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Christine Poole.

Christine Poole is CEO & managing director, GlobeInvest Capital Management. Her focus is North American large caps.

Top Picks:

Cineplex Inc. (CGX-TSX)

Cineplex is Canada's dominate film exhibition operator with an estimated 80 per cent of Canadian box office revenues. Management maximizes revenue per patron through increasing concession spending, rolling out its retail branded offerings, (e.g. YoYo's, Outtakes, Poptopia) and offering premium priced formats, such as 3D films, IMAX screens and VIP auditoriums. Alternative programming is also offered to drive traffic into its theatres. A strong film slate is expected in the back half of 2015 and into 2016, which should help drive overall industry theatre traffic. Cineplex is a high quality defensive investment, recently increased its dividend and provides an attractive 3.1-per-cent yield.

CGI Group (GIB.A-TSX)

CGI Group is a global technology services firm deriving 54 per cent of its revenues from outsourcing and 46 per cent from systems integration & consulting. Its revenue breakdown by geography consists of 29 per cent U.S., 15 per cent Canada and 56 per cent Europe. Management remains focused on creating shareholder value through accretive acquisitions at reasonable prices within a consolidating IT services market and share repurchases.

Johnson & Johnson (JNJ-NYSE)

Johnson & Johnson is a global diversified health care company, manufacturing a broad range of products within three segments: pharmaceuticals (43 per cent of sales), medical devices and diagnostics (37 per cent) and consumer (20 per cent). Johnson & Johnson offers stable earnings growth driven by organic growth from its Pharma division, rising health care utilization rates and stabilization of its consumer business as OTC products are re-launched to the market. Approximately 70 per cent of sales are derived from products that have a #1 or #2 global share. One of a handful of triple-A rated companies left in North America, JNJ has increased its dividend for 53 consecutive years and offers investors a dividend yield of 3.0 per cent.

Past Picks: May 6, 2014

Loblaw (L-TSX)

Then: $47.48; Now: $63.53 +33.80%; Total return: +36.18%

Home Depot (HD-NYSE)

Then: $77.71; Now: $112.52 +44.79%; Total return: +47.86%

Fluor (FLR-NYSE)

Then: $75.10; Now: $59.28 -21.07%; Total return: -20.06%

Total return average: +21.33%

Market outlook:

The strong April payroll number reported last week provides comfort that the U.S. economy is not stalling out. Weak economic growth in the first quarter was attributable to harsh weather conditions, augmented by the collapse in crude oil prices and strong U.S. dollar. Economic activity and consumer spending are expected to re-accelerate as the year progresses.

With close to 90 per cent of the companies in the S&P 500 having reported, Q1/15 earnings per share (EPS) have exceeded expectations so far, up 1.7 per cent year-over-year compared to down 4.5 per cent going into earnings season. Excluding energy earnings, which was down 58 per cent, EPS is up 11.2 per cent. Overall, earnings growth is expected to strengthen in the back half of the year as F/X comparisons ease somewhat and crude oil prices stabilize. Nonetheless, F/X and lower energy prices have dampened earnings growth, resulting in elevated price to earnings (P/E) multiples compared to a year ago. An offset is the low interest rate and benign inflationary environment, which is generally supportive of higher stock market valuation multiples. Corporate profit growth continues to the primary driver of equity markets going forward.

The recovery in the global economy is supported by accommodative central bank policies. The U.S. Fed, however, is expected to raise interest rates later this year as its economy transitions to self-sustaining growth suggesting the U.S. dollar should remain relatively strong. The pace of U.S. interest rate increases will be data dependent, resulting in heightened sensitivity by equity markets to economic releases and news. At this juncture, the pace of policy normalization is expected to be gradual and measured. Market pullbacks are opportunities to invest in financially strong, attractively valued stocks. Equities remain the preferred asset class, for both income and growth-oriented investors.