Paul Harris, portfolio manager, Harris Douglas Asset Management
FOCUS: North American and global stocks
Top Picks: MSCI, Bank of America, Nvidia
MARKET OUTLOOK:
We believe we will see higher volatility in capital markets as the uncertainty with the existing U.S. administration regarding tariffs will continue.
Although uncertainty is part of investing, it is the degree of uncertainty that is occurring in the U.S.
Another worry is that the U.S. dollar and bond prices seem to be reacting in unusual fashion. In times of crisis both move in unison – that is not occurring.
Foreign nations are not choosing to invest in the U.S. The U.S. Federal Reserve must walk a fine line between higher inflation from tariffs and possible slower growth.
Saying all that, we see volatility as our friend. There is opportunity in chaos. We seize the opportunity to buy existing companies or add new securities to our portfolio.
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TOP PICKS:
MSCI (MSCI NYSE)
MSCI is a provider of critical decision support tools and solutions for the global investment community. Its operating segments include index, analytics, ESG and climate, and private assets. Its indexes are used in various areas of the investment process, including indexed product creation, performance benchmarking, portfolio construction and rebalancing, and asset allocation. The analytics segment offers risk management, performance attribution and portfolio management content, applications, and services. The company is basically an oligopoly for data analytics. It has gross margins of 82 per cent and operating margins of 53 per cent.
Bank of America (BAC NYSE)
Bank of America is one of the largest banks in the United States holding 10 per cent of all deposit in the country. The bank continues to reduce cost through reduction in headcount and technology. The company continues to improve its capital base with tier one ratio at 13 per cent. The stock trades at one times book value and 10 times earnings. The company yield of 2.8 per cent. We think the intrinsic value of $50 dollars. It has diversified business with a large percentage of earnings from fee income. The company should benefit from deregulation in financial services in the U.S. The volatility in capital markets should continue to help earnings.
Nvidia (NVDA NASD)
NVIDIA Corporation provides graphics, and compute and networking solutions graphics segment offers solutions for gaming platforms. Its compute and networking segment provides data center platforms and systems for AI. The company trades 21 times earnings, has gross margins of 75 per cent and operating margins of 62 per cent. It has no debt and 43 billion of cash on hand. Nvidia, is a leader in AI infrastructure and well ahead of their competition.
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| MSCI | Y | Y | Y |
| BAC | Y | Y | Y |
| NVDA | Y | Y | Y |
PAST PICKS: April 10, 2024
Stryker (SYK NYSE)
- Then: US$347.33
- Now: US$343.12
- Return: -1%
- Total Return: 0.48%
Essilor Luxottica (ESLOY OTC)
- Then: US$108.21
- Now: US$143.13
- Return: 32%
- Total Return: 34%
Novo Nordisk (NVO NYSE)
- Then: US$124.93
- Now: US$59.93
- Return: -52%
- Total Return: -51%
Total Return Average: -6%
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| SYK | Y | Y | Y |
| ESLOY | Y | Y | Y |
| NVO | Y | Y | Y |
