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The Globe and Mail

Three top picks from Avenue Investment Management’s Paul Harris

Paul Harris is a partner and portfolio manager at Avenue Investment Management. His focus is on North American and Global Equities.

Top picks:

Deere & Co.
We see Deere as well positioned to benefit from long-term trends toward increased crop production and consumption. The stock is cheap trading at 12 times earnings, has a dividend yield of 2.6 per cent and trades at price to book value of 3.3 times.

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Industry leader with dominant market share in a growing industry. Well-developed market road-map, generations ahead of competitors. Revenues and EPS growing of 10 per cent+ CAGR over the next five years Attractive valuation at 13.9x eps plus a dividend of 2.1 per cent and a commitment to returning capital to shareholders.

Bank of America
Bank of America is one of the largest banks in the United States holding 10 per cent of all deposit in the country. The bank continues to restructure by selling of noncore assets and reducing cost through reduction in headcount. The company continues to improve its capital base. The stocks trades at .7 times book value and 10 times earnings. The company is buying back stock and will be increasing its dividend over the next several years.

Past Picks: May 30, 2013

Regions Financial Corp.

Then: $9.38; Now: $10.10 +7.98%; Total return: +9.02%

Leon's Furniture

Then: $12.77; Now: $14.47 +13.31%; Total return: +16.67%

TD Bank Stock Split: February 3, 2014 - 2 for 1

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Then: $84.34; Now: $53.60 +27.10%; Total return: +31.83%

Total return average: +19.17%

















Market outlook:

Global stocks should continue its slow long term "grind" higher due to low interest rates, high corporate probability and continued global GDP expansion. Concerns emulates from the emerging markets that have a continued lack of visibility. Bond yields will continue to stay low for the short and medium term as central banks withdraw monetary liquidity slowly. We think the opportunity is increasing in companies that can achieve good total return- a good dividend yield accompanied by strong balance sheets and high cash flow cover. In a low inflation environment these stock are likely to remain attractive

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