Stuart Hinshelwood is U.S. Equities Specialist at BMO Nesbitt Burns.
Top Picks:
Abbott Labs
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- Good valuation for EBITDA growth for a diversified health-care stock;
- upside from Nutritionals, Pharma, Devices & Vascular following spin-off of Abbvie (ABBV) – mostly branded drugs. Upside to $42 (U.S.) ~20 per cent
Franklin Resources
- High-quality asset manager (Templeton, Franklin & Bissett) for a decent valuation.
- 55-per-cent equity and strong performance in Templeton Global Bond with lower duration and limited U.S. government exposure which is under-appreciated by the Street.
Time Warner
- decent valuation, high FCF and good pure-play content and Time Inc. spin-off all catalysts
Past Picks: June 3, 2013
Allergan
Then: $98.94
Now: $90.99
Total return: -7.99 per cent
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EMC Corp.
Then: $24.74
Now: $26.98
Total return: +9.53 per cent
Target
Then: $71.05
Now: $65.34
Total return: -7.46 per cent
Total return average: -1.97 per cent
Market outlook:
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Neutral – with positive bias towards equity (same as June). Recent economic data was not great (i.e. no taper), yesterday`s shot of momentum usually precedes a price peak. U.S. markets are fairly-valued for economic progress. A balanced view overall.