Gordon Reid, President and CEO, Goodreid Investment Counsel

FOCUS: U.S. Equities

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MARKET OUTLOOK:


The U.S. equity markets are in the process of pricing the effects of the new Washington regime; namely tax reform, regulatory changes and an increasing rate of economic growth. All of these inputs are expected to have a meaningful impact on corporate earnings. Of course the downside is that one or more of these initiatives is delayed, or fails completely. Given the setting, this is an environment to be alert to risks; namely exposure that exceeds asset mix targets and a concentration within a name or sector. Active investing will be a safer alternative to a passive approach.

Top Picks:

CalAtlantic Group (CAA.N) Latest Purchase April 2017 @ $37

CalAtlantic was formed in late 2015, a combination of Ryland Group and Standard Pacific. Their latest earnings release was panned because of a drop in margins, the result of higher construction costs, a competitive pricing environment and shift in mix to less profitable homes. Investors should see through these lumpy results. Revenues rose 13 per cent and they handily beat earnings expectations. At less than 1 times book value and with a sub 10 times P/E ratio, this stock is excellent value.

Cooper Tire & Rubber (CTB.N) Latest Purchase April 2017 @ $43

CTB is a replacement tire company. Recent earnings were impacted by higher raw material costs and an accounting practice that highlighted that issue. Goodreid views this issue as transitory and believes this issue is will pass quickly. Global tire demand should grow at 4 per cent plus over the next few years, with China representing a significant growth area.

Fedex (FDX.N) Latest Purchase April 2017 @ $194

Fedex is an example of old technology meeting new tech. With 60 billion in sales, operating more than 150 thousand ground vehicles and 650 aircraft, this company is balancing greater volume through e-commerce with higher operating costs. The future however will see FDX benefit from self-driving electric vehicles, drone deliveries and greater penetration in developing geographies. 

Disclosure Personal Family Portfolio/Fund
 CAA N  N  Y 
CTB  N  N  Y 
FDX  N  N  Y 

 

Past Picks:  MARCH 23, 2016

PAREXEL International (PRXL.O)

  • Then: $59.40
  • Now: $64.48
  • Return: +8.55%
  • TR: +8.55%

Priceline Group (PCLN.O)

  • Then: $1,306.11
  • Now: $1,878.96
  • Return: +43.85%
  • TR: +43.85%

Visa (V.N)

  • Then: $73.91
  • Now: $92.57
  • Return: +25.24%
  • TR: +26.18%

Total Return Average: +26.19%

Disclosure Personal Family Portfolio/Fund
PRXL N N Y
PCLN N N Y
V N N Y

 

Fund Profile: Goodreid North American Balanced Composite

Performance as of: March 31, 2017

  • 1 year: Fund 11.4%, Index*11.3%
  • 3 years: Fund 7.4%, Index*4.9%
  • 5 years Fund 9.9%, Index*6.8%

* Index: Globe Canadian Equity Balanced Peer Index. Returns are based on reinvested dividends and are net of fees

TOP HOLDINGS

  1. Canadian Equities -34%
  2. U.S. Equities - 37%
  3. Canadian Fixed Income - 24%
  4. Cash –5%

Website: www.goodreid.com