Barry Schwartz is CIO and portfolio manager at Baskin Financial Services. His focus is on North American large caps.
The recent drop in energy prices has absolutely punished Keyera's stock price. While some projects on its backlog may be delayed, the company mainly operates as a toll road by gathering, processing, storing and transporting natural gas and its by-products. That will continue whether oil prices are at $100 or $50. Keyera is a dividend aristocrat and offers a yield of over 3 per cent.
Algoma Central (ALC-TSX)
The heavy lifting is almost over. By the end of 2016, Algoma will have spent $500-million upgrading its fleet. As a result, dramatic benefits will accrue to shareholders. Meanwhile, the company should continue to grow its bottom line thanks to an improving North American economy and lower fuel prices.
Teva Pharmaceuticals (TEVA-NYSE)
Teva trades at a very cheap valuation to earnings and its new management team recognizes the need for a catalyst. The company is looking to aggressively cut costs, buyback stock and is on the hunt for acquisitions. While the stock has recovered nicely this year, we feel there is a lot more upside as the market gets comfortable with its exciting drug pipeline.
Past picks: Nov. 29, 2013
Northwest Healthcare Properties REIT (NWH.UN-TSX)
Sold out – needed tax losses
Then: $10.58; Now: $9.09; -14.08%; Total return: - 6.92%
Apple (AAPL-Q) *stock split* 7 for 1, June 9, 2014
Then: $556.07; Now: $115.07; +44.85%; Total return: +47.90%
Then: $66.11; Now: $87.73; +32.70%; Total return: +32.70%
Total return average: +24.56%
As I look back at 2014, the two biggest surprises for me were the drop in interest rates and oil prices. The good news is that low interest rates and oil prices could supercharge business and consumer spending for 2015. The table is set for non-commodity related corporations to have another year of record profits. While we recognize that valuations are not as attractive, we are still finding lots of value in North American equities and still prefer them to any other alternative.