in Eastern Europe.
Patient Home Monitoring (PHM-TSX-Venture)
This has doubled since purchase by the fund and by me and has keyed into the U.S. health industry push to get patients, particularly the elderly with chronic diseases, to get home treatment and relieve pressure and costs in the tired hospitals system. Patient Home Monitoring is growing rapidly by acquisition in the U.S. and is cash free positive.
Past Picks: January 13, 2014
The Middleby Corp (MIDD-Nasdaq) *Stock Split* June 27 2014: 3 for 1
Then: $243.89; Now: $95.92 +17.99%; Total return: +17.99%
Input Capital (INP-TSX-Venture)
Then: $2.20; Now: $2.60 +18.18%; Total return: +18.18%
Aurora Spine (ASG-TSX-Venture)
Then: $4.34; Now: $1.44 -66.82%; TR: -66.82%
Total return average: -10.22%
Market outlook:
Erratic behaviour should continue and most eyes will be on the new factor of a collapsed oil price which has decimated the oil and gas sector, and the descent likely still on for the Canadian dollar dealing a blow to Canadian confidence and at the same time improving some Canadian company revenues in the U.S. market. For some it will be a win; for others a wash or a loss. All we know is that everything is temporary and that stock investment will always require the astute touch, luck and patience or combinations of those and other factors as startlingly unknown as the collapse in oil to its current and probably perfectly rational level.