Christine Hughes is president and chief investment strategist at OtterWood Capital Management. Her focus is North American equities.
Canadian Natural Resources Ltd. (CNQ TSX)
Last year the Canadian energy space was hated, our oil was landlocked, and U.S. energy prices were much higher than Canada's. What a difference a year makes. We really like the Canadian energy space and CNQ provides a combination of oil/gas/growth/yield/liquidity/valuation all rolled into one package.
Chemtrade Logistics Income Fund (CHE.UN TSX)
Chemtrade is a diversified chemicals business producing lots of stuff you haven't heard of before with a variety of uses. Top line growth tends to be GDP-like, and cost structure changes are shared in the upside/downside. The company completed a recent acquisition and has yet to see the benefits of the synergies. What you get is extremely stable margins, and get to collect a 6-per-cent dividend, paid monthly, while you wait it out.
Yamana Gold (YRI TSX)
We believe the market will start paying attention to this name in the second half of the year. While they've had some development issues from the small mines, this is more than priced in. Expected to generate 50-per-cent free cash flow growth in the next 2 years. The stock price is not reflecting this yet.
Past Picks: December 10, 2013
BSM Technologies (GPS TSX-V)
Then: $3.19; Now: $2.10 -34.17%; Total return: -34.17%
DHX Media (DHX TSX)
Then: $4.72; Now: $6.15 +30.30%; Total return: +30.91%
Boyd Group Income Fund (BYD.UN TSX)
Then: $29.08; Now: $44.19 +51.96%; Total return: +53.01%
Total return average: +16.58%
"Now" figures are intraday from the date of the analyst's appearance on BNN Market Call.
We continue to be positive on both U.S. and Canadian equities. We view any short term correction as a buying opportunity as we believe the economic expansion in the U.S. and Canada is broadening out. As we enter the second half of the business cycle, value areas of the market outperform growth and Canada, especially, represents value.