Charles Lannon is partner and head of global mandates, Toron AMI International Asset Management. His focus is global equities.
KDDI Corp. (9433 JP)
KDDI is a Japanese telco that is uniquely positioned in that market to offer a bundle of services. The stock is trading at a discount of over 15 per cent to its intrinsic value, has a 2.7-per-cent dividend yield, and offers one of the best operating profit and dividend growth profiles in global telecom stocks.
TD Bank (TD TSX)
Few banking systems even approach the stability and profitability of Canada's, and the valuation premium of Canadian banks vs. global peers has narrowed significantly in recent years. We expect TD to grow earnings by well over 10 per cent this year.
Cineworld Group PLC (CINE LN)
Cineworld is the largest cinema chain in the U.K., and its stock represents a low-risk investment to participate in the recovery of the U.K. economy. The dividend yield is 3.3 per cent, and we expect the dividend to grow rapidly due to growth from recently acquired assets in central Europe.
Past picks: April 2, 2013
MetLife (MET NYSE)
Then: $38.16; Now: $54.93 +43.95%
Total return: +48.43%
NUTRECO N.V. (NUO NV)
Stock split, 2 for 1 – May 2, 2013
Then: $71.42; Now: $31.30 –12.35%
Total return: –7.83%
Parkland Fuel (PKI TSX)
Then: $16.98; Now: $21.76 +28.06%
Total return: +36.83%
Total return average: +25.81 per cent
After a stellar 2013, global equity markets are off to a more subdued start in 2014. But global growth is firming with the U.S., the eurozone and Japan improving significantly this year. And because equities remain attractively priced, particularly compared to the main alternatives of bonds and cash, we expect global equities to continue to generate favourable absolute and relative returns over the medium term. Nonetheless we are in a period of both subdued growth and risk appetite, and investors should focus on fairly priced equities that offer the defensive characteristics of attractive and growing dividends, strong balance sheets and robust business models.