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bnn market call

Jason Donville.

Jason Donville is president & CEO, Donville Kent Asset Management. His focus is on growth and financial stocks.

Top picks:

Home Capital

Canada's leading non-bank mortgage lender has delivered consistently high ROE's for more than a decade and the current low interest rate environment suggests that this track record will continue. The stock trades at 8.8x 2014 earnings and should deliver strong results in the coming quarters.

Constellation Software

Constellation remains one of the top value creators in Canada and yet trades at a modest valuation multiple in relation to its growth rate. The Toronto-based software company enjoys exceptional cash flows and an dividend hike might be around the corner.

Parkland Fuel

The Red Deer-based gas station operator boasts a 5.6-per-cent yield and a nice growth trajectory. The stock trades on 9.5x 2014 earnings and its payout ratio is only 53 per cent so a dividend hike in 2014 is plausible.

Past Picks: October 3, 2012

Softchoice Corp. Acquired by Birch Hill Equity Partners 06/21/2013
Then: $11.75
Now: $20.00
Total return: +72.22 per cent

Badger Daylighting
Then: $28.33
Now: $76.00
Total return: +175.58 per cent

DirectCash Payments
Then: $23.87
Now: $18.40
Total return: -18.17 per cent

Total return average: +76.54 per cent

Market outlook:

The current bull market is roughly 55 months old but deflationary concerns suggest that interest rates will stay low for the foreseeable future. We believe that the Canadian market, which has risen modestly over the past three years is poised for a strong year-end rally. We think technology and financial services stocks will lead this rally.