Peter Brieger.
Peter Brieger is chief executive officer and managing director of GlobeInvest Capital Management. His focus is on North American large caps.
Top picks:
Toronto-Dominion Bank
Given our positive macro-economic view for North America, we think TD's U.S. presence will prove to be a positive for overall results. Recent card additions will also help. Based on the consensus one-year forward earnings, TD is one of the cheapest at a price-earnings ratio of 10.7 times. Assuming a brief market pullback, a desired entry point would be between $82 and $82.50 with a one-year target of $90.
Agrium Inc.
The long-term rationale remains in place; that is, the need for governments in developing nations to feed their populations. In the short term, Agrium's share price is clearly being influenced by an aggressive marketing campaign by agents of hedge fund Jana to persuade investors to vote for its board nominees. As the price approaches our target price, we will consider selling as questions still remain about this summer's crop growing conditions. Entry point: current price, with a one-year target of $125.
Tetra Tech Inc.
With an anticipated pickup in industrial activity in Tetra Tech's main markets, we think there could well be unexpected upside potential. It is a world leader in providing consulting, engineering and project management in the water and environmental areas. Entry point: current price, with a one-year target of $32.50.
Past picks: Jan. 25, 2012
Central Fund of Canada
Then: $22.50
Now: $21.97
Total return: –2.31 per cent
Bonavista Energy
Then: $22.80
Now: $14.60
Total return: –30.56 per cent
Scorpio Gold
Then: $0.91
Now: $0.63
Total return: –30.77 per cent
Total return average: –21.21 per cent
Market outlook:
There is growing evidence of a marked improvement in both the Chinese and U.S. economies, which in our view may provide positive leverage for companies' revenues and earnings. Europe is still in the economic doldrums. There is a growing perception – which we share – that absent any fiscal shocks, particularly in the U.S. related to budget deficits and government debt, markets have started to discount a re-acceleration on growth in 2013 and 2014.
Improving earnings and a possible upward adjustment of market multiples imply double-digit growth for the TSX and the S&P 500 in 2013. Also helping is that this may be the year when we see a reversal of past flows from equities to bonds. However, in the very short term, markets are over-bought. We would use any weakness as a buying opportunity.