Lorne Steinberg is president and portfolio manager of Lorne Steinberg Wealth Management. His focus is on value stocks and high-yield bonds.
Manulife has spent the past few years repairing their finances and their business model in the aftermath of the financial crisis. They are now at a point where earnings growth should accelerate in 2013. Asian operations are a major growth driver. Valuation is cheap and dividend yield is 4.5 per cent.
Total, one of the largest global oil and gas companies, has returned to growth mode after a minor leak incident earlier this year. It is an excellent production profile, and relatively little debt. The dividend yield is 5.8 per cent and should grow with earnings over the next few years.
This is a great innovative Japanese engineering company which specializes in laminating and coating technology machinery. It has grown through successful investment in R&D, to while staying solidly profitable and debt-free. Despite the great track record and 3 per cent dividend yield, Hirano is actually trading at less than its net cash. Incredible value.
Past Picks: September 20, 2011
Total return: -0.95%
Koninklijke Philips Electronics NV
Total return: +43.90%
Total return: +63.00%
The global economy is still deteriorating, with the exception of the United States. The European crisis is far from over, and China's growth rate has slowed considerably due to weak export markets. With governments and consumers in deleveraging mode, economic growth will remain weak at least through 2013. Markets have been boosted by low interest rates and monetary stimulus, but this alone will not support existing valuations. We expect that markets will remain volatile and offer opportunities for patient investors.
See the BNN interview here