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Gordon Reid is president and CEO of Goodreid Investment Counsel. His focus is U.S. equities.

Top Picks:

Clean Harbors Inc.

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Clean Harbors provides environmental and hazardous waste management services throughout North America. A recent acquisition of Safety-Kleen will provide cost synergies for the next couple of years and long-term opportunities are abundant. Growth is particularly brisk in the oil and gas services.

Goldman Sachs

As a premier global investment banking franchise, Goldman Sachs is biding its time until the pent-up demand of capital markets business breaks out. Goldman trades close to book value, well below valuation levels when capital markets are active.

Ryland Group

The purchase of Ryland is the first foray directly into home builders since Goodreid completely exited this sector in 2008. The Federal Reserve approach of slowly tapering as the economy strengthens is a Goldilocks scenario for home builders with expectations of more balanced lending standards and a continued improvement in consumer confidence. As the supply/demand imbalance corrects home builders will be the winners.

Past Picks: December 19, 2012

Apple

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Then: $526.31; Now: $553.13; Total return: +7.73 per cent

United Therapeutics

Then: $51.49; Now: $110.90; Total return: +115.38 per cent

Walgreen

Then: $37.24; Now: $56.63; Total return: +55.73 per cent

Total return average: +59.61 per cent

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Market outlook:

To date the policies of the Federal Reserve have worked. The equity market has driven higher due to valuations which have rapidly re-calibrated to historically normal levels and low interest rates have boosted earnings by expanding profit margins. Expect this situation to persist for some time.

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