Bruce Murray, CEO and CIO of Murray Wealth Group

FOCUS: North American growth stocks

MARKET OUTLOOK:

After a very solid first half where the S&P 500 Index's total return was 15.3 per cent, we at Murray Wealth Group expect the bull market to continue to both rise and broaden as the current economic slowdown and moderating inflation allow for lower rates. Fed rate cuts, expected to start in the fall, will both stimulate the economy and improve market valuation as dividend payers get better valuation and overall profitability improves. We have about 28 per cent of the portfolio exposed to companies with AI potential with most of that being in Alphabet, Meta, Microsoft and Amazon so we are believers in it but want to play it with strong businesses poised to benefit.

We have the portfolio of just over 25 per cent in Europe, with a heavy focus on Global leaders like LVMH and AstraZeneca, which is enjoying great success with cancer treatments and a top pick. The 25 per cent in Canada is focussed on a few we think are well positioned as well as holding our financial weight largely in Canada. I do believe with lower interest rates that we will see more confidence and we should see a much better performance out of many more businesses. I also believe that we are in the early stages of a mining exploration pickup as exploration has been limited for over a decade and forecasters point out the need for more mines, particularly copper. 

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TOP PICKS:

Airbus SE (EADSY ADR)

With Boeings issues looking like they will take time to work out including different management, potential lawsuits, and potential further issues with FAA we like airbus as its slate is largely clean and a backlog of many years. The stock recently fell back substantially on announced continuing parts supply shortage. They were recently given factories in Northern Ireland and the USA in the Spirit as part of Boeing’s reacquisition of its former airframe manufacturing business. Earnings will be down about 10 per cent this year but should grow 10-15 per cent for the rest of the decade.

Air Canada (AC TSX)

I’ve picked it before at higher prices and the story continues to get better selling well under 4 times trailing eps with solid growth forecast for the rest of the decade with more people wanting to travel. The debt which ballooned under the pandemic is largely repaid and we look for a substantial gain in the stock. A growing population and growing International traffic play into AC’s story.

Evertz Technologies (ET TSX)

An interesting small company with about $500 Million of revenue about $8 growing at about 5 per cent p.a. The company is a leader in the niche market of broadcasting and Video distribution. Its highly profitable with net margins o f 15 per cent. The company pays an $0.80 dividend 6.4 per but still piles up cash. While they hope to make acquisitions, they have failed to complete any recently. ET has paid extra’s when cash exceeds $100 million and I expect an extra of $1.00 share could be expected if acquisitions opportunities do not arise.

 
PAST PICKS: JULY 20, 2024

Thermo Fisher Scientific (TMO NYSE)

• Then: US$538.27
• Now: US$539.13
• Return: 0.1%
• Total Return: 0.4%

Qualcomm (QCOM NASD)

• Then: US$120.72
• Now: US$206.56
• Return: 71%
• Total Return: 75%

Major Drilling (MDI TSX)

• Then: $9.24
• Now: $9.08
• Return: -2%
• Total Return: -2%

​Total Return Average: 24%