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David Driscoll is partner at Toron AMI International Asset Management. His focus is on global equities.

Top Picks:

Fortis (FTS TSX)

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Fortis is the largest investor-owned gas and electric distribution utility in Canada. Its regulated utilities account for 90 per cent of total assets and serve more than 2.4 million customers across Canada and in New York State and the Caribbean. Fortis owns non-regulated hydroelectric generation assets in Canada, Belize and upstate New York. The corporation's non-utility investment is comprised of hotels and commercial real estate in Canada. It is also waiting on approval of its proposed merger with UNS Energy, an electric utility in Arizona.

Relative to other Canadian utility stocks, Fortis trades at a lower price/earnings ratio. Earnings are expected to rise in the coming years as recent acquisitions and construction projects are completed. This may provide for greater dividend increases. Finally, if rates stay low, its 4-per-cent yield is attractive.

Getinge AB (GETIB SS)

Getinge AB is a Sweden-based company active in the health care sector. The life sciences division provides contamination prevention for clients in the production and bio-medical research fields. Its health care division supplies equipment and services for cleaning, disinfection and sterilization of surgical instruments.

The stock is 22-per-cent off its 52-week high after an earnings disappointment, profits that should recover in 2015. Dividend and price growth has averaged 15 per cent per year.

FEI Company (FEIC Nasdaq)

FEI Company enables customers to find meaningful answers to questions that accelerate breakthrough discoveries, increase productivity, and ultimately change the world. FEI designs, manufactures and supports the broadest range of high-performance microscopy work flows that provide images and answers in the micro-, nano-, and picometer scales.

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It trades at a PEG ratio (P/E versus earnings growth rate) of 0.6, it has little debt and its payout ratio is small (14 per cent), leaving plenty of room for future dividend increases. Its stock is 26-per-cent lower than its 52-week high as orders expected in the first-half of the year are expected to come in later quarters.

Past Picks: November 28, 2013

Balchem Corp. (BCPC NASDAQ)

PAST COMMENTARY: Balchem is a specialty chemical maker in the agribusiness and oil and gas fracking sectors. Dividends have grown 20 to 30 per cent for the past 10 years. While the yield is small, it's because the stock price has risen in tandem with the dividend.

Then: $59.11; Now: $53.46 -9.56%; Total return: -9.15%

AmerisourceBergen Corp. (ABC NYSE)

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PAST COMMENTARY: AmerisourceBergen is a distributor of health care products to hospitals, pharmacies and doctors' offices. With its Walgreen-Boots partnership, ABC now has an opportunity to gain access to new global markets. Dividend growth has averaged 10 to 20 per cent a year.

Then: $70.50; Now: $69.79 -1.01%; Total return: -0.32%

ELEKTA AB (EKTAB SS)

PAST COMMENTARY: Elekta is a Swedish health care company that makes hardware and software for the radiation treatment of cancer and neurological diseases. Emerging market demand for its products have helped earnings and dividends grow at a 20-per-cent clip for the past five years.

Then: SEK 98.75; Now: SEK 95.05 -3.75%; Total return: -3.75%

"Now" figures are intraday from the date of the analyst's appearance on BNN Market Call.

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Total return average: -4.41%

Disclosure:

Personal

Family

Portfolio/Fund

BCPC

Y

Y

Y

ABC

Y

Y

Y

EKTAB

Y

Y

Y

Market outlook:

Jeremy Grantham said it best when he opined that stock valuations are stretched. While the market could continue higher in the coming years, the higher it goes, the greater it has to fall. I agree with this assessment.

Global economic growth is sluggish (U.S. and Canada) or non-existent at best (Europe) and nowhere near where it needs to be to justify such current lofty valuations. Earnings are rising because of the positive influence of share buybacks, some organic growth and acquisitions, less foreign exchange losses. CEOs who I have heard on conference calls have stated there's nothing to buy as private equity firms have pushed prices so high that a takeover isn't economically viable.

While it's important to invest in businesses for the long-term and not trade stock prices, there's nothing wrong with keeping some cash available to take advantage of any market or individual stock corrections that may provide better value.

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