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John Stephenson is president and CEO, Stephenson & Company Capital Management. His focus is North American large caps and resource stocks.

Top Picks:

Vodafone (VOD-Q)Last bought on Aug. 25, 2016 for $33.17

Vodafone pays a strong dividend at approximately 6.7 per cent. It is the second-biggest cellphone provider in Germany, and the U.K. only represents 10% of its value. It has a better valuation than its U.S. peers.

*Short* Shake Shack (SHAK-N)Shorted on Sept. 12, 2016

Shake Shack's valuation is very stretched at 70 times price-to-earnings. We have limited insights into when any meaningful economic rebound will begin; the company's earnings guidance is very muted. It faces tougher comparisons with a resurgent McDonalds and slowing same store sales.

Medtronic (MDT-N)Last bought on August 25, 2016 @ $84.60

The company can grow EPS at double-digits over next five years. MDT should be able to grow the top line at mid-single digits. Increased access to international cash should unlock value for shareholders.

Past Picks: Oct. 13, 2015

Nike (NKE-N)

  • We sold on Dec. 23, 2015
  • The company had had a good run, and it started to roll over as consumer discretionary stocks had started to run out of steam
  • It’s a high-quality name but has not been working for a while

Then: $62.91 Now: $55.15 -12.33% Total return: -11.39%

MetLife (MET-N)

  • We sold on July 29, 2016
  • We had a large allocation to financial stocks, and in a lower-for-longer interest rate environment, it was time to exit
  • It was part of a broader culling of financial names in our fund

Then: $47.88 Now: $44.52 -7.02% Total return: -3.64%

Mondelez International (MDLZ-Q)

  • We sold on Feb. 5, 2016
  • It is a high-quality name that had been underperforming our fund for a while
  • Consumer discretionary names were looking toppy at the time

Then: $44.84 Now: $43.16 -3.75% Total return: -2.59%

Market outlook:

The Federal Reserve's recent policy statement has highlighted that we are going to be lower-for-longer in terms of interest rates. Investors should continue to over-weight income-producing securities in their portfolios and reduce their exposure to financials and growth-oriented securities.

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