Brian Madden's Top Picks: October 5, 2021
BNN Bloomberg
Top picks from Brian Madden, senior vice president and portfolio manager, Goodreid Investment Counsel
MARKET OUTLOOK: Point-to-point, Canadian stocks more-or-less tread water during the third quarter, with the S&P/TSX Composite Index returning 0.2 per cent, with dividends offsetting modest declines in prices.
Intra-quarter, things were more interesting, with stocks steadily climbing through the first week of September, before backsliding 3 per cent into quarter end as traditionally weak September seasonality collided with widespread back-to-school/back-to-the-office activity amidst the spread of the Delta virus variant and as concerns heightened around high current inflation in both countries.
Nevertheless, the late-quarter selloff couldn’t break the now six-quarter long string of uninterrupted gains since last spring’s nadir.
Looking ahead, the risk and the opportunity that does strike us as worthwhile to take seriously is inflation, which we now believe will be higher for longer, with “cost-push” inflation abating over the coming year and giving way to stickier “demand-pull” inflation as household balances sheets are very strong, labour is scarce and wages are rising sharply as the service sector reopens.
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:
NFI Group (NFI TSX) Last bought $23.97 in September 2021 NFI Group is the leading supplier of internal combustion engine and zero emission transit buses to cities, states and provinces in North America and has a strong and growing presence in the UK and Europe as well via their recent acquisition of Alexander Dennis Ltd.
