Mike Newton
Mike Newton is portfolio manager and director at The Newton Group, ScotiaMcLeod. His focus is North American large caps and ETFs
Top Picks:
Walt Disney (DIS.N)
Recently purchased at $100 USD
Disney's recent share price decline of 15 per cent has created an attractive opportunity to buy this stock. The share price has now over-reacted to management's comments with the recent quarterly results in early August, where management lowered its guidance for cable networks' growth. The key focus going forward is the re-launch of the Star Wars franchise and the opening of the first theme park in mainland China. And we must not forget a pretty strong movie line-up over the next two years.
Vantiv (VNTV.O)
Recently purchased at $43 USD
Vantiv is a leading payment processor differentiated by an integrated technology platform. Vantiv is the second largest merchant acquirer and the largest PIN debit acquirer based on number of transactions in the U.S. They enjoy a referral channel of 1,400 banks, which are underpenetrated and can be used as a feeder pool for new deals. Additionally, continued reductions in ownership by Fifth Third Bank and private equity partners will help growth, given increased independence.
Alimentation Couche-Tard (ATDb.TO)
Recently purchased at $57 CAD
Alimentation Couche-Tard continues to execute well and there remains solid momentum in the business. As well, the first full quarter of The Pantry consolidation has shown good promise both on revenue and cost synergies. Alimentation Couche-Tard is among a few remaining growth stories in Canada that investors should add on instances of market weakness.
Past Picks: October 28, 2014
Gilead Sciences (GILD.O)
Then: $113.45 Now: $107.25 -5.47% Total return: -5.12%
Brookfield Asset Management (BAMa.TO)
*Stock Split* May 13, 2015: 3 for 2
Then: $54.05 Now: $40.87 +13.42% Total return: +14.95%
Alimentation Couche-Tard (ATDb.TO)
Then: $37.79 Now: $60.12 +59.09% Total return: +59.70%
Total Return Average: +23.19%
Market outlook:
One common element of current anxiety is that few investors feel they have a grasp on what has really happened. While most conclude that it was China, it's hard to see how this justified an evaporation of trillions of dollars in wealth. So what to do? In the near-term I would advocate elevated levels of cash (if you even have any cash) and wait for more concrete evidence of a stock market bottom. Waiting for the upcoming Fed rate decision and the Canadian election results will likely be part of a bottoming process. Longer-term, I would look for a strong buying opportunity sometime in October.