A portfolio manager's picks

A portfolio manager's picks

A portfolio manager Chad Larson, portfolio manager from National Bank Financial, gives WP his top three stock picks.

True North Commercial REIT – TNT.UN
“TNT.un is a great place to get exposure to a portfolio of commercial real estate,” says Larson. “Led by strong management who have significant equity exposure, TNT has assembled a portfolio of ~30 buildings representing 1.9 million square-feet of commercial real estate largely focusing on government and credit rated tenants in strategic secondary markets. They have a conservative balance sheet and access to capital. This has allowed them to year-over-year accretive growth to their value metrics. All of this strong value growth is underpinned by an easy proposition to be patient due to a ~9.6% yield which has historically been 100% return on capital.”

PAREX Resources Inc. - PXT
“Off the back of an excellent reserves update, and a RLI (reserve life index) of 10 years, Parex yet again stands out as arguably one of the strongest E&P companies relative to its peers. They have high net back production and visible growth to their reserves along with an incredibly prudent balance sheet that has no debt and boasts net cash over $170 million USD$. Parex is poised for a mid-cycle value re-rate as money has poured back into the space and will eventually hit the international companies again."

Augyva Mining – AUV
“Pending a shareholder vote on February 23rd, AUV will become Automotive Finco Corporation, a speciality finance company focused on the automotive retail sector and structured to have royalty like returns. As a result of an alliance agreement with a strong private auto retail company and with proceeds from a significantly oversubscribed private placement, the company has already initiated its first transaction which results in a strong return on its initial loan backed by a portfolio of auto dealerships. The company is forecasting strong EBITDA growth through 2017/18 and we expect management to initiate a dividend/distribution some time during this year while being active on the acquisition front. High growth and yield are both underpinned by strong leadership in an industry that is ripe for consolidation and the entrance of an alternative financing option for the automotive dealership sector."

The securities or sectors mentioned herein are not suitable for all types of investors. Please consult your investment advisor to verify whether the securities or sectors suit your investor’s profile as well as to obtain complete information, including the main risk factors, regarding those securities or sectors. The opinions expressed herein do not necessarily reflect those of National Bank Financial. The particulars contained herein were obtained from sources we believe to be reliable, but are not guaranteed by us and may be incomplete. National Bank Financial is an indirect wholly-owned subsidiary of National Bank of Canada. The National Bank of Canada is a public company listed on the Toronto Stock Exchange (NA;TSX). National Bank Financial is a Member if the Canadian Investor Protection Plan (CIPF). This content is intended only for residents of the provinces or territories of Alberta, BC, Ontario, Saskatchewan and Manitoba.

Related stories:
Advisor: These are my top stock tips
An insider’s investment picks