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Don Lato is president, Padlock Investment Management. His focus is North American equities.

Top Picks:

CCL Industries Inc. (CCL.B-TSX)

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CCL Industries is a major player in the global labelling and packaging industry. This Canadian company derives over 80 per cent of its revenue outside of Canada and so will be a major beneficiary of the weak Canadian dollar. CCL completed a transformative and very accretive acquisition of Avery Dennison two years ago and has wisely used its large amounts of free cash flow to pay down debt and position itself for further acquisitions in the near future.

Google Inc. (GOOG-Nasdaq)

Google has been a longtime holding of Padlock's. The stock was an underperformer in terms of price appreciation in 2014 but as it continued to grow its earnings, its price earnings multiple has shrunk dramatically from a forward Price/Earnings (P/E) ratio of 19.8 last year to 16.3 this year. With projected growth of 16 per cent, the current stock price represents an excellent entry point. Google continues to dominate the "search" market and is well positioned to continue to grow its earnings and potentially benefit from multiple expansions as well.

NXP Semiconductor (NXPI-Nasdaq)

NXP Semiconductor's products serve a wide range of industries including automotive, identification and wireless infrastructure. Among its semiconductor peers, NXP has one of the lowest P/E ratios and the lowest P/E to Growth (PEG) ratio of the group. In the case of NXP, a significant portion of their growth will come from the fact that it is their chip that powers the Apple Pay feature in the latest iPhones. NXP will be partnering with Apple in the revolution of the mobile and online payments industry.

Past Picks: April 10, 2014

Apple Inc. (AAPL-Nasdaq) *stock split * June 9, 2014- 7 for 1

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Then: $523.48; Now: $128.48 +71.76%; Total return: +75.02%

Performance Sports Group (PSG-TSX) Previously: Bauer Performance Sports (BAU-TSX)

Then: $14.79; Now: $23.79 +60.85%; Total return: +60.85%


Then: $33.94; Now: $29.72 -12.43%; Total return: -12.43%

Total return average: +41.15%

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Market outlook:

The U.S. market has been in a fairly narrow trading range for the last few weeks but has just broken through the upper end of that range to set new all-time highs on the S&P 500 index. In the very near term, a significant break-out from the trading range is possible but equally likely is a pull-back toward the lower end of the range. Medium to longer term, however, Padlock remains very constructive on the equity markets and is committed to the belief that we are still in the first half of a multi-year bull market. Any weakness should be used as a buying opportunity but commitments to equities on a break out to new highs should be maintained.

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