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3 top stock picks from T.I.P. Wealth Manager’s Jim Huang

Jim Huang is president of T.I.P. Wealth Manager Inc. His focus is on North American equities.

Top picks:

Granite Real Estate Investment Trust
With a new name (formerly MI Development), a new management team and now a newly minted REIT, Granite is set to create shareholder value by reducing costs, effectively utilizing its vastly under-levered balance sheet to broaden real estate holdings and grow dividends. It has a healthy dividend yield and the dividend is poised to grow substantially over time.

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Tricon Capital Group Inc.
Tricon is traditionally a North American real estate manager that offers its services to outside investors, as well as investing as an principal. Its recent entry into the U.S. residential housing leasing market brings the prospect of above-average returns just as the U.S. housing market recovers from the depth of the great real estate bust. Having obtained sufficient funding, Tricon is actively investing in the U.S. market. Investors can look forward to future capital gains for this business as well as current leasing income as protection.

(Short) Just Energy Group
Just Energy is at its core an energy marketing company. It is commonly valued as an utility company but its lacks the tangible asset base to provide downside protection. While it has achieved impressive growth in revenue and customer counts, this was largely achieved by acquisitions that resulted in high debt loads. High customer turnover means that the company has to spend heavily just to maintain the base, which drains cash flow. Even after the recent dividend cut, Just Energy is living beyond its means.

Past picks: March 01, 2012

Talison Lithium Ltd.
Then: $3.15
Now: $7.48
Total return: +137.46 per cent

Suncor Energy Inc.
Then: 35.84
Now: 31.56
Total return: –10.44 per cent

Granite Real Estate Investment Trust
Then: 36.89
Now: 38.94
Total return: +12.71 per cent

Total return average: +46.58

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Market outlook:

The rally in global markets over the past few month has indeed been impressive, especially considering the underlying economical growth has been sluggish. As was the case in the past few years, global central bankers once again rode to the rescue. The turning point came as the European Central Bank uttered the phrase, "Whatever it takes." Near term, there exist sufficient political will and financial firepower globally to prevent the worst-case scenario from happening. U.S. and Chinese growth is also set to stabilize and re-accelerate as policies become more stimulative. The outlook for the markets near term is reasonably positive; however, serious long-term challenges remain that, until resolved, will prevent a secular bull market.

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