Paul Harris is partner and portfolio manager at Avenue Investment Management. His focus is North American and global equities.
Mainstreet Equity Corp.
Mainstreet is a real estate company that has properties in western Canada in the apartment space . The stock trades at a 15-per-cent discount to its NAV.
Regions is a commercial and retail bank in the southeast United States. The stock trades at .7 times book value and a 10.6 times earnings. The company will benefit from a continuing improvement of the U.S. housing market and a continued reduction in cost.
Leon's Furniture Ltd.
Leon's sell furniture and appliances. It is a great Canadian brand that has a 3.0-per-cent yield and trades a 11.9 times earnings. A conservative estimate of the property they own is $6 a share. The company purchase of The Brick Ltd. should lead to further growth in the next several years.
Past Picks: December 27, 2012
Davis + Henderson Corp.
Then: $21.30; Now: $28.99; Total return: +43.40 per cent
Bank of America
Then: $11.47 (U.S.); Now: $17.01; Total return: +48.74 per cent
Brookfield Asset Management Inc.
** SPIN OFF** Brookfield Property Partners
Then: $36.11; Now: $41.86; Total return: +21.65 per cent
Total return average: +37.93 per cent
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.