Gordon Reid, president and CEO of Goodreid Investment Counsel
Focus: U.S. equities

MARKET OUTLOOK

While Goodreid believes that the fourth quarter correction was overdone, we’re somewhat surprised by the dramatic snapback that we’ve witnessed in the first quarter of 2019. The rally has been largely spurred by a reversal in approach by the U.S. Federal Reserve. This year could well see a more tepid economic and corporate performance, but in a reversal from 2018 markets may surprise to the upside.

UPDATE: Past pick Walgreens sold in March 2019 at $66.

TOP PICKS

HALLIBURTON (HAL.N)
Latest purchase on March 2019 at $28.

Halliburton, along with its industry peers, has struggled in an era of increased oil supply and operating difficulties. The industry cycle appears to be turning. With the company trading near 10-year lows, international operations picking up, more pipeline capacity coming on in the Permian and OPEC and Russia buying into the new reality within the energy world, look for Halliburton to appreciate.

MORGAN STANLEY (MS.N)
Latest purchase on March 2019 at $41.

Morgan Stanley has successfully transitioned from an emphasis on institutionally-focused fixed income business to a wealth management platform (44 per cent of revenues). Trading at half of the market multiple on earnings and 90 per cent of book value, this company is significantly undervalued.

UNITED CONTINENTAL (UAL.O)
Latest purchase on March 2019 at $85. 

Airlines are trading vehicles. At this point in the cycle, United Continental is hitting on all cylinders but getting no love. Revenue per available seat mile was up 4.3 per cent in 2018. Management is guiding to $10 to $12 per share in earnings, up from $9.18 in 2018. At seven times earnings, Goodreid sees significant upside before this cycle ends.

 

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
HAL Y Y Y
MS Y Y Y
UAL Y Y Y

 

PAST PICKS: MARCH 14, 2018

BANK OF AMERICA (BAC.N)

  • Then: $32.14
  • Now: $28.20
  • Return: -12%
  • Total return: -11%

FACEBOOK (FB.O)

  • Then: $184.19
  • Now: $165.12
  • Return: -10%
  • Total return: -10%

HOME DEPOT (HD.N)

  • Then: $177.41
  • Now: $187.64
  • Return: 6%
  • Total return: 8%

Total return average: -4%

 

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
BAC Y Y Y
FB Y Y Y
HD Y Y Y

 

FUND PROFILE

Goodreid’s North American Balanced
Performance as of: Dec. 31, 2018

  • 1 year: -2.4% fund, -6.6% index
  • 3 years: 4.9% fund, 3.6% index
  • 5 years: 6.3% fund, 3.4% index

INDEX: Equity Balanced Category Average.
Returns are net of fees, distributions and annualized.

TOP HOLDINGS AND WEIGHTINGS

  1. Canadian equities: 31%
  2. U.S. equities: 39%
  3. Canadian fixed income: 19%
  4. Cash: 11%

WEBSITE: goodreid.com