Gordon Reid is the president and chief executive officer of Goodreid Investment Counsel. His focus is on U.S. equities.
Top picks:
AIG Inc.
The final stages of AIG's reorganization are near and with a 15% stake the U.S. Treasury is now a minority owner of the stock. Goodreid expects the U.S. Treasury to fully divest in 2013, leaving AIG free to continue buybacks and reinstate a dividend. It holds a material deferred tax asset and is trading at just 10 times earnings.
Qualcomm Inc.
A producer of CDMA based integrated circuits; over 70% of Qualcomm's revenue comes from licensing arrangements. With one of the largest patent portfolios in the world QCOM benefits every time a 3G or LTE device is sold, an exciting prospect as the adoption of mobility devices explodes worldwide.
Crane Co.
Crane is a diversified manufacturer, producing everything from vending machines to aircraft brake systems. With significant earnings power, an attractive dividend and a free cash flow yield of 8%, Crane offers the potential for long term growth.
Past picks: Oct. 24, 2011
The Walgreen Company
Then: $34.31
Now: $35.49
Total return: +6.42 per cent
Visa Inc.
Then: $94.21
Now: $137.31
Total return: +46.96 per cent
InterDigital Inc.
Then: $49.31
Now: $34.99
Total return: -28.22 per cent
Total Return Average: +8.39 per cent
Market outlook
Equity markets, particularly in cyclical areas, have corrected sharply after a solid advance. While earnings season will be difficult due to weak global economies, foreign exchange losses and reluctance by corporations to invest within an unsettled macro environment, Goodreid views this period as transitory and is bullish on equities, especially those that are U.S. based.
Watch Mr. Reid on BNN.