Bruce Campbell is president and portfolio manager at Campbell, Lee & Ross Investment Management. His focus is on Canadian large caps.
Empire Co. Ltd. (EMP.A TSX)
Empire is the holding company for Sobeys and also owns Canadian real estate, both directly and indirectly through Crombie REIT. The grocery side is very cheap and has excellent upside from improving the Canada Safeway assets in Western Canada that they bought last year. Net of the real estate, the grocery side trades at the lowest multiple of the group, a safe place to have consumer exposure that benefits from higher disposable income.
Walt Disney Co. (DIS NYSE)
Disney is a multi-business consumer play with the theme parks, movies and TV (ESPN/ABC) being the main avenues of growth. Universal China comes early next year as does a heavy slate of blockbuster movies including Star Wars..
SNC-Lavalin Group Inc. (SNC TSX)
This is Canada's largest engineering and construction company. They are likely to sell their remaining holding in the 407 highway which would give them $20 per share in cash. They already have sold Altalink so the balance sheet is in good shape. Having bought an energy-related E&C business this summer, the stock appears to have gotten hit for that even though it is a small part of the overall business.
Past Picks: December 16, 2013
Element Financial (EFN TSX)
Then: $14.17; Now: $14.08 -0.64%; Total return: -0.64%
Precision Drilling (PD TSX)
Then: $9.58; Now: $7.15 -25.37%; Total return: -23.74%
Paramount Resources (POU TSX)
Then: $37.41; Now: $34.56 -7.62%; Total return: -7.62%
Total return average: -10.67%
The S&P/TSX composite spent the first three weeks of November rebounding from the October 15th lows. However, after six consecutive weeks of gains, the TSX was down ~2 per cent in the final week of the month thanks primarily to OPEC. The decision by OPEC to not cut output or to even reinforce the existing quotas resulted in a drop of ~$8/bbl (U.S.) off WTI last week which has resulted in a sharp drop to the energy sector – it was the biggest weekly drop since August, 2011. Although it doesn't feel like it, the S&P/TSX composite closed up over 100 points in November and is up over 1,100 points since mid-October. Many other non-resource areas of the market have made up for the energy and materials weakness. It makes it more difficult to find value in markets, it is a stock-by-stock process right now but there are still pockets of good value. Good quality with real growth and decent, safe balance sheets are again the place to be.