Paul Harris, partner and portfolio manager, Harris Douglas Asset Management
FOCUS: North American, global stocks
Top Picks: Novo Nordisk, MSCI, LVMH Moet Hennessy Louis Vuitton SE
MARKET OUTLOOK:
With the weakening of the U.S. consumer and the increase in unemployment, it is clear that the
U.S. Federal Reserve will reduce rates in the September meeting and start the U.S. on an easing cycle.
We think that we will see greater volatility in the next three months as we get closer to the U.S. election. The Canadian economy is in much worse shape than the U.S. and we see further rate decreases over the next several months.
We think we will see a weaker Canadian dollar, and we believe the Bank of Canada needs to be more aggressive than the Fed in rate reduction.
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TOP PICKS:
Novo Nordisk A/S (NVO NYSE)
NVO-is a Danish multinational pharmaceutical company. Novo Nordisk is controlled by majority shareholder Novo Holdings A/S which holds approximately 28 per cent of its shares and a majority (77 per cent) of its voting shares. The diabetes and obesity care segment includes diabetes, obesity, cardiovascular, and emerging therapy areas. The rare disease segment refer to rare blood disorders, rare endocrine disorders, and hormone replacement therapy. The company’s major drug is Ozempic and Wegovy that continue to drive revenue and earnings. We believe we are in the early stages of these blockbuster drugs and the continued research that shows the drug helps reduce heart disease, stroke, fatty liver and sleep apnea.
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.
LVMH Moet Hennessy Louis Vuitton SE (MC EPA)
LVMH Moët Hennessy Louis Vuitton, commonly known as LVMH, is a French multinational holding company specializing in luxury goods, headquartered in Paris. LVMH’s revenue drivers consist of six streams: fashion and leather goods, selective retailing, other activities, watches and jewelry, perfumes and cosmetics and wines and spirits. LVMH currently operates in 81 countries with 6,097 stores owning brands such as Christian Dior, Bulgari, Tiffany & CO, Veuve Clicquot. The stock trades 21 times forward earnings, has gross profit margins of 70 per cent and a dividend yield of 1.93 per cent.
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| NVO NYSE | Y | Y | Y |
| MSCI NYSE | Y | Y | Y |
| MC EPA | Y | Y | Y |
PASTPICKS: SEPTEMBER 11, 2023
TD Bank (TDTSX)
- Then: $81.88
- Now: $80.10
- Return:-2%
- Total Return: 3%
Stryker (SYK NYSE)
- Then: US$299.72
- Now: US$359.72
- Return:20%
- Total Return: 21%
Johnson &Johnson (JNJ NYSE)
- Then: US$162.66
- Now: US$166.44
- Return:2%
- Total Return: 5%
Total Return Average: 10%
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| TD TSX | Y | Y | Y |
| SYK NYSE | Y | Y | Y |
| JNJ NYSE | Y | Y | Y |