Genevieve Roch-Decter is portfolio manager at LDIC Inc. Her focus is North American energy infrastructure stocks.
Top Picks:
Badger Daylighting
North America's leading provider of non-destructive hydrovac excavation services for the oil and gas, power, municipal, transportation, industrial, and commercial construction industries. Strong organic growth and ROE has seen revenues and earnings double over the last 3 years. Growth is poised to accelerate as their operations in the U.S. continue to grow.
Quanta Services
Leading specialty contractor to the electric and gas utility and pipeline industries in North America. Spending on both pipelines & electric transmission is at a record high this year. We are in the midst of a multi-year infrastructure super cycle and PWR is well positioned to capitalize on this spending.
AltaGas
North American midstream energy infrastructure company, evenly split between gas processing, clean power and utilities. Has undergone significant growth over the last 5 years with EBITDA increasing 40 per cent since 2009 and poised to double over the next few years on $2.5-5-billion in capital spending plans. This is a core holding with double digit EPS & dividend growth.
Past Picks: August 28, 2013
Trinity Industries
Then: $42.42
Now: $52.09
Total return: +23.21 per cent
Inter Pipeline
Then: $24.10
Now: $25.36
Total return: +6.56 per cent
Badger Daylighting
Then: $56.00
Now: $83.20
Total return: +49.13 per cent
Total return average: +26.30 per cent
Market outlook:
Global recovery is underway driven by stimulus in Japan and the U.S. and improving economic data in the U.S., U.K. and China. Strong housing sales as well as record automobile and truck sales convince us the consumer confidence is returning to the world's largest economy. This optimism has been tempered by occasional bouts of rising interest rate jitters and fear of premature stimulus reduction (also known as tapering). We believe tapering will occur sometime over the next 12 months but until signs of inflation appear interest rates will remain low. As such we believe flows out of fixed income and into equities will continue.