Gordon Reid is president and CEO of Goodreid Investment Counsel. His focus is U.S. equities.
Top Picks:
CVS Caremark
CVS has some cross-winds that allow for a good entry point into the stock. Short-term competitive pressures and challenges in the front of their stores are masking the longer-term positive catalysts of an aging population and easier access to prescription medication because of health care reform.
Ensco plc CL A
The youngest fleet in the industry will help this deep-water driller expand profit margins over the coming years. In the meantime, day rates are expanding and utilization rates are high, allowing ESV to grow revenues and earnings briskly.
TeleTech Holdings
TTEC is involved in business process outsourcing and customer relationship management around the world. Goodreid expects ramp-ups of new customer relationships to be lumpy but ongoing leading to solid long-term growth of revenues and earnings.
Past Picks: December 19, 2012 (* all figures US$)
Apple
Then: $526.31
Now: $564.53
Total return: +9.95 per cent
United Therapeutics
Then: $51.49
Now: $93.39
Total return: +81.38 per cent
Walgreen
Then: $37.24
Now: $58.72
Total return: +61.46 per cent
Total return average: +50.93 per cent
Market outlook:
While most of the credit for the equity market rally is going to the Fed's low interest rate policy, little attention is being paid to corporate earnings, which are the foundation of the market's current level. The S&P 500 index 2014 weighted earnings estimate is currently $120 per share, up sharply from an inflation-adjusted level $74/share ten years ago and $52/share twenty-five years ago.