John Stephenson
John Stephenson is president and CEO, Stephenson & Company Capital Management. His focus is North American large caps and resource stocks.
Top picks:
Vodafone (VOD-N)
Last bought: Aug. 25, 2016 at $33.17
• Strong dividend – approximately 6.7-per-cent yield
• No. 2 cellphone provider in Germany, and the U.K. only represents 10 per cent of its value
• Better valuation than U.S. peers
SHORT - Campbell Soup (CPB-N)
Last bought: May 12, 2016 at $66.42
• Soup is at the businesses core and the business is not stabilized
• Soup is high margin but in secular decline – can CPB find new businesses to invest in as soup declines?
• Trades at a 21-times price-to-earnings ratio
Medtronic (MDT-N)
Last bought: Aug. 25, 2016 at $84.60
• Company can grow EPS at double-digits over next five years
• MDT should be able to grow the top line at mid-single digit over the next five years
• Increased access to international cash should unlock value for shareholders
Previous picks: Sept 26, 2015
SHORT - Petroleo Brasileiro (PBR-N)
- We closed this position on March 26, 2016
- Oil prices started to move higher and the fundamentals were improving for PBR
- Debt maturities were becoming more manageable
- Good progress on the asset divestment program
Then: $4.08 Now: $9.39 -130.15% Total return: -130.15%
SHORT - Teck Resources (TCK.B-T)
- Closed our short on October 10, 2015
- Commodity markets improved and the company was fundamentally strong, which negated the short thesis
Then: $6.52 Now: $21.87 -235.43% Total return: -239.83%
Market outlook
Last week, Fed chair Janet Yellen put a September rate hike back on the table. But despite the selloff that happened in the immediate aftermath of her speech, the path for rates is likely to remain one of lower rates for longer. And in a low rate environment, stocks with a solid dividend yield should be favoured.