BNN Market Call – Market Outlook
Global markets will continue to be buffeted by the macro-economic concerns derived from the profligate government spending in the U.S. and European regions as well as the concerns regarding the pace of expansion in the developing economies. A correction of some magnitude could be triggered by skittish investors reacting to some negative economic releases. The underlying private sector businesses continue to make progress in this tepid environment. Setbacks in share prices should be regarded as opportunities to position portfolios for longer term gains.
Top Stock Picks:
CAE Inc. (CAE TSX) Last Purchase June 18, 2012 $9.93
CAE continues to be awarded civil and military training contracts. Concerns about possible headwinds in the military have overshadowed the positive prospects in civil aviation. Aircraft renewals in the civil aviation sector will continue to pull demand for CAE’s products and services. Healthcare, although small, is showing early signs of attracting business.
Cascades (CAS TSX) Last Purchase March 4, 2013 $4.43
Cascades is a major producer of packaging and tissue products. Lower raw material prices and product price increases should result in better margins over the next year. As margins improve, we believe that management will take steps to reduce debt. Cascades is selling at less than half of book value and offers good value for patient investors.
Suncor Energy (SU TSX) Last Purchase Oct 23, 2012 $32.40
Suncor is Canada’s largest integrated oil and gas company. Upstream activities include extensive oil sands operations and core conventional business in eastern Canada, the North Sea, Africa, the Middle East and South America. Downstream operations include four refineries as well as some 1600 retail locations. Suncor is undervalued given its growing cash flow and potential for significant growth over the next few years.