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Three top stock picks from Matco’s Jeff Parent

Jeff Parent.

Fred Lum/The Globe and Mail

Jeff Parent is vice-president and portfolio manager at Matco Financial. His focus is technical analysis.

Top Picks:

Royal Bank of Canada

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The Royal Bank of Canada's large wealth management and wholesale segments should benefit from increased fund flows into equities and M&A activity, respectively. The breakout from the recent $69-$72 consolidation could indicate a continuation of the uptrend. Set $70 as an exit/reduce price.

Knight Therapeutics

Knight recently IPO'd and the shares have been performing well. With very little hesitation, the price has steadily moved from sub $4 to $7. Knight's all-star management team and priority review voucher combined with a strong cash position are good recipe for success. Jonathon Ross Goodman, president & CEO of Knight Therapeutics was previously the co-founder of Paladin Labs Inc., which was purchased by Endo Health Solutions for $1.6-billion in November 2013. Under Mr. Goodman's leadership $1 invested in Paladin at its founding was worth over $100 at its sale 18 years later.

Tourmaline

One of Canada's best performing energy companies, with stronger production-per-share growth compared with peers. Set $51 as an exit/reduce price.

Past Picks: Feb. 3, 2014

Hardwoods Distribution

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Then: $9.98; Now: $10.60 +6.21%; Total return: +6.67%

CCL Industries

Then: $79.46; Now: $98.50 +23.96%; Total return: +24.29%

Raging River Exploration

Then: $6.77; Now: $9.44 +39.44%; Total return: +39.44%

Total return average: +23.47%

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Market outlook:

Since 2012, the TSX has failed to keep pace with the U.S. markets, due in part to the instability in our resource sector. This has begun to turn around and we see the TSX leading global markets this year. We expect this to continue with the generally stable and improving economic outlook and the government's dovish monetary policy. We remain cautious going into Q1 earnings because of the possibility of negative weather impacts.

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