Barry Schwartz, vice president and portfolio manager with Baskin Financial Services
Barry Schwartz is vice president and portfolio manager with Baskin Financial Services. His focus is on North American Large Cap stocks.
Top picks:
Viacom
Viacom is a worldwide entertainment giant that owns television, film and digital media platforms. The company generates an enormous amount of free cash flow which is being used to buy-back shares and increase dividends.
Shoppers Drug Mart
We view Shoppers Drug Mart's stock like a long dated bond that offers a rising coupon each year. We expect the company to reward patient investors with a rising stream of dividend payment as well as share buybacks. While it faces increasing regulatory and competitive risks, its stock trades at an undemanding valuation.
Apple
Even though its stock is up 50 per cent this year, Apple's valuation is very cheap given its growth potential and cash on hand. An endless stream of new products and upgrades should satisfy consumer demand for years.
Past picks: Oct. 20, 2011
Potash Corp.
Then: $49.20
Now: $40.27
Total return: -17.09 per cent
Barrick Gold
Then: $44.94
Now: $38.60
Total return: -12.66 per cent
Brookfield Asset Management
Then: $27.80
Now: $34.07
Total return: +24.67 per cent
Total Return Average: -1.69 per cent
Market outlook
With the expectation that forward earnings growth will be less robust than in previous years, investors need to maintain an active approach to portfolio management. Stick with companies that are shareholder-friendly and trade at reasonable valuations to earnings. Take advantage of the strong Canadian dollar in order to increase foreign exposure. In the U.S., focus on companies in financial, technology, health care and consumer staple sectors. Avoid mimicking the Toronto index. It is too heavily weighted toward volatile commodities and cyclical companies. Above all, dividend yield and dividend growth should continue to be winning strategies as long as interest rates remain comatose. Fixed income performance continues to defy skeptics but we believe the bell has tolled for the bond bull.