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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.

Top Picks:

BlackRock Inc. (BLK-NYSE)

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BlackRock is the world's largest asset manager with over $4.6-trillion (U.S.) in assets under management. BlackRock holds an enviable position in the fast-growing passive investing segment through its iShares exchange-traded funds (ETF) franchise. BlackRock should also attract healthy asset inflows through its strong fixed income business. BLK's valuation is attractive, currently trading at a forward price-earnings multiple of 17x with a long-term expected annual earnings growth rate of 10 to 12 per cent. As well, the shares pay a decent dividend yield of 2.4 per cent with a solid expected dividend growth rate of over 10 per cent per year over the next few years.

Macy's (M-NYSE)

Macy's is the largest department store retailer the U.S., operating over 840 stores under the Macy's and Bloomingdale's brands. Macy's is a very well-managed retailer executing strongly with various in-store, online and marketing initiatives. An improving U.S. labour market and lower energy costs should act as catalysts to Macy's top-line growth. Macy's shares trade at a forward-price earnings multiple of 13x with a long-term expected annual earnings growth rate of about 10 per cent. The shares currently pay a modest dividend yield of 1.9 per cent which should grow steadily over the next several years.

Union Pacific Corp. (UNP-NYSE)

Union Pacific operates the largest rail transportation company in the U.S., covering 23 states in the western two-thirds of the country. Union Pacific ships a diverse array of items including coal, grain, food, raw materials, auto parts and finished vehicles. Accelerating growth ahead for the U.S. economy bodes well for cyclical stocks including rail transportation companies such as Union Pacific. Volume growth, pricing power and efficiency gains should help UNP's operations. UNP trades at a forward price-earnings multiple of 17x with a long-term expected annual earnings growth rate of about 13 per cent.

Past Picks: February 13, 2014

General Electric (GE-NYSE)

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Then: $25.44; Now: $24.28 -4.56%; TR: -1.23%

Gilead Sciences (GILD-Nasdaq)

Then: $82.55; Now: $105.11 +27.33%; TR: +27.33%

Starbucks (SBUX-Nasdaq)

Then: $74.69; Now: $82.74 +10.78%; TR: +12.03%

Total return average: +12.71%

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Market outlook:

Equity markets have stumbled somewhat out of the gate to start the year. Concerns over global economic growth, lingering geopolitical pressures and a sharp decline in commodity prices have caused investor anxiety to climb recently. It is likely that stock markets will remain a bit unsettled until we see some more stabilization in energy prices. On the positive side, lower energy prices should produce a net benefit to the U.S. economy as it acts as a stimulus for consumers and other users of energy. We expect the improving U.S. economy should help U.S. stocks grind higher this year but the path will certainly be bumpier as volatility levels normalize. In Canada, energy remains the biggest wildcard (and perhaps biggest opportunity) as supply conditions are expected to tighten in the second half of the year. In our portfolios, we continue to prefer high quality, large-cap U.S. cyclical equities to reflect the improving economic fundamentals south of the border.

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