Christine Poole, CEO and managing director of GlobeInvest Capital Management
Focus: North American large caps

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MARKET OUTLOOK

Global equity markets continue to grind higher due to a strengthening global economy, albeit after many years of extraordinarily accommodative policy measures by numerous central banks following the Great Recession. Inevitably, interest rates will trend higher as accommodative stances are removed, but with tepid inflationary pressures, the pace is expected to be measured. Q3/17 earnings reports for the S&P500 companies are nearly complete and have been better than expected, with earnings per share (EPS) up over eight per cent from a year ago versus consensus of five per cent. This marks the fifth consecutive quarter of positive EPS growth. For the year, EPS is expected to be up 11 per cent, the first double-digit pace since 2011. With broad market indices trading at elevated valuation levels relative to history, corporate profit growth is necessary for equity markets to maintain their upward momentum. So far, economic indicators, surveys and sentiment gauges all suggest accelerating economic growth. Our constructive view on equities remains intact.   

TOP PICKS

Christine Poole's Top Picks

Christine Poole, CEO and managing director at GlobeInvest Capital Management discusses her Top Picks: Cineplex, CGI Group, Mondelez

CINEPLEX (CGX.TO)
Cineplex is the leading film exhibitor with a 78 per cent share in the Canadian market. Its operating segments include film entertainment and content (50 per cent of revenues from box office and 25 per cent from food service), amusement and leisure (15 per cent) and media (10 per cent). Initiatives to diversify away from the box office include growing its digital media business, building its eSports franchise, opening Rec Room restaurants as well as other leisure/gaming concepts, such as Topgolf and Playdium. Cineplex offers an attractive dividend yield of 4.7 per cent. Recent purchase price in the $37.40 range in November 2017.

CGI GROUP (GIBa.TO)
CGI is a global technology services firm deriving 53 per cent of its revenues from outsourcing and 47 per cent from systems integration and consulting. Its revenue breakdown by geography consists of approximately 50 per cent from Europe, 29 per cent from the U.S., 16 per cent from Canada and 5 per cent from Asia Pacific. CGI services numerous sectors including government, financial services, health care, telecommunications and utilities and manufacturing/retail/distribution. CGI benefits from the need for enterprises to develop a digital platform, to explore digital technologies including artificial intelligence and to formulate a cybersecurity solution to protect their businesses. Management remains focused on creating shareholder value through profitable organic growth, accretive acquisitions at reasonable prices within a consolidating IT services market and share repurchases. Recent purchase price in the $65.85 range in November 2017.

MONDELEZ (MDLZ.O)
MDLZ is the snacking leader with #1 global share in biscuits and candy as well as #2 in chocolate and gum. By category, biscuits represent 41 per cent of sales, with chocolate at 30 per cent, gum and candy at 15 per cent, cheese and grocery at eight per cent and beverages at six per cent. Its portfolio of leading brands include Oreo, beVita, Cadbury, Toblerone, Trident, Dentyne and Halls. With over 40 per cent of its revenues from emerging markets, Mondelez is well-positioned to benefit from the growing middle class population over the next 15 years. Per capita consumption of confectionary and biscuits in developing countries are significantly below that of developed countries and is expected to increase as personal income levels rise. Mondelez provides investors with a dividend yield of 2.1 per cent.

 

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
CGX Y Y Y
GIBa Y Y Y
MDLZ Y Y Y

PAST PICKS: NOVEMBER 15, 2016

Christine Poole's Past Picks

Christine Poole, CEO and managing director at GlobeInvest Capital Management discusses her Past Picks: Chartwell Retirement Residences, Alphabet and Home Depot.

CHARTWELL RETIREMENT RESIDENCES (CSH_u.TO)

  • Then: $14.39
  • Now: $15.56
  • Return: 8.13%
  • Total return: 12.27%

ALPHABET (GOOGL.O)

  • Then: $775.16
  • Now: $1,042.95
  • Return: 34.54%
  • Total return: 34.54%

HOME DEPOT (HD.N)

  • Then: $124.40
  • Now: $164.33
  • Return: 32.09%
  • Total return: 35.18%

TOTAL RETURN AVERAGE: 27.33%

 

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
CSH_u Y Y Y
GOOGL Y Y Y
HD Y Y Y

TWITTER: @christine_globe
WEBSITE: www.globe-invest.com