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3 top picks from Morgan Meighen’s Michael Smedley

Michael Smedley is the executive vice-president of Morgan Meighen & Associates. His focus is on Canadian equities.

Market outlook

I continue with last year's message that I expect the bearish condition of markets to continue. Trouble persists with major international problems, low interest rates, deep mistrust of major banks, reduced growth. On the plus side fine Canadian companies with reliable dividends should continue to offer a mixture of stability and even price appreciation.

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Some relief might be offered in a patchy U.S. housing recovery, an end to the market's summer recess and the U.S. pre-election doldrums. Longing for an end to this glorious northern summer is not a bad idea if you are ready to focus on markets. By that time the best depressed market prices will be gone. A buy-and-wait strategy right now often pays off.

Past Picks:June 14, 2011

Intact Financial

Then: $54.08
Now: $63.41
TR: +20.39 per cent

CGI Group

Then: $21.86
Now: $23.97
TR: +9.65 per cent

Harry Winston Diamond Corp.

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Then: $15.78
Now: $13.25
TR: -16.03 per cent

Total return average: +4.67 per cent

Top Picks

Alimentation Couche-Tard Inc.

In these troubled markets, Canada has quite a few consumer-related stocks which have simple themes and are powerfully positioned. Couche- Tard has an excellent track record in North America with its major networks of convenience stores. I have confidence in the proprietors being able to build on its major acquisition in Europe from Statoil, the Norwegian state company.

Glentel Inc.

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Glentel should be coming out of the pressure period in the handset business in North America and supporting its long term growth rate again in unison with its new expansions in both Canada and the U.S.

AutoCanada

Owner operator auto dealerships across Canada. AutoCanada is in a breakthrough phase in the acquisition of auto dealerships with the support of auto manufacturers who maintain a tight control of what is a highly profitable business.

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