Ross Healy, chairman at Strategic Analysis Corporation and senior portfolio manager at MacNicol & Associates Asset Management

Focus: North American large caps
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MARKET OUTLOOK
The market outlook is probably at its most uncertain at present, as many of the current stock valuations are not supported by their visible fundamentals, but rather by momentum investing. This does not guarantee a market setback but neither does it necessarily underwrite further strength in the period ahead. On the positive side, save for poor valuation support there are no real excesses that one can point to as evidence of any impending setback. On the other hand, the action of investors who cannot decide what to invest in, and therefore have thrown their hands in the air and simply invested in what I might refer to as faceless ETFs, is not encouraging. Blind investing is a sign of excess, and we only have to go back to 2000 in the high tech market and 2008 in U.S. real estate to know where that can lead.

These days, I am more inclined to invest from a high cash position, taking advantage of individual share price weakness to make forays into the market — and then back out with modest profits — rather than being “all in” during risky times.

TOP PICKS

HOME CAPITAL GROUP (HCG.TO)
The company is back to being a company and not a rank speculation — as people thought it was when I recommended it here about two months ago at $6. There will be a couple of adjustment quarters ahead but after that, things should settle down to a dull roar and the stock should ooze upwards fairly steadily in the period ahead.

FORTIS (FTS.TO)
Steady increase in the balance sheet values would seem to be in the cards from their stated plans. Nothing exciting but a nice yield and steady book per share growth should make this a nice, low-risk holding. The shares are trading fairly close to their usual price/book low for the past 10 years.

COMINAR REIT (CUF_u.TO)
Hard not to like a REIT with a payout that is covered, a strong balance sheet, and a very cheap valuation (40 per cent discount to the SAC measure of book value). As far as the economy of Quebec is concerned, the quality of the Quebec balance sheet itself is better than Ontario and B.C.
 

PAST PICKS: AUGUST 11, 2016

TELUS (T.TO)

• Then: $43.88
• Now: $44.95
• Return: +2.43%
• TR: +7.07%

GOLDCORP (G.TO)

• Then: $24.60
• Now: $17.09
• Return: -30.52%
• TR: -30.13%

CITIGROUP (C.N)

• Then: $45.73
• Now: $66.00
• Return: +44.32%
• TR: +45.60%

TOTAL RETURN AVERAGE: +7.51%