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Nick Majendie.

Lyle Stafford/The Globe and Mail

Nick Majendie is senior portfolio manager and director at Majendie Wealth Management. His focus is on Canadian large caps.

Top picks:

Brookfield Infrastructure Partners L.P.
We believe that cash flow per share will grow by close to 50 per cent from 2012 to 2015. This is relatively predictable since 85 per cent of Brookfield's EBITDA is backed by regulated or contracted revenues. We estimate that its distribution can grow from the current $1.50 per unit to $1.95 in three years.

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Baytex Energy Corp.
At $100 oil and 18-per-cent heavy oil differential, we estimate that Baytex's cash flow per share could approach $7 by 2017. The stock cheapened recently because of the heavy oil discount widening to the low $40s. However, one-third of Baytex production is now sent by rail, one-third is covered by longer term contracts and only one-third is subject to the full current discount. Differentials should improve gradually from the summer through the first half of 2014. The dividend is very well covered.

CIBC
CIBC is ranked the No. 1 safest bank among the global top 100 (using the Bloomberg rating system). The stock is trading at under 10 times this year's earnings per share and dividends should grow faster than net income over the next three years on account of the bank's very strong capital position. The dividend could thus be 20 per cent higher in three years.

Past picks: April 23, 2012

Brookfield Renewable Energy
Then: $27.35
Now: $30
Total return: +13.70 per cent

Agnico-Eagle Mines Ltd.
Then: $32.32
Now: $46.36
Total return: +45.32 per cent

Thomson Reuters Corp.
Then: $28.20
Now: $30.86
Total return: +13.21 per cent

Total return average: +24.08 per cent

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Market outlook:

Recent trends in money supply growth in the world's key economies (U.S., euro zone, Japan and China) permit some optimism for a continued recovery in the global economic growth rate. This flies in the face of the latest World Bank global 2013 GDP forecast, which was recently cut to 2.4 per cent, compared to their previous (June) projection of 3-per-cent growth.

The odds favour a reasonably positive first half of 2013, despite the usual caveats about shocks from Europe, which would be evident in a return to rising bond yields, and intransigence in the U.S. Congress, which would rattle financial markets.

Not that we represent ourselves as technicians, but the new highs in the NYSE weekly advance/decline line, as well as the Lipper report of strong inflows in January into equities and out of bonds, encourage us to believe that the cyclical bull market that started in March 2009 will continue for the next several months. However, risks will bear even closer watching beyond the middle of the year.

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