Jim Huang is president of T.I.P. Wealth Manager. His focus is North American equities.
Magna International (MG.TO)
Purchased in February 2016 at $46.65
Magna is one of the largest auto parts suppliers in the world and has leading technology in many areas. It has a global footprint and recently enhanced its exposure to the fast growing Chinese market beyond its traditional strength in North America and Europe. With a good balance sheet, reasonable dividend yield and an auto cycle that's still in full upswing, Magna has been unduly depressed by recent market volatilities and present a good entry point into a premier franchise.
Sleep Country Canada (ZZZ.TO)
Purchased in January 2016 at $15.44
Well-known for its jingle, Sleep Country Canada is the No. 1 mattress retailer in Canada. With consumers' increasing focus on health and wellness, good quality mattresses enjoy a broad market. In Canada, the decline of mid-tier department store retailers opens the door for incremental market share for strong operators. Sleep Country Canada has stepped up its powerful advertising campaign and expanded its offering to higher-margin accessories. Rejoining the public market less than a year ago, Sleep Country Canada is yet to be discovered by many investors as a dominant Canadian retailer.
Dirtt Environmental (DRT.TO)
Purchased in February 2016 at $5.40
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 an on-time, on-budget experience. It is leveraging its network of partners to expand its reach globally, and create solutions for 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. Recent corrections only makes Dirtt more attractive.
Past Picks: May 14, 2015
Whistler Blackcomb (WB.TO)
Then: $19.61 Now: $24.88 +26.87% Total return: +32.50%
Then: $18.41 Now: $19.47 +5.76% Total return: +8.99%
DIRTT Environmental Solutions (DRT.TO)
Then: $8.26 Now: $5.36 -35.11% Total return: -35.11%
Total Return Average: +3.13%
So far in 2016, the sharp declines and subsequent recoveries in the global stock market have been unsettling, but it'll likely turn out to be transitory. The advent of benchmark interest rate increases in the U.S. is bound to create uncertainties for investors who have gotten used to a long period of lower interest rates. Coupled with the stagnant global economic growth and talk/adoption of negative interest rates outside the U.S., the outlook has been muddled and investor confidence shaken.
However, there are no imminent signs of economic recession worldwide, and global liquidity remains abundant. The U.S. economy is bouncing back from seasonal weakness and the employment picture keeps growing brighter. Overall, the pullback in stocks has cleansed some valuation excess in the market and created buying opportunities in many. Although volatilities are not likely to disappear in the near-term, the risk and reward for the rest of 2016 is favourable.