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bnn market call

Veronika Hirsch.

Veronika Hirsch is portfolio manager at Arrow Capital Management. Her focus is on Canadian equities and alternative investing.

Top picks:

CCL Industries (CCLb.TO)

The company has been growing rapidly by making astute acquisitions in the consumer packaging and label industries. Management has not only successfully integrated past acquisitions, but has been able to generate significant organic growth at the newly acquired companies, transforming CCL into a global industry leader.

Alimentation Couche-Tard (ATDb.TO)

Alimentation has been an innovative consolidator of the convenience store industry for decades, successfully expanding from its Quebec base into a global leader. Recent steep oil price declines should help the company satisfy its voracious appetite for additional acquisitions, as energy companies look to monetize their retail assets in an environment of declining cash flows.

Ross Stores (ROST.O)

We expect U.S. consumers to head over to their nearest Ross Store to spend their gas pump savings. Ross is an exceptionally well managed off-price retailer of apparel and home accessories, delivering consistent earnings growth regardless of the economic environment.

Past picks: March 28, 2014

AutoCanada (ACQ.TO)

Then: $56.84; Now: $44.39 -21.90%. Total return: -20.63%

Boyd Group Income Fund (BYDu.TO)

Then: $34.65; Now: $46.98 +35.58%. Total return: +36.96%

Avigilon (AVO.TO)

Then: $28.25; Now: $25.26 -10.58%. Total return: -10.58%

Total return average: +1.92%

Market outlook:

Current steep oil price declines should act as a global fiscal stimulus by the second half of 2015. In the past, oil price corrections of current magnitude lead to re-acceleration of economic growth and resurgence of global stock markets. Because North American consumers will be the primary beneficiaries of sustained low energy prices, the current U.S. consumer sector outperformance seems to be justified. Our focus is on companies serving lower-income consumers. They benefit disproportionally from savings at the gas pump and have a high propensity to spend these savings. We expect markets to broaden out later in the year as more cyclical sectors start participating in the recovery.

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