Desjardins Top Picks for 2018Analysts at Desjardins Securities released their sector-specific outlooks and top picks for 2018 in a series of research notes on Friday. The firm's stock selections for the year consisted of 34 stocks spread across nine different sectors.
"2017 was an interesting year for the markets, which saw the first year of Trump's presidency, the ups and downs related to potential tax reform, and major U.S. stock indices setting record highs late in the year despite three rate hikes south of the border and two rate hikes north," the analysts said. "We now enter 2018 facing a new host of challenges and opportunities. It is with this in mind that we are bringing into focus our expectations for 2018."
According to Desjardins, their 2017 top picks brought an equal-weighted average total return of 13.5 per cent, versus a 5.3-per-cent return for the firm's full coverage universe and 9.4 per cent for the S&P/TSX.
There selections for the current year are:
Diversified Industries
Enercare Inc. (ECI-T): "buy" rating, $24 target, 26.6-per-cent expected return. Consensus is $24.36.
David Newman: "Enercare is poised to leverage its presence in 1.6m homes across North America to cross-sell more products and services (eg water heaters, HVAC equipment), and layer on an emerging connected home initiative (eg protection plans, plumbing and electrical services). The company has a stable, defensible core business model, with 75 per cent in recurring EBITDA and contract durations of 15+ years."
Rogers Sugar Inc. (RSI-T): "buy" rating, $7.25 target, 20.2-per-cent expected return. Consensus is $7.05.
Frederic Tremblay: "2018 will the first full year of the 'new' Rogers Sugar as its legacy refined sugar business is now complemented by meaningful exposure to the higher-growth maple syrup market. In our opinion, maple syrup is a welcome addition to RSI's product portfolio as it brings a compelling growth platform, both organically and via potential further consolidation of a relatively fragmented market, in addition to revenue and cost synergy opportunities."
Savaria Corp. (SIS-T): "buy" rating, $20 target, 11.1-per-cent expected return. Consensus is $19.04.
Mr. Tremblay: "Following Savaria's transformative acquisition of Span-America Medical Systems (Span) as well as its best-in-class share price appreciation (68 per cent) in 2017, we see ample reason to stick with this winner in 2018."