Norman Levine is the managing director at Portfolio Management Corp. His focus is on North American large caps.
Top Picks: Covidien
Owned for some time and bought at $39.55. Covidien is an American-based operating room medical instruments company that is incorporated in Ireland for tax reasons. It is in the process of spinning out its pharma business and we believe the two parts are worth more than the whole. Its stated goal is to return 25 to 40 per cent of free cash flow in the form of stock buybacks.
Bought January 2012 at $27.35, BB&T is the ninth largest bank in the U.S., located mainly in the southeast. It took TARP money only when ordered and paid it back the first day it was allowed. As a result its strong capital position is allowing it to take market share from its capital constrained competitors. It yields 2.7 per cent and we expect the dividend to continue growing.
Owned for some time and bought most recently at $1.80. Essential is an oil and natural gas liquids and horizontal drilling well servicing company. Its acquisition of Technicoil gives it the largest coil tubing well service fleet in Canada. Essential also has a small but growing operation in Colombia. It has a 4.7 per cent yield.
Past Picks: May 20, 2011
International Forest Products
Total Return Average: +1.23%
We expect some rough patches in equity markets over the next few months due to European concerns. We view this as an upcoming buying opportunity as opposed to a major long-term worry. Defensive stocks and stocks with healthy dividend yields should outperform while commodity stocks should suffer due to a continued strong U.S. dollar and expected weakened demand.
Compiled by Rob Moysey/BNN Market Call Tonight