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Three top stock picks from Wickham’s Michael Bowman

Michael Bowman is executive vice-president and portfolio manager at Wickham Investment Counsel Inc. His focus is North American large caps and ETFs.

Top Picks:


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The stock gapped down after disappointing earnings a week ago. Gaps always get filled in so the stock should soon return to the $88 (U.S.) level. The business is highly dependent on global economic conditions which I see improving. Caterpillar pays a 2.9-per-cent dividend. The 52-week low is around $79 and I don't see the stock falling below that level. Put in a stop at $78.90.

Powershares Dynamic Basic Materials Sector Portfolio ETF

Companies in the ETF are purchased based on price momentum, earnings momentum, quality, management action, and value. These are companies that are engaged in the business of producing raw materials. It is rebalanced quarterly. 63-per-cent chemicals, 15-per-cent containers and packaging, 13-per-cent paper and forest products and 8-per-cent metals and mining. 75 per cent of the portfolio is mid cap and small cap growth and value.

Precision Drilling

The company is Canada's largest drilling rig provider with operations in Canada, the U.S., Mexico and the Arabian Gulf region. Precision Drilling also provides other services to the oil industry. They have recently increased the dividend and provided a strong business outlook. There have been three new rig builds for the U.S. operation. According to the IEA the U.S. will be the world's largest oil producer in 2017. Precision pays a 2.2-per-cent dividend.

Past Picks: November 29, 2012

Aecon Group
Then: $10.40
Now: $14.13
Total return: +39.45 per cent

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BMO Equal Weight Industrials ETF
Then: $15.46
Now: $20.32
Total return: +33.79 per cent

Alimentation Couche-Tard
Then: $48.72
Now: $70.22
Total return: +44.93 per cent

Total return average: +39.39 per cent

Market outlook:

Investors are entering the perfect storm and should be loading up the trunk with equities. The U.S., which careens from one self-induced crisis to another, is taking a breather before the toxic political machine starts to rumble again in 2014. Europe is out of recession, China is gaining strength, and equity prices usually move higher in the fourth quarter. In the U.S., unemployment is falling, housing starts and prices are rising, and car sales will be the highest on record in 2013. What more needs to be said? All together now.....BULL MARKET.....BULL MARKET.....

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