Brian Madden's Top Picks: December 2, 2021
BNN Bloomberg
Top picks from Brian Madden, senior vice president and portfolio manager at Goodreid Investment Counsel
MARKET OUTLOOK:
Consistently favorable December seasonality is colliding with heightened inflation and virus variant concerns, igniting long-subdued volatility in the markets in recent weeks.
Our outlook for the economy and the Canadian stock market remains favorable, buoyed by expected ongoing above-trend real growth in 2022 (consensus forecasts call for 4.1 per cent real GDP growth) and by extension above-trend growth in corporate profits (consensus forecasts call for 19 per cent growth in S&P TSX index earnings) all while valuations remain undemanding, with the S&P/TSX index trading below 16x 2022 earnings forecasts and yielding 2.6 per cent.
Nevertheless, with persistently high inflation, we favour price makers over price takers, we favour companies that can substitute capital and productivity enhancing technology for labour and we favour companies whose products and services address the mass market over those that address mainly the affluent.TOP PICKS:
Brookfield Asset Management (BAM/A TSX) Brookfield is among the world’s foremost managers and operators of long duration real assets like real estate, private equity, infrastructure, renewable energy, and utilities with deep expertise in sourcing transactions and surfacing value.
With significant assets in Canada, the United States, the U.K., Australia, Brazil, and India among other areas, the company has tremendous reach and geographic diversity. Brookfield’s size and scale allow them to field expert teams with deep operating experience across industry verticals and geographic areas, and moreover their financial strength and variety of funding sources afford them the advantage of being among the first calls sellers of world class assets make when looking to consummate a transaction.
