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Paul Harris is partner and portfolio manager at Avenue Investment Management. His focus is North American and global equities.

Top Picks:

Deere & Company (DE NYSE)

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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 3.1 times.

Qualcomm (QCOM NASDAQ)

Qualcomm is an industry leader with dominant market share in a growing industry, a well-developed market road-map and is generations ahead of competitors. It has revenues and EPS growing 10 per cent+ CAGR over the next five years, an 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 (BAC NYSE)

Bank of America is one of the largest banks in the United States holding 10 per cent of all deposits in the country. The bank continues to restructure by selling of non-core assets and reducing cost through reduction in head count. The company continues to improve its capital base. The stocks trades at .7 times book value and 10 times 2015 earnings. The company is buying back stock and will be increasing its dividend over the next several years.

Past Picks: June 27, 2013

TD Bank (TD TSX) * Stock Split – February 3, 2014 – 2 for 1

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Then: $83.90; Now: $55.28 +31.78%; Total return: +36.68%

SunTrust Banks (STI NYSE)

Then: $32.92; Now: $40.76 +23.82%; Total return: +25.33%

BCE Inc. (BCE TSX)

Then: $42.99; Now: $48.52 +12.86%; Total return: +18.81%

Total return average: +26.94%

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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. Concern rises 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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