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bnn market call

Greg Newman.

Greg Newman is director and associate portfolio manager at Newman Group, ScotiaMcLeod. His focus is on Canadian dividend stocks and protection strategies.

Top Picks:

Hudson's Bay Co. (HBC TSX)

HBC provides Canadian investors a way to benefit from the improving strength of the U.S. consumer, with more than 60 per cent of its revenues coming from the United States. We believe revenue growth, merger synergies and higher margins should eventually surface from the new entity. We believe shareholders can also benefit from a real estate value accretion strategy that should be announced before next spring.

Intact Financial (IFC TSX)

IFC is a highly resilient, defensive business that benefits from steady organic growth and past merger synergies. Operating in a highly fragmented market with a strong balance sheet, we believe future acquisitions serve as an embedded future price catalyst.

Canadian Natural Resources (CNQ TSX)

CNQ at this time should be fairly insulated from falling WTI oil prices as it gets much of its pricing from WCS or Western Canada Select. Buy this name on oil pullback concerns as we believe shareholders should eventually benefit from dividend hikes and buybacks as a result of growing annual free cash flows.

Disclosure:

Personal

Family

Portfolio/Fund

HBC

Y

Y

Y

IFC

Y

Y

Y

CNQ

Y

Y

Y

Past Picks: October 2, 2013

Algonquin Power (AQN TSX)

Then: $6.38; Now: $8.98 +40.67%; Total return: +45.38%

Enerplus (ERF TSX)

Then: $17.05; Now: $20.32 +19.18%; Total return: +24.70%

Vanguard FTSE Europe ETF (VGK NYSE)

Then: $54.87; Now: $57.49 +4.37%; Total return: +8.55%

Total return average: +26.21%

"Now" figures are intraday from the date of the analyst's appearance on BNN Market Call.

Disclosure:

Personal

Family

Portfolio/Fund

AQN

Y

Y

Y

ERF

Y

Y

Y

VGK

Y

Y

Y


Market outlook:

While some may breathe a sigh of relief from favourable Scottish and Fed events this week, greater volatility may now be with us given the recent economic slowdown in Europe, a higher U.S. dollar and the end of Federal Reserve asset purchases in October. While stocks are more expensive than they were, they are still far more compelling than bonds. As such, I believe the bull market should continue. Buy companies that can grow their business and/or their dividend at a level that is not presently reflected in the share price.