Ryan Bushell's Top Picks: November 30, 2021
BNN Bloomberg
Top picks from Ryan Bushell, president and portfolio manager, Newhaven Asset Management
MARKET OUTLOOK: Friday’s news surrounding the Omicron variant and subsequent designation as a variant of concern by the WHO catalyzed concerns swirling for weeks as case counts had already been on the rise in Europe during November.
The resulting negative market action was swift and perhaps exacerbated by reduced trading volumes during the U.S. Thanksgiving holiday. Clearly, a step change in the path of the pandemic would be a material risk to markets but it is too soon to determine the magnitude, if any. Given Newhaven portfolios were already positioned defensively prior to this news, I see little reason to change course at present.
Energy demand (especially for electricity and natural gas) remains robust, while supply remains constrained, creating a solid environment for producers and infrastructure providers. Portfolio dividends have grown by double digits in 2021 and appear poised to grow significantly in 2022 as well with the return of bank dividend increases.
Additionally, any weakness in the market or the economy as a result of COVID is likely to push back tapering/tightening schedules for both central banks and OPEC+, offsetting at least some of the potential pain. The pandemic changed the world within a few weeks in 2020, as such markets rightfully treat developments in the path of the pandemic, both positive and negative, with a healthy amount of respect. As time has passed though, each development has become less material to the path of the market and economy and I expect this trend to continue as it relates to Omicron.
TOP PICKS:
K-Bro Linen (KBL TSX) Last bought at $34.50 K-BRO is a new holding for my portfolios, a rare event given our low turnover ratio. Following takeovers of companies representing over 8 per cent of my holdings, I have cash to put to work and deployed 2.5 per cent into K-BRO.
