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

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MARKET OUTLOOK

Earnings season is upon us and the market is going to witness a heavyweight tilt. On one hand, we’ll likely witness the strongest earnings growth in seven years. On the other hand, central bankers are aggressively tightening monetary policy and most observers place the economy in the later stage of this cycle. The best-case scenario is an elongated cycle, with markets moving to new record levels. The worst is that strong fundamentals cushion a bear market and the benefits of a new cycle will be felt relatively shortly.

TOP PICKS

FEDEX (FDX.N)
Latest purchase on April 2018 at $252.

With $65 billion in sales, operating more than 150,000 ground vehicles and 650 aircraft, this company is growing its traditional delivery businesses alongside its burgeoning e-commerce offering. Their next fiscal year (beginning June 1), will likely produce $17 per share in earnings, yielding a price-to-earnings (P/E) ratio of less than 15 times.

UNITED RENTALS (URI.N)
Latest purchase on Feb. 2018 at $175.

United Rentals, as the name implies, is the largest equipment rental company in the world, playing into the infrastructure theme presented by the U.S. administration. Trading at just 10 times expected 2018 earnings and benefitting from a robust environment that includes the aforementioned infrastructure theme and an improvement in the energy space, United Rentals is a solid holding for the year ahead.

WALGREENS BOOTS ALLIANCE (WBA.O)
Latest purchase on April 2018 at $70.

Walgreens has been an out-of-favour stock despite posting impressive financial results. Amazon’s announcement they won’t be entering the pharmacy business should allow the company some upside potential. In the meantime, investors have the opportunity to own a well-run, growing enterprise at a bargain basement price.

 

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
FDX Y N Y
URI N Y Y
WBA Y N Y

 

PAST PICKS: MAY 2, 2017

CALATLANTIC GROUP (CAA.N) – NOW LENNAR CORPORATION (LEN.N)

  • Then: $35.23
  • Feb. 12, 2018: $53.12
  • Return: 50.78%
  • Total return: 51.23%

COOPER TIRE & RUBBER (CTB.N)

  • Then: $37.50
  • Now: $27.40
  • Return: -26.93%
  • Total return: -26.02%

FEDEX (FDX.N)

  • Then: $189.03
  • Now: $246.90           
  • Return: 30.61%
  • Total return: 31.77%

Total return average: 18.99%

 

DISCLOSURE PERSONAL FAMILY PORTFOLIO/FUND
LEN N Y Y
CTB N Y Y
FDX Y N Y

 

FUND PROFILE

Goodreid North American Balanced Composite
Performance as of: March 31, 2018

  • 1 Year: 6.6% fund, 1.1% index
  • 3 Year: 5.5% fund, 2.8% index
  • 5 Year: 9.4% fund, 5.7% index

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

TOP HOLDINGS AND WEIGHTINGS

  1. Canadian equities: 33%
  2. U.S. equities: 40%
  3. Canadian fixed income: 17%
  4. Cash: 10%

WEBSITE: goodreid.com