Bruce Campbell's Top Picks: October 15, 2021
BNN Bloomberg
Top picks from Bruce Campbell, president and portfolio manager, StoneCastle Investment Management
MARKET OUTLOOK:
Markets are slightly off their all-time highs, but under the surface, we have been experiencing a correction over the last six months. This under the surface correction appears to be ending with a reacceleration in the economy. Economic data from the last three months showed a slowing or decline in the rate of growth due to surging COVID-19 Delta cases. In the last three weeks COVID-19 cases have been dropping and this should translate to a re-acceleration in economic data over the next quarter.
The technical indicators that we follow have started to improve with many sectors and companies forming bottoms and starting to move upwards. In particular, mid-cap and small-cap company shares have been gaining relative strength over their large-cap peers. This leadership of the small- and mid-caps follows a period of relative decline since March. This broad-based market participation should have more companies’ share prices appreciating. On top of the economic and technical improvements, we are entering the strongest seasonal period for markets which runs from the end of October to the start of May.
During the last 18 months, sector rotation changes have been frequent and positioning in the correct sectors has been important for portfolio returns. We appear to be in another one of those transitions with technology, utilities and staples losing relative strength while energy, materials and financials showing leadership. Each month we review our top-down indicators and assess the sector rotation during our monthly webinar. TOP PICKS:
PlantFuel Life (FUEL CSE) Last bought at $0.27 PlantFuel Life is a plant-based performance nutritional products company. The management team has experience building a previous nutritional product company into a market leader. With that experience they have been able to form partnerships with GNC and Amazon. They are in the process of ramping up with GNC and will soon launch as a premium product with Amazon.
Greenlane Renewables (GRN TSX) Last bought at $1.72 Greenlane is a leading provider of biogas upgrading systems to help waste producers and gas utilities develop renewable natural gas systems. Governments and regulators continue to mandate renewable natural gas in the utilities system, this should create a tailwind of new projects for years to come.
The Pentagon is seeking US$200 billion in additional funds for the Iran war, a sizable amount that is certain to be met with questions from Congress, which would need to approve any new money.
Defence Minister David McGuinty says the federal government is giving a big boost to the munitions industry to build up the domestic supply of heavy artillery shells.
Defence Minister David McGuinty says the federal government is giving a big boost to the munitions industry to build up the domestic supply of heavy artillery shells.
The Bank of Canada today held its target for the overnight rate at 2.25 per cent, with the Bank Rate at 2.5 per cent and the deposit rate at 2.20 per cent.
Saskatchewan’s government is planning to table a deficit budget today in a move that Premier Scott Moe says protects public services.
Culture Minister Marc Miller says the government must have a serious conversation about AI systems’ use of news.
Delta Air said on Tuesday it expects first-quarter profit within its initial forecast range but raised its revenue expectations on strong demand, amid high jet fuel prices due to the conflict in the Middle East.
The United Arab Emirates briefly closed and then reopened its airspace Tuesday, temporarily halting flights in a crucial travel hub, as the country’s military said it was facing incoming attacks from Iran.
Prime Minister Mark Carney met with British Prime Minister Keir Starmer on Monday, and while both remarked the world has become a more challenging place since their first meeting a year ago, neither named a specific issue in their public remarks.
Japan plans to start releasing oil from its stockpiles on Monday to soften the shock from the U.S.-Israeli war on Iran, a stark reminder of the oil crisis half a century ago that prompted Tokyo to create reserves.
Warner Bros emerged as the biggest winner at the Academy Awards on Sunday, though the mood was clouded by its pending US$110 billion sale to Paramount Skydance, a deal reshaping Hollywood’s studio landscape.
Every day more than $4 billion worth of goods cross the United States’ borders with Canada and Mexico – U.S. auto parts headed for car factories in northern Mexico, cartons of Mexican avocados bound for California supermarkets, Canadian aluminum destined to become cans of Campbell Soup.
Prime Minister Mark Carney met Monday with Prime Minister Keir Starmer in London, and while both remarked the world has become a more challenging place since their first meeting a year ago, neither named a specific issue.