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Three top stock picks from BMO Nesbitt Burns’ Stuart Hinshelwood

Stuart Hinshelwood is U.S. Equities Specialist at BMO Nesbitt Burns.

Top Picks:

Abbott Labs

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  • Good valuation for EBITDA growth for a diversified health-care stock;
  • upside from Nutritionals, Pharma, Devices & Vascular following spin-off of Abbvie (ABBV) – mostly branded drugs. Upside to $42 (U.S.) ~20 per cent

Franklin Resources

  • High-quality asset manager (Templeton, Franklin & Bissett) for a decent valuation.
  • 55-per-cent equity and strong performance in Templeton Global Bond with lower duration and limited U.S. government exposure which is under-appreciated by the Street.

Time Warner

  • decent valuation, high FCF and good pure-play content and Time Inc. spin-off all catalysts

Past Picks: June 3, 2013

Then: $98.94
Now: $90.99
Total return: -7.99 per cent

EMC Corp.
Then: $24.74
Now: $26.98
Total return: +9.53 per cent

Then: $71.05
Now: $65.34
Total return: -7.46 per cent

Total return average: -1.97 per cent

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Market outlook:

Neutral – with positive bias towards equity (same as June). Recent economic data was not great (i.e. no taper), yesterday`s shot of momentum usually precedes a price peak. U.S. markets are fairly-valued for economic progress. A balanced view overall.

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