Don Lato.
Don Lato is president of Padlock Investment Management. His focus is on North American equities.
Top picks:
Apple
Apple has reacted very favourably to the news that Carl Icahn has recently established position with the key to maintaining the momentum being the September 10th product update. Apple's valuation remains very attractive at current levels even with reduced earnings estimates and is poised to benefit as sentiment improves with the new product cycle.
Tricon Capital
This Canadian company manages portfolios of U.S. single-family rental properties with both its own capital and on behalf of outside investors. Tricon has recently closed a financing which essentially doubled the size of the company – the proceeds being used to purchase the majority of one of its managed funds. Very attractive 4-per-cent yield.
Canadian Natural Resources
CNQ has spent the last couple of years in the penalty box due to various operating issues. The company has also suffered from widening heavy oil differentials last year and earlier this year but that differential has now narrowed allowing easier comparisons over the next few quarters. Renewed interest in Canada's oil sands producers and firmer natural gas prices could serve as the catalyst to higher prices for this well diversified oil and gas producer.
Past Picks: August 13, 2012
Agrium
Then: $95.53
Now: $94.07
Total return: +0.04 per cent
Canadian Natural Resources
Then: $30.07
Now: $31.43
Total return: +6.11 per cent
Poseidon Concepts (Delisted 02/14/2013)
Then: $14.96
Delist date: $0.27
Total return: +98.12 per cent
Total return average: -30.66 per cent
Market outlook:
I remain constructive on the equity markets for the balance of the year. The market continues to climb the proverbial "Wall of Worry" as valuations remain attractive, monetary conditions (for the moment) remain favourable and psychology is far from euphoric. Investors will have to be more selective and look at well-valued companies that continue to have the ability to grow earnings through the sluggish but growing economy. Markets could be somewhat unsettled near term as the Fed moves away from quantitative easing but any weakness could provide an excellent entry point for the medium to longer term.