John Stephenson is president and CEO of Stephenson & Company. His focus is North American equities.
Top picks:
Constellation Brands (STZ.N) – Last bought on March 7, 2016 @ $140.61
Improving wine business is a huge positive; it is benefiting from premiumization, increasing penetration by millennials and improving per capita consumption. The company has made strong inroads in beer, particularly targeting the growing U.S. Hispanic population.
Discover Financial Services (DFS.N) – Last bought on April 1, 2016 @ $51.38
The company has very strong financial performance with approximately 20-per-cent ROE and very healthy earnings-per-share growth. It is poised to take share in the credit card business and has a strong excess capital position which should support earnings growth via share repurchases.
*Short* – Guess Inc. (GES.N) – Last shorted on February 29, 2016 @ $21.07
The company is a declining brand in a crowded space. It has had disappointing financial results over the last several quarters.
Past Picks: May 6, 2015
Actavis PLC (ACT.N) - Combined with Allergan June 15, 2015 – now Allergan (AGN.N)
Actavis and Allergan combined under the combined title Allergan. We held Allergan until February 8, 2016 when we sold the remaining shares. While this was one of our favourite names, health care had been under pressure for some time due to the Valeant controversy and the associated issues.
Then (ACT): $283.31 Now (as AGN): $219.94 -22.37% Total return: -22.37%
Brookdale Senior Living (BKD.N)
Then: $35.57 Now: $18.94 -46.75% Total return: -46.75%
The Blackstone Group (BX.N)
We held a small amount of Blackstone until April 11, 2016. While the name is strong, the cyclical pressure on alternative asset managers made it necessary to reduce our exposure.
Then: $41.75 Now: $28.67 -30.00% Total return: -25.98%
Total Return Average: -31.70%
Market outlook:
With the stock market stabilizing over the last month and earnings expectations exceedingly low, now is a good time for investors to start slowly wading back into equities. Stocks in North America have been driven lately by resources and financials. However, there is a lot of opportunity for investors in the consumer staples, health care and technology sectors.