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Robert McWhirter is president, Selective Asset Management. His focus is Canadian and technology stocks.

Top Picks:

Celestica (CLS TSX)

Celestica is diversifying away from high volume, commodity production to more stable, higher margin, long product cycles in the medical and aerospace industries. Celectica's 12.5-per-cent forecast return on equity, 8.5-per-cent trailing free cash flow yield , $483-million cash (23 per cent of market cap) and 7 times enterprise value to trailing EBITDA appear attractive.

Delphi Energy ( DEE TSX)

Delphi now uses slick water fracking, injecting five times more water and two times more sand into it's horizontal wells. Production is three times that of conventional fracking and wells pay off the cost of drilling in less than a year. Analysts have increased their 2014 earnings estimates by 23 per cent in the past 60 days. Delphi trades at a 24 per cent and 16 per cent premium on a price to forecast cash flow basis for 2014 and 2015 compared with the average energy company . However, cash flow is forecast to grow 4.9 times and 1.9 times faster in 2014 and 2015, respectively, compared with the average energy company.

Evertz Technologies (ET TSX)

Evertz's market is expanding beyond conventional TV broadcasters as "over the top" providers deliver content to consumers. Evertz technology easily handles the explosion of combined voice, video and data traffic for OTT and Web 2.0. Evertz's has a 22-per-cent forecast return on equity and earnings are forecast to grow 76 per cent year over year when they report on June 11. Evertz's 13.4 times enterprise value to earnings for the April 30, 2016, fiscal year appears attractive relative to analysts' 24-per-cent forecast earnings growth for fiscal 2016.

Past Picks: Oct. 9, 2013

Valeant Pharmaceuticals (VRX TSX)

Then: $111.17; Now: $136.78, +23.04%

Total return: +23.04%

Avigilon (AVO TSX)

Then: $18.62; Now: $22.75, +22.18%

Total return: +22.18%

CGI Group (GIB.A TSX)

Then: $36.38; Now: $36.86, +1.32%

Total return: +1.32%

Total return average: +15.51%

Market Outlook:

Equity markets around the world are moving up, reflecting the continuation of accommodative government monetary policies and the gradual improvement in world economic growth. Weekly uptrends in oil and natural gas are expected to continue to drive Canadian energy stocks higher. We expect a summer rally in equities.

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