John Stephenson, President & CEO, Stephenson & Company Capital Management

FOCUS: North American Large Caps & Resource Stocks

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MARKET OUTLOOK:

Last week the Fed chair Janet Yellen put a September rate hike back on the table. But despite the selloff that happened in the immediate aftermath of her speech the path for rates is likely to remain one of lower rates for longer. And in a low rate environment stocks with a solid dividend yield should be favoured.

Top Picks:

Vodafone (VOD.O) – Last Bought on Aug. 25, 2016 @ $33.17

  • Strong dividend – approx. 6.7 per cent yield
  • #2 cellphone provider in Germany and the U.K. only represents 10 per cent of its value
  • Better valuation than U.S. peers

*Short* Campbell Soup (CPB.N) – Last Bought on May 12, 2016 @ $66.42

  • Soup is at the business’ core and the business is not stabilized
  • Soup is high margin but in secular decline – can CPB find new businesses to invest in as soup declines?
  • Trades at a 21x P/E ratio

Medtronic (MDT.N) – Last Bought on August 25, 2016 @ $84.60

  • Company can grow EPS at double-digits over next five years
  • MDT should be able to grow the top line at mid-single digit over the next five years
  • Increased access to international cash should unlock value for shareholders
Disclosure Personal Family Portfolio/Fund
VOD  N N Y
CPB  N N Y
MDT N N Y

 

Past Picks:  Sept 26, 2015

*Short* Petroleo Brasileiiro (PBR.N)

  • Then: $4.08
  • Now: $9.39
  • Return: -130.15%
  • TR: -130.15%

*Short* Teck Resources (TCKb.TO)

  • Then: $6.52
  • Now: $21.87
  • Return: -235.43%
  • TR: -239.83%

Cash

Total Return Average: -123.33%

Disclosure Personal Family Portfolio/Fund
PBR N N N
TCKb N N N

 

Twitter Handle: @Stephenson_Co, @Stephensonfiles

Company Website: www.stephenson-co.com