David Baskin.Moe Doiron/The Globe and Mail
David Baskin is president of Baskin Wealth Management. His focus is North American large caps.
Top Picks:
Qualcomm Inc. (QCOM-Nasdaq)
Qualcomm is a leading provider of chip sets, semiconductor devices and software to the mobile device industry. The company holds important patents and is a key supplier for most major manufacturers. Recent difficulties in China have led to a selloff in the stock which gives a good buying opportunity.
TransForce Inc. (TFI-TSX)
TransForce is a less-than-truckload (LTL) freight company that has been consolidating the industry through acquisition. The company will benefit from lower fuel prices, which will lead to both higher operating margins and a more competitive position against rail carriers. The stock is attractive at this price.
Bank of Nova Scotia (BNS-TSX)
Scotiabank is Canada's most international bank. It has run into some problems in the Caribbean, which led it to write off assets there. Worries about problems that may arise from the drop in energy prices and weakness in the Canadian housing market are exaggerated. The company has raised its dividend 43 times in the past 45 years.
Past Picks: January 9, 2014
Suncor Energy Inc. (SU-TSX)
Then: $37.29; Now: $37.49 +0.54%; Total return: +3.16%
Progressive Waste Solutions (BIN-TSX)
Then: $26.02; Now: $36.37 +39.78%; Total return: +42.75%
BCE Inc. (BCE-TSX)
Then: $45.27; Now: $58.79 +29.87%; Total return: +36.49%
Total return average: +27.47%
Market outlook:
The rapid drop in the price of oil and the associated fall in the Canadian dollar has caused us, as well as most analysts, to revisit our forecasts for the Canadian and U.S. economies. It is clear that Canadian growth will now be considerably lower than expected, and that the balance of trade will swing sharply negative. At the same time, we expect to see increased consumer spending outside of Alberta due to lower energy prices, and an upsurge in manufacturing due to the low currency. We expect very low interest rates to persist well into 2016, and believe that high quality dividend-paying stocks are now undervalued.