Norman Levine.Fred Lum/The Globe and Mail
Norman Levine is managing director at Portfolio Management Corp. His focus is on North American large caps.
Top picks:
Callaway Golf
We like Callaway as a turnaround story. A new CEO with lots of golf business experience (ex-CEO of Adams Golf) is making major changes in Callaway's product offerings, manufacturing footprint and balance sheet. Turnarounds take time but we believe he is doing the right things.
BB&T Corp.
BB&T is a very high-quality bank in the U.S. Southeast. It has an excellent balance sheet which is enabling it to steal business from lesser capitalized rivals. BB&T is also an excellent vehicle to play the U.S. housing recovery as it provides loans and mortgages to the building industry.
Vodafone Group PLC
The main attraction to Vodafone is its 45-per-cent ownership of Verizon Wireless. We expect Verizon, at some time in the future, to either buy Vodafone's interest in Verizon wireless, to buy all of it, or to merge with Vodafone. In the meantime, we expect Verizon Wireless to grow the dividend it pays to Vodafone and for Vodafone to use these substantial cash payments to raise its own dividend, buy back shares and reduce its debt.
Past picks: March 20, 2012
Corning Glass Works
Then: $14.05
Now: $12.88
Total return: –5.77 per cent
Badger Daylighting Ltd.
Then: $25.69
Now: $34.87
Total return: +40.82 per cent
Sun Life Financial Inc.
Then: $23.13
Now: $28.80
Total return: +32.03 per cent
Total return average: +22.36 per cent
Market outlook:
We are positive on equity markets and negative on bonds. We believe the risk-reward ratio on bonds is quite unattractive. The chances of interest rates on bonds going up is far greater than the chances of them going down. Additionally, the amount you can make in the bond market on a bet on interest rates declining is quite small whereas the amount you can lose should interest rates go up can be quite high. Our positive outlook for equities is based on our belief that the U.S. economy will be stronger than most expect and that will have a continuing positive effect on equities.