Geoff Scott, institutional portfolio manager at Cambridge Global Asset Management
Focus: North American equities
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MARKET OUTLOOK

We entered 2018 with a conservative posture across our portfolios. The elevated levels of volatility we experienced so far this year have provided an opportunity to selectively deploy capital into new and existing positions at valuation levels that were more attractive. As a result, our cash levels have declined across our Canadian, U.S. and global portfolios. Central banks globally are responding to the improved economic backdrop and raising interest rates or slowing asset purchases through their respective quantitative easing programs. There continues to be risks that this withdrawal of stimulus will not be a smooth process and equity market volatility will continue. As we navigate this market turbulence, we will remain disciplined to our bottom-up fundamental investment process and focused on delivering strong risk-adjusted returns to our clients.  

TOP PICKS

TOURMALINE OIL (TOU.TO)

Tourmaline had a challenging 2017, but we see these issues resolving themselves as the market rebalances – gas production can’t be supported at current prices, takeaway capacity is coming online, and demand continues to grow. We remain confident in the management team, the business model, and continue to see them as a low-cost operator in Canada that is well positioned to capitalize on the challenging environment.

CSX CORP (CSX.O)

CSX is in the midst of an operational turnaround that should see them materially improve the efficiency of their rail network. These improvements will allow the company to significantly increase their margin profile, which in turn will lead to improved free cash flow generation. The improved network efficiency should also accelerate revenue growth as they provide their customers with a better service offering. 

SYMANTEC (SYMC.O)
Symantec provides software and services that help businesses and consumers protect and control their digital information. The company brought on a new CEO in 2016 who has laid out a plan to improve the existing operations and reignite top line growth. They generate significant cash flow and have opportunities to deploy capital into M&A. 

 

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
TOU N N Y
CSX N N Y
SYMC N N Y

 

PAST PICKS: DEC. 27, 2017

PRAXAIR (PX.N)

  • Then: $154.19
  • Now: $150.16
  • Return: -2.61%
  • Total return: -2.09%

MIDDLEBY CORP (MIDD.O)

  • Then: $134.26
  • Now: $128.23
  • Return: -4.49%        
  • Total return: -4.49%

TOURMALINE OIL (TOU.TO)

  • Then: $22.89
  • Now: $20.45
  • Return: -10.65%
  • Total return: -10.29%

Total return average: -5.62%

 

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
PX N N Y
MIDD N N Y
TOU N N Y

 

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