Paul Harris is a partner and portfolio manager at Avenue Investment Management. His focus is on North American and global equities.
Top picks:
Davis & Henderson
The company, which provides technology for the financial services industry, is expanding out of the traditional cheque-producing business through bolt-on acquisitions. The stock trades at 10 times earnings and has a 6.2-per-cent dividend yield.
Bank of America
Bank of America is one of the largest banks in the United States, holding 10 per cent of all deposits in the country. It continues to restructure by selling off non-core assets and reducing head count to cut costs. It is improving its capital base. The stock trades at 0.5 times tangible book value and 10 times earnings.
Brookfield Asset Management
Brookfield Asset Management is a global asset management company focused on property, infrastructure and renewable power. The company trades at 0.9 times NAV, 1.3 times book value and has a yield of 1.7 per cent.
Past Picks: Nov. 7, 2011
Microsoft
Then: $26.80
Now: $26.95
Total return: +4.22 per cent
TD Bank
Then: $73.33
Now: $81.04
Total return: +14.53 per cent
Telefonica
Then: $19.74
Now: $12.93
Total return: –29.27 per cent
Total Return Average: –3.5 per cent
Market outlook:
We believe the tremendous amount of globally outstanding sovereign debt will lead to slower growth around the world over the next several years. This will keep rates low for an extended period of time and inflation will be benign. In this environment, we look for companies with strong balance sheets and growing dividends.