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BNN Market Call

3 top stock picks from Macquarie’s Mike Newton Add to ...

Mike Newton is associate director and portfolio manager at Macquarie Private Wealth. His focus is on North American equities and ETFs.

Top picks:

McDonald’s Corp.
The decline in this dividend marathoner is a rare buying opportunity. Sporting a 3.7-per-cent yield, McDonald’s has increased its dividend for 36 years straight.

Verizon Communications Inc.
A healthy 5-per-cent yield, an enviable position in a growing market with only one major competitor, and the largest subscriber base in the mobile market – combined with the recent sell-off – has created an enormous buying opportunity for shares of VZ.

Retrocom Mid-Market REIT
Retrocom is an appealing growth story with an unusually high 8.4-per-cent yield and industry clout rarely found in a small REIT. Without doubt, the high payout ratio and transitional nature of this REIT increases its risk profile. Nonetheless, we strongly assert that at the current trading price investors are being well compensated.

Past Picks: Nov. 28, 2011

Then: $376.12
Now: $559.72
Total return: +50.16 per cent

Brookfield Canada Office Properties
Then: $22.75
Now: $29.11
Total return: +32.86 per cent

Wynn Resorts
Then: $114.60
Now: $106.50
Total return: +1.07 per cent

Total Return Average: +28.03 per cent

Market outlook

I can’t help but think that the fiscal cliff is this decade’s Y2K. Pundits and investors have never been so over-prepared for something so well known. So while investors focus on this matter, which is still very important, I would suggest they also look beyond the Washington beltway. Equities are under pressure based on the recent batch of earnings, which did to inspire. A bounce can happen at any time, but given the “crapshoot” nature these days of predicting macro events, I would continue to limit exposure. If a V-shaped recovery in stock prices occurs, I would use it to immediately upgrade a portfolio to wonderful companies doing wonderful things.

Watch Mr. Newton on BNN.

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