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Bruce Campbell.

Bruce Campbell is president and portfolio manager of Campbell, Lee & Ross Investment Management. His focus is Canadian large caps.

Top Picks:

Cardinal Energy (CJ.TO)

Cardinal is a Western Canadian oil producer, best in class for balance sheet, hedge book (50 per cent this year and 25 per cent next) and a good backlog of targets to drill and bring on production as prices hold and/or improve. One of few dividend payers with a payout ratio all-in under 100 per cent at strip pricing. A recent purchase for client portfolios at $9.19 in the past week or so.

Manulife Financial (MFC.TO)

The recent pullback makes MFC attractive. They will benefit from higher rates when they come, and in the meantime will have good growth from Asia, while worries about energy exposure in the loan book now appear to be easing. Stock is 9x earnings and at a discount to book value. Have owned for years but have made recent purchases in the $18.25 range.

Alimentation Couche-Tard (ATD.B.TO)

Well-managed company that is now a world leader in convenience store operations. Couche-Tard has been acquiring in the U.S. and Europe as energy companies divest their gas stations.

Past Picks: May 1, 2015

Freehold Royalty (FRU.TO)

Sold the stock last year as energy prices fell and the company had to cut its dividend, even though they are primarily a royalty company.

Then: $17.93 Now: $12.57 -29.89% Total return: -24.61%

CN Rail (CNR.TO)

Still holding. Guided for a flattish year this past week, and the stock has fallen a bit but remains a long-term, core holding.

Then: $80.09 Now: $78.68 -1.76% Total return: -0.02%

Crombie REIT (CRR_U.TO)

Still holding. The Sobeys family real estate company holds shopping centres that are anchored by the grocer. Has a 6-per-cent solid yield that should grow.

Then: $13.35 Now: $13.99 +4.79% Total return: +12.18%

Total Return Average: -4.15%

Market outlook:

Markets have had a nice V-shaped recovery from the February low. Canada is one of the better markets as both oil and gold stocks have rebounded nicely. Remember that the TSX is up only 17 per cent from its low compared to more than 40 per cent for key EM indexes such as Brazil and Russia. Also, history shows that relative resources rallies occur once every 10 years or so. On average, they last 1-2 years and outperform the S&P/TSX by a wide margin. We are three months into this rally and cyclicals are still cheap. So this sector rotation is highly dependent on oil prices and will be the deciding factor on the TSX this year. Stocks may chop sideways over the summer where there should be buying opportunities on dips.

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