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   BNN Market Call Newsletter: October 28, 2013
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BNN - Business News Network
Market Call Newsletter: October 28, 2013

Market Call:

For video, market analysis and more click here

Ian Ainsworth, Senior VP, Investments, Mackenzie Investments

FOCUS: Growth & Technology Stocks
Market Outlook:

Most of this past move in the S&P 500 has been a catch up to earnings as the major macro concerns eased. S&P 500 is up 12 percent since 2007, but earnings are up 30 percent and are expected to increase another 20 percent by 2015. There is a lot of skeptical cash on the sidelines and a large amount of funds are now facing losses in the bond market. This suggests the market is not overvalued and the next big issue will be unwinding the stimulus and massive growth in money supply.

Canada is not so undervalued. Earnings have actually declined since 2007. Today, the price-to-earnings ratio in Canada is 18 and only 16 in the U.S. Earnings growth expectations for Canadian companies are expected to be bigger than in the U.S., assuming big earnings gains in the commodity stocks.

TOP PICKS:

Catamaran Corp. (CCT TSX)
Catamaran is a pharmacy benefit management firm, which is a mid-tier company with a more than 40 percent growth from a recently won contract. Stock is weak on concerns about the impact of private exchanges, but are not really justified. See continued consolidation in the industry, which will benefit Catamaran.

VMware Inc. (VMW NYSE)
VMware Inc. is a leader in the automation of the enterprise datacenter, the platform for the private cloud. Private clouds may be a bigger market than public clouds and VMware is up against big players like Cisco and Microsoft.

Estee Lauder (EL NYSE)
Estee Lauder is a Leader in the prestige beauty market with 15 percent share with multiple brands like Tory Burch, Donna Karan, Tommy Hilfiger and Jo Malone. They are family owned but professionally run. There are short term concerns around implementation of a new management system but see the company well-positioned to expand globally and through acquisitions.

Disclosure: Personal Family Portfolio/Fund
CCT
N N Y
VMW N N Y
EL N N Y

Past Picks: August 29, 2012

Google Inc. (GOOG NASDAQ)

Then: $688.01 Now: $1,015.70 +47.63% TR: +47.63%

Palo Alto Networks (PANW NYSE)

Then: $64.73 Now: $43.17 -33.31% TR: -33.31%

Varian Medical Systems (VAR NYSE)

Then: $59.48 Now: $73.31 +23.25% TR: +23.25%


Disclosure:
Personal Family Portfolio/Fund

GOOG N N Y

PANW N N N

VAR N N Y


Fund Profile
Mackenzie Growth Fund, Series A

Performance as at: Sept. 30, 2013


Fund Index*
1 Month
1.9% 1.4%
1 Year
12.8% 7.1%
3 Year
6.2% 4.1%

* Index: S&P/TSX Composite
* Returns are based on reinvested dividends and are net of fees

Top Holdings

Toronto-Dominion Bank 5.1%
Cenovus Energy Inc. 4.0%
ShawCor Ltd. 3.9%
Rogers Communications Inc. 3.7%
Bank of Nova Scotia 3.6%

Website: www.mackenzieinvestments.com

Twitter: @Mackenzie_News

Follow us on Twitter: @hainsworthtv


Market Call Tonight:


For video, market analysis and more click here

Gavin Graham, Chief Strategy Officer, INTEGRIS Pension Management

FOCUS: Global Equities & North American Large Caps

TOP PICKS:

Ensco PLC (ESV NYSE)
Ensco is the second largest offshore oil and gas driller, with earnings of $1.25 billion (all figures U.S. dollars) on revenues of $4.3 billion in 2012 and a market capitalization of $2.8 billion. Following the acquisition of Pride International for $7.3 billion in 2011, it has a fleet of 75 rigs of which 29 are floaters (drill-ships and semisubmersibles), and is one of the youngest in the industry. It has an average age of 3 years for its floaters, which has commanded more than 60 percent margins and is rated BBB and yields 3.6 percent.

Cargojet Inc. (CJT TSX)
Cargojet is a specialist cargo airline with a fleet of 11 owned Boeing 727s, 1 leased 757 and 2 leased 767s. It flies scheduled overnight cargo services between 14 Canadian cities, Newark and Bermuda and Canada and Poland. As 50 percent of all cargo is required to be flown on Canadian owned airlines, it has major long term contracts with FedEx, UPS and TransForce to 2018, sells at a price-to-earnings ratio of 13.7 times 2013's earnings and yields 5.2 percent.

