Jim Huang
Jim Huang is president of T.I.P. Wealth Manager. His focus is North American equities.
Top Picks:
DIRTT Environmental Solutions (DRT.TO)
Purchased in Oct 2015 at $6.96
DIRTT (stands for "do it right this time") is not your average prefabricated office furniture company. Founded by industry veterans including Mogens Smed, DIRTT uses its proprietary 3D software to seamlessly integrate the design, manufacturing and installation process, ensuring on-time, on-budget experience. It is leveraging its network of partners to expand its reach globally and create solutions to new segments like health care, lodging and residential. Despite the drag from weaker energy industry orders, DIRTT remains one of the best companies that grows organically in a big market.
Transcontinental (TCLa.TO)
Purchased in Oct 2015 at $19.99
Transcontinental is well known as a proven efficient commercial printer, as well as publisher for trade magazines. With the internet revolution obliterating all things paper, the traditional business has been in a slow decline for the last decade, hence the stock's low valuation. Transcontinental has continued to cut costs, consolidate operations and generate good free cash flows which are used to pay a generous dividend and expand into new areas of growth. With further expansion into the higher-growth flexible packaging, Transcontinental has the potential to be rerated by the market while providing a sustainable yield.
George Weston (WN.TO)
Purchased in Aug 2015 at $112
George Weston is the parent company to Loblaw Companies, which includes the Loblaw group of supermarkets as well as Shoppers Drug Mart. With integration of the Shoppers acquisition and heavy investments in IT systems near completion, Loblaw is set to accelerate earning growth and potentially resume its share buybacks. The rest of George Weston consists of strong bakery operations, the Choice REIT and real estate holdings, which have become heavily undervalued recently. As the earnings contribution from the bakery operation improves, the stub portion should appreciate in value. This can be a standalone holding or held in combination with shorting Loblaw and the Choice REIT.
Past Picks: January 6, 2015
Suncor (SU.TO)
Then: $35.23 Now: $39.05 +10.84% Total return: +13.48%
Tricon Capital (TCN.TO)
Then: $8.53 Now: $10.69 +25.32% Total return: +27.44%
Granite Real Estate (GRT_u.TO)
Then: $43.43 Now: $37.68 -13.24% Total return: -9.11%
Total Return Average: +10.60%
Market outlook:
After recent volatility and the subsequent recovery, financial markets have resumed their uptrend. The spectre of imminent increase of benchmark interest rates continues to loom as the drum beat from the U.S. Federal Reserve has become more urgent. Valuation for most of the market is quite full after a good six-year run. There are also a multitude of geopolitical tensions and industry-specific challenges to contend with. However, global liquidity remains abundant, with the ECB and China being the latest central banks to engage in new stimulus programs. The U.S. economy is bouncing back from mid-year weakness and the employment picture grows brighter. China, Japan and Europe are all fighting hard to reaccelerate their recovery. Overall, the risk and reward for the rest of 2015 has become more positive after the recent pullback, but leadership may well shift. Stock picking takes on even more importance in this type of environment.