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BNN MARKET CALL

Three top stock picks from Scotia Wealth Management’s Greg Newman Add to ...

Greg Newman is director and associate portfolio manager at Scotia Wealth Management. His focus is Canadian dividend stocks.

Top Picks:

Algonquin Power & Utilities (AQN.TO)

Algonquin Power can offer investors a relatively defensive play on power generation, transmission and distribution that pays a solid, well-protected and growing dividend. With most of its business in the U.S., investors can also benefit from a powerful foreign exchange tailwind.

Killam Properties (KMP_u.TO)

Killam can offer investors shelter from the macro storm with its eastern and central Canada-focused apartment portfolio. It offers an attractive dividend while, we believe, the company is growing at an attractive rate. Buy this stock while it trades below its five-year average multiple.

Brookfield Asset Management (BAMa.TO)

Brookfield can offer investors a high-quality way to play the growing themes of global infrastructure, renewable power, private equity and improving U.S. property prices. Buy this stock while it trades below its NAV.

Past Picks: November 26, 2014

Power Financial (PWF.TO)

Then: $35.18 Now: $30.25 -14.01% Total return: -9.31%

WSP Global (WSP.TO)

Then: $35.90 Now: $38.96 +8.52% Total return: +13.62%

Brookfield Asset Management (BAMa.TO)

*Stock Split* May 13, 2015 – 3 for 2

Then: $56.22 Now: $40.05 +6.86% Total return: +8.33%

Total Return Average: +4.21%

Market outlook:

Markets hate uncertainty. Until there is more clarity that the events out of China and lower oil will not bring about a global recession, the path of least resistance may well be down – absent more powerful catalysts. While there has been some evidence of global economic deceleration, the better view at this time still supports a somewhat constructive picture. If correct, this pullback is more likely a correction within a bull, which means better days are soon ahead.

Yet the viciousness and suddenness of this downdraft since January 1 looks far more indicative of a looming recession. Is this the market correctly signalling an economic downturn? Or was the carnage triggered in part by a lot of big money hedging at once – creating a combination of fear, uncertainty and margin calls exacerbated by the fact that broker / dealers cannot play the same smoothing role. The next few months of data will likely tell the tale.

And since we cannot be sure, holding a higher amount of cash than usual‎ is prudent at this time.While we are not aggressively buying at the moment, we are holding quality, mostly cash flow-paying positions that we believe are well positioned to benefit from the areas of strength.

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