Michael Sprung is president of Sprung Investment Management Inc.
Michael Sprung is president at Sprung Investment Management. His focus is Canadian large caps.
Top Picks:
Alaris Royalty (AD.TO)
Alaris Royalty is a unique investment firm that invests in a diversified range of private companies with solid long term histories and stable management teams. The nature of the investment allows Alaris to participate in future growth while the entrepreneurs maintain control provided certain agreed upon benchmarks are met. Management has had a successful track record in identifying good investment opportunities. Last week, management announced the largest investment to date in a construction firm in Texas. As investments and cash flow have grown, dividends have increased. We anticipate that investors will continue to participate in Alaris' growth.
ARC Resources Ltd. (ARX.TO)
ARC Resources is a Canada-based oil and gas company. The company's business activities include the exploration, development and production of crude oil, natural gas and natural gas liquids in five core areas across western Canada. The company is also engaged in the Sunrise gas plant construction. Its operations are focused in five core areas across western Canada. ARC Resources has a strong balance sheet and the dividend is well covered even at current commodity prices. The shares offer an attractive yield of 5.5% at current prices.
CAE Inc. (CAE.TO)
CAE Inc. is a Canada-based company that provides modelling, simulation and training for civil aviation and defence. The company has a good balance of customers between military and civil applications. CAE has invested over the last few years in expanding training facilities in anticipation of a pending higher turnover in pilot retirements over the coming years resulting in greater demand for training services. As such, utilization rates should increase as capital expenditures are reduced. CAE is well financed and managed.
Past Picks: June 16, 2014
*NOTE: RETURNS ARE INTRA-DAY*
Manulife Financial (MFC.TO)
Then: $20.61; Now: $23.39; +13.49%; Total return: +16.81%
The North West Company (NWC.TO)
Then: $23.57; Now: $23.51; -0.25%; Total return: +4.61%
HudBay Minerals (HBM.TO)
Then: $9.78; Now: $11.88; +21.47%; Total return: +21.71%
Total Return Average: +14.38%
Disclosure: | Personal | Family | Portfolio/Fund |
MFC | Y | N | Y |
NWC | N | N | Y |
HBM | N | N | Y |
Market outlook:
After a number of years of positive performance, North American markets are looking a bit stretched. In Canada, the retreat in energy prices continues to reverberate through the economy. In the U.S., valuations are appearing somewhat on the high side and investors are wary of any impending interest rate hikes. Given the strength of the U.S. dollar, we do not believe rate hikes are likely in the immediate future. Despite the slower rate of growth in China, the market there continues to reach new highs despite falling export and import levels. Commodities have been constrained by the anticipated lower demand levels from China. The European economy appears to be stabilizing to some degree with the obvious problems in Greece, Portugal and Spain still weighing on investors' concerns. In this environment, we would not be surprised to see a pullback in the markets that would afford investors the opportunity to find better values.