Stan Wong is director of wealth management and portfolio manager, Stan Wong Private Wealth Management, ScotiaMcLeod. His focus is North American large caps and ETFs.
Last bought new position in August 2015 at approximately US $122
Celgene is a biopharmaceutical company focusing on the discovery, development and commercialization of therapies designed to treat cancer and other severe, immune, inflammatory conditions. CELG continues to have strong growth prospects and will benefit from aging demographics longer-term. CELG's therapy pipeline is very robust allowing for further diversification of its revenue stream over the next several years. The shares are compelling, trading at a 23x forward price-earnings multiple with a long-term projected earnings per share (EPS) compound annual earnings growth rate (CAGR) of about 25 per cent.
Juniper Networks (JNPR.N)
Last bought new position this week at approximately US $26
Juniper Networks provides Internet infrastructure and networking products and solutions. JNPR is a leader in the fast-growing IP networking industry and is gaining market share. The company is beginning to realize increased sales from services, cloud and security. Last quarter, JNPR reported a 31 per cent earnings surprise above consensus estimates. With the recent market decline, the shares are undervalued, trading at a 13x forward price-earnings multiple with a long-term projected earnings per share (EPS) compound annual earnings growth rate (CAGR) of about 12 per cent.
Last bought in August 2015 at approximately US $53
Initial purchase in December 2013 at ~US $38
Starbucks is the world's leading coffee retailer with over 22,000 stores operating in 67 countries. Starbucks is a premier large-cap growth name with one of the most recognized brands in the world. Its expansion into tea and juices, along with premium baked goods, provides additional innovative revenue streams. Longer term, the company's continued store expansions in international markets will drive sales. Most importantly, Starbucks enjoys strong pricing power given its remarkable customer loyalty. The company has a long-term projected earnings per share (EPS) compound annual earnings growth rate (CAGR) of 15-20 per cent.
Past Picks: September 11, 2014
Canadian Natural Resources (CNQ.TO)
Stop loss sold in August 2015 at approximately $27
Then: $45.33 Now: $27.90 -38.34% Total return: -36.62%
Mondelez International (MDLZ.O)
Sold April 2015 at approximately $38
Then: $35.75 Now: $43.72 +22.29% Total return: +24.29%
Micron Technology (MU.O)
Stop loss sold June 2015 approximately $24
Then: $32.04 Now: $16.41 -48.78% Total return: -48.78%
Total Return Average: -20.37%
Equity markets appear to have settled down somewhat relative to the turmoil experienced last month. However, investor sentiment remains fragile as concerns over the timing of Fed policy and economic stability in China remain top of mind. At a 17x forward price-earnings multiple, the S&P 500 represents fair value considering the low interest and low inflation environment. Nonetheless, the corporate earnings backdrop will need to improve for a meaningful advance to occur in the major equity indexes. Fortunately, economic indicators continue to signal expansion in the U.S. with labour, housing and consumer trends improving – this should help corporate earnings and ultimately allow for higher equity prices. In the meantime, it is likely that investor unease and market gyrations will persist.
At Stan Wong Private Wealth Management, we continue to seek opportunities in large-cap, high quality North American companies with solid earnings and positive growth attributes. We prefer U.S. equities over Canadian equities and favour companies in the consumer discretionary, health care and information technology sectors. Currently, we hold above-average cash weightings in our client portfolios to take advantage of any further tactical opportunities.