Capstone Infrastructure (CSE TSX)
Capstone Infrastructure is a diversified utility with interests in gas, hydro, wind solar and biomass power, which owns 50 percent of UK water company Bristol Water and 33 percent of a Swedish heat transfer operation. It has 465 MW of power assets after its $70 million takeover of Renewable Energy developers in September, and, while its Power Purchase Agreement for its 156 MW Cardinal gas plant in Ontario expires next year, it is confident that it will be renewed. If not, this will only represent a 15 percent fall in its adjusted free cash flow. It 8.1 percent yield represents only 50 percent of its adjusted funds from operations.

Disclosure: Personal Family Portfolio/Fund
ESV
N N Y
CJT N N Y
CSE N N Y

Past Picks: November 12, 2012

Sherritt International (S TSX)

Then: $4.79

Now: $3.65

-23.80% TR: -20.87%

ead Johnson Nutrition (MJN NYSE)

Then: $65.85
Now: $80.98 +22.98% TR: +25.22%

Intact Financial (IFC TSX)

Then: $63.23
Now: $64.90 +2.64%
TR: +5.51%

Total Average Return: +3.29%


Disclosure: Personal Family Portfolio/Fund
S Y Y Y
MJN Y Y Y
IFC N N Y

Follow us on Twitter: @marketcall


This newsletter is for information purposes only and is not tailored to the needs of any particular individual or company, is not an endorsement, recommendation, or sponsorship of any entity or security, and does not contain investment advice.

BNN strongly recommends that you seek advice from a qualified investment advisor before making any investment decision.

One or more affiliates of BNN may invest or otherwise hold interests in entities which may be referenced in this newsletter. This newsletter is not intended to describe securities bought, sold, or held on behalf of any affiliate of BNN, and is not an indication of any intention to buy, sell, or hold any security.


Tuesday October 29 AM Guest Line Up

8:45 am - The Street - Apple Earnings Analysis
Scott Kessler, Head of Technology Research, S&P Capital IQ

9:00 am - Business Day - Strategy with the Fed Finger Off The Trigger
Paul Taylor, CIO, Fundamental Equities, BMO Asset Management

10:00 am - Business Day - Market Moves - Where to Put the Cash?
David LePoidevin, Portfolio Manager, National Bank Financial

11:00 am - Business Day - Should You Buy Stock in Video Game Makers?
Todd Mitchell, senior analyst, Brean Capital

11:40 am - Commodities - Goldcorp's Cash Problems
Anita Soni, Equity Research Analyst, Credit Suisse


THE 30% CLUB

HEADLINE WITH HOWARD GREEN

She has nine children and heads a company that has $84.2 billion in assets under management, and now she's become a driving force behind boosting female representation in Britain's boardrooms to at least 30 percent by 2015. Howard Green interviews Helena Morrissey, CEO, Newton Investment Management. Watch the full interview online here.

And for more Headline interviews, including analysis of Apple's Fourth Quarter, visit: www.bnn.ca/headline



Tuesday October 29 PM Guest Line Up

12:00 pm - The Business News - The Business News
Amber Kanwar & Greg Bonnell, Anchor, BNN

12:00 pm - The Business News - The Business News
Amber Kanwar & Greg Bonnell, Anchor, BNN

1:00 pm - Market Call - North American Large Caps
Christine Poole, Managing Director, GlobeInvest Capital Management

2:15 pm - Business Day - Technical Stock Take
Carter Braxton Worth, Chief Market Technician, Oppenheimer

3:30 pm - The Close - Platts Ranks 250 Energy Companies
John Kingston, Director of News, Platts

4:30 pm - Market Sense - Markets Breakdown
Randy Cass and Catherine Murray, Hosts, BNN

5:10 pm - Headline - One on One with William Rhodes
Bill Rhodes, Former Senior Vice-Chairman, Citigroup and President & Chief Executive, William R. Rhodes Global Advisors, LLC, Author, "Banker to the World"

5:30 pm - Headline - Hedge Fund Panel
Murray Belzberg, CIO, Perennial Asset Management Corp.

6:00 pm - Market Call Tonight - Technical Analysis
Bill Carrigan, Technical Analyst, Getting Technical Info Services



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