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3 top picks from Middlefield’s Andy Nasr

Andy Nasr is a portfolio manager at Middlefield Capital. His focus is on North American dividend stocks and REITs.

Top picks:

Quebecor Inc.
The company owns cable, wireless and media assets and trades at a substantial discount to intrinsic value. We expect free cash flow to improve as capital intensity declines and wireless subscriber growth increases.

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Brookfield Infrastructure LP
The company owns transportation, electricity and energy infrastructure assets. Management has done a good job expanding the business and they have a strong backlog of projects that should support additional dividend growth during the next few years.

Allied Properties REIT
The REIT is the dominant owner of brick and beam office buildings in Canada. We expect industry-leading cash flow growth as occupancy increases and development potential is realized.

Past picks: May 28, 2012

H&R REIT
Then: $24.28
Now: $24.56
Total return: +6.12 per cent

EnerCare Solutions Inc.
Then: $9.23
Now: $9.36
Total return: +9.53 per cent

AltaGas Ltd.
Then: $29.78
Now: $38.93
Total return: +35.97 per cent

Total return average: +17.21 per cent

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Market outlook:

We believe that global growth will accelerate as the year progresses, supported by expansionary central bank policies. In North America, the U.S. economy continues to show signs of improvement, led by increased employment, rising house prices and manufacturing – all of which should support Canadian exports and economic output. The slower growth currently being experienced by emerging economies has been affected by deliberate policy decisions aimed at curbing inflation and stimulating domestic consumption. Fluctuations in emerging market growth should be expected as the focus has shifted to engendering socio-economic improvements that will increase domestic demand and minimize the reliance on export-led manufacturing.

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