Christine Poole.
Christine Poole is CEO and managing director, GlobeInvest Capital Management. Her focus is North American large caps.
Top Picks:
TD Bank (TD-TSX)
TD is a leading North American bank, offering retail banking services which account for 92 per cent of net income and wholesale activities representing the remaining 8 per cent. Its U.S. Retail segment (21 per cent of profits) will benefit from the strengthening U.S. economy. A strong balance sheet and capital position, a track record of consistent dividend growth (12-per-cent annualized growth over the last 20 years), combined with attractive valuation metrics makes TD a timely investment for both income and growth oriented investors. TD offers a current dividend yield of 3.6 per cent.
Google (GOOGL-Nasdaq)
Google is a global technology company, providing the world's leading search engine and dominates in both global desktop and mobile search engine queries. Online advertising represents over 90 per cent of Google's revenues. Representing less than 20 per cent of total global ad spend, there is still significant secular growth for internet advertising. Google is well-positioned within this media channel, garnering a consistently strong share in digital/internet based advertising spend. Improving economies are also supportive of larger overall advertising budgets. Having lagged its large cap technology peers this year, Google represents an attractive investment for investors looking for internet exposure.
Wells Fargo (WFC-NYSE)
Wells Fargo is a high quality, financial services company with about an 11-per-cent national deposit market share. Its business mix is balanced between net interest/spread income representing 52 per cent of revenues and non-interest income at 48 per cent of revenues. Wells Fargo is the leading originator of U.S. residential mortgages with a 29-per-cent share of the residential mortgage market as well as the top auto, small business and middle market commercial lender in the nation. Wells Fargo delivers consistent, above average long-term profitability, with a keen focus on effective capital allocation, credit quality and low operating expenses. Wells Fargo currently offers a dividend yield of 2.7 per cent.
Past Picks: January 7, 2014
Unilever ADR (UL-NYSE)
Then: $39.53; Now: $39.24 -0.73%; Total return: +3.11%
Home Depot (HD-NYSE)
Then: $81.50; Now: $103.73 +27.28%; Total return: +30.04%
Royal Bank (RY-TSX)
Then: $70.67; Now: $76.70 +8.07%; Total return: +12.19%
Total return average: +15.11%
Market outlook:
We remain constructive on equity markets in general and continue to believe a focus on U.S equities is warranted. The fundamentals underpinning the U.S. economic recovery are improving, led by strong job growth. With the U.S. economy expected to outperform the global economy, U.S. equities should follow in tandem. The significant decline in crude oil prices will provide another source of household income, not only to U.S. consumers but on a global basis. The substantial oil windfall is causing upward revisions in overall economic growth in 2015 and downward revisions in inflationary projections. With inflation easing, international central banks have the flexibility to maintain accommodative monetary policies to stimulate economic growth.
Corporate profit growth will be the primary driver for equity markets going forward. Notwithstanding negative earnings revisions from the energy sector, earnings from the S&P 500 companies are expected to grow 4 per cent in Q4/14 and 8 per cent in 2015. The consensus expectation is for the U.S. Fed to start rising interest rates mid-year, at a slow, graduated pace. The strong U.S. dollar suggests additional ammunition for a subdued pace. Low interest rates and benign inflation should be bullish for stock market valuation multiples.